It's a frustrating and common situation in Cape Verde: Your company's turnover is high, it looks good, but at the end of the month, profit doesn't appear. This pain, felt by many entrepreneurs, is a clear symptom of financial disorganisation e waste of resources in operating costs.
Sales volume is useless if costs eat up all the margin. For a company operating in a dynamic environment (and with inter-island logistical challenges) such as Cape Verde, controlling costs is as vital as selling.
In S&D Consultancy, Our approach focuses on identifying and eliminating the “invisible thief” of profit. We present 4 consulting strategies that can optimise your operating costs and rescue your company's financial health.
Contents
Many companies operate with a purely historical budget, without aligning it with strategic goals or macroeconomic fluctuations (such as inflation).
Strategy: Implement a zero-based budgeting or a more rigorous budget control system that monitors monthly variances and categorises operating costs (OPEX).
The Impact: Budget control helps to forecast working capital needs and avoid unplanned expenses that erode profit.
| Official Source for Reference | Relevant Legal Framework |
| Bank of Cape Verde (BCV) | The BCV oversees the financial system and monetary policy and is the main source of data on inflation and interest rates. This information is crucial for projecting the impact of the cost of money and rising prices on your operating costs. (Source: Bank of Cape Verde) |
Financial disorganisation hides expenses that don't add value. These costs can range from obsolete service contracts, stocks excessive storage costs or energy waste.
Strategy: Carry out a detailed audit of operating costs (energy, telecoms, transport, maintenance) to negotiate new terms or migrate to more efficient solutions.
The Impact: Identification of “dead costs” to be cut immediately, improving profit margin without affecting sales volume.
| Official Source for Reference | Relevant Legal Framework |
| Multisectoral Economic Regulation Agency (ARME) | ARME regulates key sectors such as energy, water and telecommunications. Consultation of the regulations and approved tariffs allows your company to auditing and negotiating costs of public services, ensuring that you are not paying above what is legally established. (Source: ARME - Legislation) |
In Cape Verde, transport and logistics costs between islands can be a significant drain on resources. Inefficient management of stock and distribution makes the end product more expensive and reduces competitiveness.
Strategy: Optimising the management of stocks (minimising storage costs) and renegotiating transport contracts, consolidating loads to obtain better rates.
The Impact: Direct reduction in cost of goods purchased (COGS) and improved delivery punctuality.
| Official Source for Reference | Relevant Legal Framework |
| Cape Verde TradeInvest (CVTI) | By promoting the investment, CVTI provides crucial information on the business environment, infrastructure and logistics on each island, helping to plan the most efficient supply chain. (Source: Cape Verde TradeInvest) |
By ignoring the complex system of tax incentives and special regimes, many companies end up paying more tax than they should, reducing their net profitability.
Strategy: S&D carries out a tax diagnosis to ensure that your company is benefiting from all the legal incentives, such as deductions from taxable income for Investment Tax Credit or the reduced rate of IRPC for startups and ICTs.
The Impact: Reducing the total tax burden and increase in net profit available for reinvestment.
| Official Source for Reference | Relevant Legal Framework |
| Ministry of Finance / Code of Fiscal Benefits (CBF) | O Code of Fiscal Benefits (CBF), In its latest republication (Law 86/IX/2020), it is the legal instrument that defines tax incentives for investment (e.g. IRPC rate reduction, tax credit). Its correct application is vital for optimising costs. (Source: Ministry of Finance - Tax Legislation) |
If your profit margin is low, it's not time to sell more, it's time to better management. A business consultancyl is not a cost, but a investment which is paid for by the savings generated.
With S&D, your company gets a precise diagnosis and a Action Plan focused on budgetary discipline, operational efficiency and fiscal optimisation.
Your turnover is high, but your profit isn't yet. Are you ready to identify and cut the costs that are stealing your margin? Contact us
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