Becoming an entrepreneur in Finland

15.4.2019 9:16

NPE researcher Adrian Braun writes about the initial steps of becoming an entrepreneur in Finland, how to get support and what is important in the early phases of developing a business.

Blog Adrian - Picture Entrepreneur Apr 2019.jpg

NPE researcher and entrepreneur Adrian Braun outlines a few initial steps to start an entrepreneurial business in Finland. He describes ways to receive support and what matters in business planning and early phases of business development. Trust and transparency building across new networks are essential elements in modern businesses and much more needs to be considered to achieve these assets by founding a start-up business.

There are diverse reasons that could lead to the decision to start an own business. Great ideas that nobody else believes in, the wish to be the master of your own fate and lack of employment opportunities are just a few common, but there are many other reasons as well. Often it is a combination of several factors. The decision to become an entrepreneur may be simple, but it is not an easy one and it should not be taken lightly.

A future entrepreneur needs to develop a checklist with many items and all of them should be answered. Let´s take the idea of becoming an entrepreneur in Finland or how the Finnish authorities name it “a private trader”. The good thing in Finland, from the very start, you are not alone. It is possible to check business plans or just entrepreneurial ideas with business development organizations throughout the country. Many of those organizations are state-funded and advice is for free (covered by the tax-payers). If no service center is in the nearest town, they support also via telephone or e-mails. However, it is recommendable to get a personal expert advisor, who is coordinating the administrative steps together with the future entrepreneur. Despite the good support that is available in Finland, it is crucial for a new entrepreneur to learn in a short time-frame many facts and processes that are not relevant in the working life of a regular employee. One notable example are tax matters that have to be solved, both, income tax and value-added-tax (VAT) to the sold products and services. The good news here is, entrepreneurs in Finland are eligible to practice single-entry bookkeeping systems (Listings of all transactions in terms of cash, accounts receivable, accounts payable and taxes). The more complicated double-entry system is required for all other business forms. For many small businesses it is helpful to hire a bookkeeping and tax service firm that takes care of these matters.

The necessity of having a business plan was briefly mentioned before and this leads to the issue of starting capital and financial planning of the business. Every founder should be aware that for most businesses entering a new market can be tough and prevalence on the market can last for several months, sometimes years. Particularly, ventures that require large investments and face high running costs need the necessary back-up capital to avoid the risk of early insolvency, because the client base is not strong enough yet. Production businesses face naturally higher threats than service businesses. So, the founder needs to be aware of the market potential! Is there a market at all for the product or service? Who are the competitors and who are potential business partners?

As entrepreneur in Finland, or in the Nordic countries in general, it is essential to build trust in your business society. Meeting your potential future clients in person may speed up trust building immensely, compared to using only other communication channels. When you meet a potential client in Finland for the first time and they ask you who do you know in the field, it does not make particularly sense to highlight that you know the CEO of the highest stock listed company, the county governor or other notable individuals. They want to know if you know the same people that they know. Thus they can develop an understanding of how much they can trust a potential new partner. This leads us to the way to present a new business. A website that outlines all products and services can be a good platform to underline the overall pursuit and makes a business venture more transparent to the public. The active participation as speaker at conferences and workshops should be taken at least occasionally into account. There are several events in Finland throughout the year that provide platforms for start-ups and entrepreneurs. At these events it is possible to find investors or new clients and to be up to date with the latest developments in your specific sector.

Text and Picture: Adrian Braun