Starting a business: when starting your entrepreneurship venture, remember these!

Starting a business and becoming an entrepreneur can be quickly done online, but the road to entrepreneurship is not necessarily easy. In addition to a good business idea, starting a business requires many legal obligations and things to be considered before you can begin. In this article, we go through all the steps of setting up a business, from the business plan to choosing a name and filling in the right forms!

Steps to start a business – Click on the item you want to read more about in the list!

1. Define the business idea
2. Draw up a business plan
3. Choose your business type
4. Choose a name for your business
5. Find out if the activity is subject to authorisation
6. Get your insurance in order
7. Get your finances in order
8. Register your company
9. Open a bank account for your company
10. Get an accountant
11. Get billing software

After setting up a business, remember to pay VAT, input tax and file tax returns.

The easiest way to start a business is doing it online

Here are three ways to make it easier and skip steps 6 (insurance), 8 (registering your business), 10 (getting an accountant) and 11 (getting an invoicing program) in the list above. After these tips the article continues with a comprehensive description of the steps involved in setting up a business.

Option 1: Invoice as a light entrepreneur (without a business ID)

he As an UKKO Light Entrepreneur you don’t need a business ID and can start working as soon as today. You do the work, decide on your pricing and send the invoices, we at UKKO.fi take care of the paperwork for you. Test your business idea first as a UKKO Light Entrepreneur!

• You don’t need a business ID or accounting
• You are insured with UKKO Assurance (Accident and Liability Insurance)
• The most carefree way to try entrepreneurship

Option 2: Set up a light business (own business name)

With UKKO Light Entrepreneur with business ID, you can get your own business ID number for free and benefit from the tax advantages of registered entrepreneurship. We take care of the paperwork and you can focus on getting your work done.

• Free business ID
• You are insured with UKKO Assurance (Accident and Liability Insurance)
• Possibility for start-up grant, VAT relief and entrepreneurial tax deduction

Option 3: Start a business

In UKKO Entrepreneur, setting up a business is easy and you can get a business ID immediately. We also provide support in accounting and financial management by offering a tailor-made accounting service for business owners. All you need to do is fill in the necessary information on the form to set up your new business. Through UKKO Entrepreneur, you can get your private trader business ID free of charge, and you don’t have to worry about registration fees that may sometimes come as a surprise.

A few easy steps and you’re set with setting up your business!

Fill in this form and we’ll do the rest.

• The form knows to ask you for all the information needed to set up a business: the sector of your business, and basic information about the entrepreneur, such as name, address, social security number, etc.
• You must be at least 18 years oldto set up a business and obtain a Y-registration through us. To identify yourself, you will need an online banking ID or a mobile certificate.
• When registering, you also have the opportunity to obtain pension insurance for self-employed, or YEL insurance, through us.

To the Trade Register or not?

The easiest way is to register only with the tax administration when setting up a business. Another way is to register with both the Tax Administration and the Trade Register. You have to register with the Trade Register if you are carrying out an activity that requires a license, if you have separate business premises, if you employ someone outside the family or if you want to protect the name of the company.

You can also register with the Trade Register after you have received your business ID number. In this case, a change notification is made in the YTJ service. The electronic declaration in the Trade Register costs 60 euros and the paper form 115 euros (2022).

However, if you want to do things the long way around, you can proceed as follows:

Option 4: Do things the hard way.

• Set up a business name in the YTJ service run by the Tax Administration and the PRH, when the cost of joining the Trade Register will be 60 euros (2022).
• Get set up on paper with a confusing Y3 form. You’re prepared to pay 115 euros (2022) to join the Trade Register and settle for the long processing times.
• With an existing business ID number, you can apply to join the Trade Register by submitting a change notification in the YTJ service. The cost of registering with the Trade Register is 60 euros online and 115 euros with a paper form.

But the easiest way to get started is to start your business via UKKO.fi!

Starting a business – A comprehensive guide

There is much more to setting up a business than just getting a business ID. In the next section, we’ll take a comprehensive look at everything you need to know about setting up a business.

1. Start by defining your business idea before starting your business

Thinking about becoming an entrepreneur and starting a business usually starts when you have a business idea in mind that you want to realize. Not all ideas are worth pursuing, so you need to think about your business idea from many different angles. As competition is fierce these days, a business should have some trump cards that will make it more successful than its competitors. These are worth considering. Could your company offer something that your competitors have not thought of? Sometimes you can also stand out from the crowd with your image. So it’s worth thinking about your image and developing it over time. Of course, good quality products and services are also things that customers value.

2. A good business plan goes a long way

grantStarting a business requires planning. You need to think about your own abilities as an entrepreneur and, of course, the potential of the business you want to set up. The very first step before starting a business is to think about the business idea and the business concept. The mission statement is about describing the framework within which the business exists. The business idea, on the other hand, describes how the company intends to carry out the activities set out in its mission statement. These ideas will gradually develop into a business plan to structure and plan the viability of the business. A business plan is also required as an annex if the entrepreneur intends to apply for start-up grant for new entrepreneurs from the Office for Employment and the Economy.

A good business plan should include at least a description of the business idea, the products to be sold, the target groups, the market, a financial plan and profitability calculations. It should also explain the arrangements needed to set up the business, such as premises, equipment, tools and other purchases. Good planning is at least half the battle. Profitability calculations include, among other things

• fixed and variable costs,
• product pricing and cost structure,
• how much sales are needed,
• when a critical point is reached.

Planning support is available, for example, at entrepreneurship courses, but also by asking the Employment and Economic Development Office directly. There is also a wealth of information and links on the Suomi.fi website, run by the Finnish National Digital and Population Data Agency, for those who want to become entrepreneurs.

3. Choose the company form before registering

The choice of company form is worth looking into, as it affects, among other things, start-up costs, accounting obligations, company decision-making and the difficulty of ending the business operations.

The type of business is one of the first things to decide when starting out as an entrepreneur. Each form of business has its advantages and disadvantages, which need to be weighed before deciding on the form of business. A prospective entrepreneur must choose the most suitable form of business for their own business from a list of five options. The main types of company are a private trader, a limited liability company, a general partnership, a limited partnership and a cooperative. In addition to these, a new entrepreneurial model is the light entrepreneur, which does not require a business ID number. It is therefore not formally a business form, but it makes it easy to start an entrepreneurial activity without having to set up your own business. If you are interested in the different forms of business start-up, read more here: Comparison of business forms If you are interested in the cost of starting a business and how much it costs to start a business, read more here: Cost of starting a business

4. Choosing a company name is an important step

The company is remembered by its name. That’s why it’s a good idea to choose a company name that is easy to remember for your customers, contractors and partners. The name should reflect something of the company’s sector, although this is not compulsory. However, the name should not be limited to the sector of activity alone, but should also include, for example, the name of a place. It is easy for a business name entrepreneur to make up a name based on their own name. In this way, the company and the person are conveniently linked. However, it is also possible to choose a name for a business name that has nothing to do with the entrepreneur’s name. For large companies, it is important to invest time and thought in a memorable name. If the name is easily lost among others, customers will not find or remember it. It is therefore recommended that the name should be even a little playful or cheeky. Before the chosen name can be used by the company, it must be approved by the Trade Register. This is because no two companies with the same name can operate in Finland.

The Business Name Law specifies that the name must identify the holder of the name. The name cannot therefore be, for example, a mere word describing the nature of an activity, a mere verb, a commonplace word or a common first or surname. These may of course be included in the name of the company, but the name must be accompanied by other elements. Similarly, domain extensions such as .fi or .com are not unique names and are not accepted as such. In addition, a protected name may never be used in a business name. If a person or company has patented a name that is known internationally or nationally, the patent protects the name and others cannot use it for their own business. The Patent and Registration Office will check that the name complies with the regulations before it can be approved. Furthermore, there must not be another company with the same name in Finland. If there is already a company registered under the same name, a new name must be invented. The name chosen will only be confirmed by the Trade Register after it has been verified that the name is valid and that there is no other company with the same name in operation. Once the name is confirmed, the company has exclusive rights to it in Finland. For more information on how to choose a business name and how to check the background, please visit the website of the Patent and Registrations Office.

5. Find out if the activity is subject to license

Sometimes a license may be required to operate a business. There are three different types of licenses in Finland.

In general, you do not need a separate license to carry out an activity, but you do need a licence to become a taxi driver, for example. Setting up a business requires familiarity with the law, so before you start, you need to find out whether you need a license and where you can apply for the necessary permits from the authorities to start your business, if necessary. If the business is not yet in operation, a health inspector’s approval or an environmental permit may be required to start the business. In addition, there are other types of business in Finland that are subject to notification. There are three types of permits for setting up a business:

• health inspector’s approval or environmental permit for the premises where the operations are carried out
• professional requirements and licenses
• the exercise of the trade or profession is subject to license

Environmental permits are required for activities such as forestry, metallurgy, chemicals, energy production, storage, treatment and use of chemicals or fuels, and wastewater treatment. The following activities are subject to authorisation: grocery, many health care activities, restaurants and cafés, car inspection and repair, postal services, telecommunications, credit and investment services, insurance, beauty and health, debt collection, passenger and goods transport. In the care sector, licensing applies to both municipal and private enterprises. Before setting up a business, it is necessary to find out whether its activities require any licenses or notifications. These must be in place before the business can be started.

Read more about starting an activity subject to authorisation

6. Registering a business – setting up a business in practice

Notification of the creation of a company

The business is started by filing a declaration of incorporation. Usually, the company is also registered in the Trade Register. However, self-employed persons do not have to register with the Trade Register if the activity does not require a licence, if there is no separate business premises or if there are no non-family members on the payroll. With the start-up declaration, you can also register with the Tax Administration’s registers, such as the Register of Value Added Taxpayers, the Prepayment Register and the Register of Employers. For each type of company, a notification of incorporation must therefore be submitted. Depending on the type of company and the way in which it operates, the declaration is made either only to the tax authorities or, alternatively, to both the Trade Register and the tax authorities. The incorporation form and instructions for filling it in can be found on the website of the Enterprise and Community Information System ( YTJ).

Starting a business and becoming an entrepreneur online is often cheaper than doing it on paper. However, not all forms of business can be set up electronically. You can register a business name electronically with the Tax Administration and the Trade Register maintained by the Finnish Patent and Registration Office. The costs of electronic registration are low and the registration can even take effect on the same day. In the case of a limited partnership, general partnership or limited liability company, on the other hand, registration can only be carried out using a paper form. However, if the capital of a limited liability company is zero euros, it can also be registered electronically.

The constituent documents must be in order

For all but the private trader, annexes are required to support the declaration of incorporation. The registration of general partnerships and limited partnerships requires a memorandum and articles of association. A limited company also requires a memorandum and articles of association. The founder of a private trader does not need to file any incorporation documents but simply needs to notify the Tax Administration or the Trade Register. For the other types of company, however, incorporation documents must be drawn up, including the memorandum and articles of association for general and limited partnerships and the memorandum of association, articles of association and minutes of the board meeting at which the chairman is elected for limited companies. In the case of a co-operative, it is necessary to draw up the statutes of the co-operative, write the instrument of incorporation and draw up minutes of the board meeting. The above-mentioned founding documents may also be necessary for a new company to obtain financing, as, for example, the application for start-up grant requires a well-thought-out business activity, although registration cannot take place before the aid is granted. Light entrepreneurs are not eligible for start-up grant, but in principle, being a light entrepreneur does not prevent you from applying for start-up grant later on when it comes to setting up your own business and starting your own entrepreneurship. The documents described above must also be available to obtain many business loans.

Where can I get help to start a business?

• New Business Centres
• TE Offices
• From the Enterprise Finland website of the Ministry of Economic Affairs and Employment
• From the ELY Centre

7. Business funding enables investment

Starting a business requires initial capital, so you need to think about how much money you need and how you will arrange to get it. If the business idea requires a lot of investment, the future entrepreneur themself may not be able to invest all the money needed in the business. In this case, external funding is needed.

Businesses are almost never financed solely with their own money. As a start-up entrepreneur, you should find out what grants are available to you. In many cases, you may need a start-up grant or loaned money, for example, to start a business. You can apply for a business loan from a bank or Finnvera, or from private investors, so-called business angels. The TE Office can provide a start-up grant, which is intended to help entrepreneurs secure their livelihood during the start-up phase. You must apply for start-up grant before you register your new business. The start-up grant helps the fledgling entrepreneur to survive financially until the business starts to make a profit. To qualify for the start-up grant, you need a well-developed business plan and evidence that the business will succeed in the market. Start-up grant is available for a minimum of six months from the start of the business. At the most, you can get up to a year’s start-up grant. Start-up grant is taxable income.

A new business, especially in investment-intensive sectors, often starts with a loss for about two years before making a profit.

It is possible to apply for a loan to start a business. You can apply for a loan either through online loan services, directly from a bank, or from financial institutions that grant business loans. The quickest way to apply for a loan is directly online. In the best case, a decision can be taken immediately and even the loan can be paid into the applicant’s account within the same day.

Starting a business – Financing your business

8. Business insurance is determined by the sector of activity

Both the entrepreneur and the business need different types of insurance. They can create a sense of security and provide a backup.

It’s smart to carefully look into the insurance policies available to businesses and entrepreneurs. Entrepreneur and business insurance is divided into compulsory and voluntary insurance. The need for insurance depends very much on the sector in which the business operates. For example, someone who wants to be self-employed in the construction sector will need more comprehensive insurance than, say, a hairdresser. In many cases, there is only one compulsory insurance for self-employed people, and that is the self-employed person’s pension insurance, YEL. It is the entrepreneur’s way of protecting the pension he or she receives. As a self-employed person is working for themself, the pension does not accrue in the same way as for employees. By the law, self-employed persons must take out self-employed pension insurance, known as YEL, which usually costs out around 24% of the entrepreneur’s declared income. However, depending on the sector, entrepreneurs may have other compulsory insurances. It is a good idea to check these as well. Farmers need a separate pension insurance specifically for farmers. Grantees also need their own pension insurance. Patient insurance is compulsory if the business provides care for patients. Environmental damage insurance is compulsory in sectors where the risk of environmental damage is higher than normal. Motor insurance is required if the company owns cars.

If the company employs workers, you must take out employee pension insurance and accident insurance.

If you hire employees, you will need to provide them with statutory employer insurance, such as TyEL, or occupational pension insurance and Work accident insurance. Sen lisäksi työntekijöille voi ottaa työntekijöiden työttömyysvakuutuksen. Yrityksen toimintaa suunniteltaessa on otettava huomioon myös riskien mahdollisuus ja siksi kannattaakin tehdä riskienhallintasuunnitelma. Pakollisten lakisääteisten vakuutusten lisäksi yritys voi ottaa vapaaehtoisia vakuutuksia. Näistä kannattaa huomioida ainakin vastuuvakuutus ja tapaturmavakuutus. Yrittäjän tapaturmavakuutus kuuluu yrittäjän vapaaehtoisiin vakuutuksiin. Tapaturmavakuutuksen voi ottaa kuka tahansa yrittäjä. Sillä ei siis ole väliä, onko yrittäjällä toiminimi vai osakeyhtiö, Yrittäjän tapaturmavakuutus korvaa erilaiset tapaturmat ja niistä johtuvat sairaalakulut sekä mahdollisesti jopa työttömyyden. Tapaturmavakuutuksen sopimusehtoihin kannattaa tutustua tarkasti, sillä vakuutukset eroavat huomattavasti toisistaan. Yritykselle taas voi ottaa vapaaehtoisesti omaisuusvakuutuksen, keskeytysvakuutuksen ja vastuuvakuuden. Näiden vakuutusten tarpeellisuutta kannattaa pohtia yrityskohtaisesti. Aivan kaikki vakuutukset eivät ole tarpeellisia kaikille yrityksille.

More on compulsory insurance for the self-employed

9. Opening a bank account for your business

It is a good idea to open a bank account for a company even before it has business operations. It never makes sense to run a business through a personal account, it is much easier to open a business account.

The company’s money and your own money should be kept separate. So open a bank account for the company. Often, the entrepreneur will also need an invoicing program and a payment terminal. In the case of a private trader, you can manage your money through a normal bank account. However, if you want to open a business account with a fee, you will need to take a certificate of registration and a business plan to the bank. For all other types of business, a separate business account must be opened to manage the company’s finances. The bank account of the company must always be reported to both the Trade Register and the Tax Administration. For these types of companies, the bank will also want to see the extract from the Trade Register. All Finnish banks allow you to open a separate company account. Please note, however, that there is a separate charge for using a business account. The monthly fee varies from bank to bank, so it is also advisable to shop around for a business account. Even small savings can be significant in the long run.

10. Leave the accounting to a professional

The entrepreneur is obliged to keep accounts. The larger the business, the more important it is to keep proper accounts. Even small errors in accounting can be costly.

Many private traders do their own accounting, as single-entry bookkeeping does not require too much administrative know-how. The most important thing is to record the income and expenses of the business. It is also a good idea to keep receipts, as the tax authorities may want to see them in some cases. A business owner can also use an accounting software program to make bookkeeping easy. For example, in addition to bookkeeping, the UKKO Entrepreneurship service handles VAT and tax returns on behalf of customers. Customers can also automatically apply for a VAT relief. If the entrepreneur does not have the accounting skills, it is worth outsourcing to an accountancy firm or using an accounting software. Please note that even if you outsource your accounting, you are still ultimately responsible for it. However, even a start-up entrepreneur can outsource accounting and in many cases it is wise to do so. A professional accountant will know what to do to ensure that your accounts are fully compliant. For larger businesses, outsourcing accounting is almost compulsory. Limited partnerships, general partnerships and limited companies require double-entry bookkeeping, which requires a professional to handle it. Entrepreneurs should focus all their energy on what they do best. Accounting takes up an inordinate amount of time and therefore takes up a lot of the entrepreneur’s time. It is therefore worth outsourcing the accounting to a professional.

Because there are so many accountants out there, it can be difficult for a start-up to find the best one. Ask other companies for their experiences with professional accountants. You can also find accredited accountants and accountancy firms on the website of the Taloushallintoliitto (accounting association), who are guaranteed to know what they are doing. Authorized accountancy firms are subject to supervision by the authorities. Their staff are bound by accounting law, which is always useful for the company. This means you can trust your accountant, so the service is always of the highest quality.

11. Invoicing software for business use

Invoicing is one of the most important aspects of running a business. It is important to get it right when you start your business and before you start trading.

Invoicing allows a company to generate revenue. The invoice is usually sent to the customer as soon as possible after the service or product has been delivered. In some cases, the customer may be invoiced in advance. Small businesses should try to obtain the shortest possible payment period for invoices, usually as short as seven days. However, the most common payment period is 14-21 days, with a maximum of 30 days. The faster a business can invoice, the better it can keep its cash flow active. Many customers now prefer to send their invoices directly to their online bank, which is also the most convenient for the company. Online invoices are pre-populated with all the invoice details, making it really quick and easy for the customer to pay the invoice online. In addition, traditional paper invoices and invoices sent by e-mail are still in use. However, companies have nowadays adopted the practice of charging an extra fee for paper invoices. This makes sense, as sending paper invoices is not very environmentally friendly.

Invoices must contain certain information in order for payment to be successful. Such important information includes:

• the date the invoice was created
• running tag
• seller’s business ID number
• quantity and description of the goods or scope and description of the service
• the date of delivery of the goods, the date of performance of the services or the date of payment of the agreed advance payment
• the taxable amount, broken down by rate, and the unit price exclusive of tax, plus any rebates and discounts not specified in the unit price
• tax rate
• the amount of tax
• the basis for exemption from tax if no tax is included
• for amending invoices, a reference to a previous invoice

There are many different invoicing software used in Finland. Business owners and those who do their own accounting usually prefer free or low-budget invoicing software. The more features an invoicing software has, the more demanding and professional it is suitable for. If the accounting and invoicing is outsourced, the entrepreneur does not have to worry about invoicing. The invoicing company will also take care of any reminders and collections in case of non-recovery of payments from the customer. In this respect, too, it makes sense to outsource accounting, invoicing and all administrative tasks. The entrepreneur does not have to worry about things that do not fall within their remit. Sometimes, therefore, small investments lead to more freedom for the entrepreneur, giving him time to concentrate on developing their business. These are things to consider from the outset when starting a business and becoming an entrepreneur

becomes topical. Even before setting up a business, you can find out which things are worth outsourcing and which you can do yourself.

Thinking of starting your own business?

Have you dreamed of starting your own business, but the thought of making your dream come true is scary? Perhaps you doubt whether you’re up for it? Are you wondering when would be the right time to break away from a familiar and secure day job? Are you wondering whether it’s worth starting a business when you’re unemployed? You are not alone in your thoughts. Many people who want to become entrepreneurs are wondering the same things and waiting for the right moment to start a business. But it is impossible to define the right moment because starting a business always involves taking risks. It is therefore impossible to mark directly on the calendar when it is the right time to start a business.

Does starting a business feel scary?

Many people dream of starting a business, but are often held back by the horror of failure. But this is all for nothing, because what have you got to lose if you try? Without experimentation, you can’t achieve anything new either. So if you’ve had an interesting business idea on your mind for a long time, trust yourself and try it out! You can start by setting up a business, for example alongside your paid job, and work as an entrepreneur on the side. This will give you some idea of what it’s like to be an entrepreneur and how your business idea will work. If the business idea takes off, you may want to become a full-time entrepreneur later and leave your paid job. However, if you find that your business idea is not working, you will not yet have had time to make irreversible decisions about your paid job. This way, the risk of trying to make a go of it is lower than usual. And remember, there is always support for entrepreneurship. For example, business advice is widely available from start-up centres across Finland, and it is also worth asking your accountant/financial management partner for help. UKKO Toiminimiyrittäjyys is also there to support you in matters related to entrepreneurship. You can also leave the accounting entirely to us.

So what happens when the business is set up?

• You are ready to start a business. Market, sell and get your first customers and laugh on your way to the bank.
• Make sure your company’s accounts are done correctly from the start. Regularly report on the company’s finances to the tax authorities and other authorities. We recommend the UKKO Entrepreneur service for business accounting.
• Get the insurance you need to cover your activities.
• You should also read the guide for self-employed entrepreneurs.
• Here’s another checklist for the start-up entrepreneur

If you still haven’t had the courage to click and start trying, here’s your last chance:

Note! UKKO.fi is not responsible for the accuracy or timeliness of the information on this page. This article was first published on 30.1.2017 and has been updated on 7.6.2024.

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