Trigger 6

Learning objective 1. What to consider when setting up a financial plan?

The Financial Plan is part of the Business Plan and usually should include estimates on Funding, Profitability and Sales:

1. Investment calculation: is used to show the sources of funding and the expenditure requirements for the business in its initial stages.
2. Profitability calculation: is used to estimate where the break-even position (critical point) arises for a given price level and profit margin, as sales volume is varied. This can be used to analyse whether a sales target is realistic.
3. Sales calculation: the minimum invoiced sales target indicated by the profitability calculation can be apportioned among the various customer groups. This makes it easier to assess the importance of the customer relationships; any discounts and variable costs for products being sold shall be taken into account.

Sources:

1. Guide - Becoming an Entrepreneur in Finland: http://uusyrityskeskus.fi/sites/default/files/perustamisopas_suk_2016_en_web.pdf

Learning objective 2. How to setup accounting of a small business?

According to the Finnish Accounting Act, all businesses have a legal obligation to keep accounts. It is worthwhile for entrepreneurs to outsource their bookkeeping, i.e. to pay for a service from a firm of accountants, so that they can concentrate on earning their income. In choosing the firm of accountants, the entrepreneur should keep in mind that (s)he is eventually responsible also for the bookkeeping done by the firm of accountants. Therefore the entrepreneur must understand at least the basic concepts of the financial management of a company.

1. Day-to-day bookkeeping, which is dealt with during the accounting period, is based on corroborative documents. These include sales invoices, purchase invoices, payslips and bank statements.
2. Accounting period is normally 12 months.
3. Financial statements - when the financial period has ended, a financial statement shall be prepared and large enterprises shall draw up an annual report. The financial statement of a small enterprise shall include an income statement, a balance sheet and notes to the financial statement as well as a list of books and records. An entrepreneur shall not have to prepare a financial statement if, during the last ended financial period and the preceding financial period, no more than one of the thresholds is exceeded:

• balance sheet total exceeds EUR 350,000
• turnover exceeds EUR 700,000
• on the average, 10 employees employed during the financial period.

       4. Audits - the requirement to have a regular audit applies to general partnerships, limited partnerships, limited companies and co-operatives. However, according to the Finnish Audit Act, an auditor does not need to be appointed in small businesses, if no more than one of the following has been fulfilled in the last accounting period and the period that immediately preceded it:

• total sum of the balance sheet exceeds EUR 100,000
• net sales or the corresponding income figure exceeds EUR 200,000
• or on average, there are more than three employees.

Sources:

1. Guide - Becoming an Entrepreneur in Finland: http://uusyrityskeskus.fi/sites/default/files/perustamisopas_suk_2016_en_web.pdf 

Learning objective 3. What legal aspects should one consider when starting a small business in Finland?

Legal aspects are involved in the following areas:
- form of business
- licenses
- financing
- unemployment security
- taxation
- start-up grant possibility
- registration
- accounting and money transactions (templates)
- business premises
- personell
- agreements.

Sources:

1. Guide - Becoming an Entrepreneur in Finland: http://uusyrityskeskus.fi/sites/default/files/perustamisopas_suk_2016_en_web.pdf