Change is good

Marju Silander, Managing Director of the Women Entrepreneurs of Finland, sees many solutions for improving the state of the economy. One key factor is to seek growth through internationalisation and transfers of ownership.

Finnish working life and enterprise structure have been in turmoil in recent years. Marju Silander, herself an entrepreneur by background, has been on the front line of this restructuring. Prior to her appointment as Managing Director of the Women Entrepreneurs of Finland, Silander had earned her stripes, among others, at the Regional Organisation of Enterprises in Helsinki.

“We have changed from a Finland of large corporations to a Finland of micro-enterprises.”

According to Silander, Finnish legislation is still living in the time of large corporations even though the current Government strives to revise the structures of working life and to dismantle unnecessary regulation.

“Most jobs are created in small and micro-enterprises. By following the Think Small First principle of the EU, Finland Ltd could be brought to the present day,” Silander ponders.

Small enterprises face a new situation

Silander is concerned about the lack of international growth. Economic growth centring on Europe does not seem to trickle to Finland.

“Small enterprises face the challenge of how to reach the international growth market. A strong domestic market is not enough to stop the spiral of increasing government debt: in practice we are sitting at the same table circulating money from one purse to another,” Silander summarises the situation.

She believes that technology-driven industries, in particular, have growth potential. Sustainable development and the circular economy, ageing of the population and the health and wellness boom offer diverse opportunities for creating new products and services for the international market. Younger entrepreneur generations also have the enthusiasm to venture out into the world.

“It’s no longer necessary to think that first we’ll establish a company and then we’ll go international. Instead, there can be a bigger picture from the very start,” Silander says.

Being an entrepreneur has become attractive: young entrepreneurs are increasingly eager to seize the opportunity to build exactly the kind of life they have dreamed for themselves.

“In addition to the cultural shift, the many years of entrepreneur training given by educational institutions and entrepreneur organisations are finally starting to bear fruit,” Silander rejoices.

Transfers of ownership add momentum to Finnish work life

Internationalisation is not an option for all entrepreneurs. Certain local services cannot be globalised or digitised, and boosts for business must be sought through other means. Silander says that transfers of ownership are a pivotal tool for growth in the Finnish economy.

“At present we have more than 80,000 entrepreneurs over 55 years of age. Nearly one third of them have announced that they will wind up their business when they retire. It is also known that, in general, one transfer of ownership affects on average four people. This means that many jobs are in the danger zone,” Silander ponders.

Lack of information is one reason why there are so few transfers of ownership.

“Especially sole entrepreneurs are often too modest when putting a value on their enterprise. As a trade association within the Federation of Finnish Enterprises, we also conduct serious dialogue with Finnvera about how we could make entrepreneurs understand the realisable value of their enterprises so that they can continue to offer jobs in the future as well,” Silander explains.

She mentions a case where a woman entrepreneur was about to wind up her enterprise for good, but decided in the end to ask for advice about selling the enterprise. The outcome was that the entrepreneur was able to supplement her pension income with a profit of nearly 10,000 euros by splitting up the company’s inventories and operations into packages ready to buy.

“In a way, we squander our assets if no deals are made. Entrepreneurs should feel proud and pleased for having created something that is useful for others, too,” says Silander.

Finding the right partner is rewarding

For a starting entrepreneur, buying an existing enterprise is an excellent way to pick up speed quickly. The entrepreneur does not need to start from scratch, since networks, premises and processes are already available. In fact, persons who have become entrepreneurs by buying an enterprise are on average more satisfied with being an entrepreneur and feel that they have made a go of it.

According to Silander, buyers’ knowledge of company acquisitions is also scanty.

“Many people come to Enterprise Agencies with their own ideas. If the idea isn’t viable, it could be proposed that a development partner be sought in an existing enterprise,” Silander suggests.

When a novel idea is combined with an operating enterprise, the result may be something brand new. Earning money on the basis of one’s own idea will then take less time and, on the other hand, the idea may also be refined in the process.

What’s more, transfers of ownership are an excellent way to expand existing business operations.

“When two enterprises are put together, the result may sometimes be greater than two. It would be really valuable to get people together at an earlier stage instead of waiting until the enterprise has suffered from years of underdevelopment,” Silander sums up.

Silander compares selling an enterprise to selling a home: usually everyone selling their home makes sure that they get as good a price as possible when closing the sale. She urges entrepreneurs to keep this philosophy in mind at every stage of developing their companies.

Quotes

“Finland is such a small country that cooperation is extremely important. We cannot waste time by arguing among ourselves; instead, we must stand as a united Finland against China, Germany or Sweden.”

“If the only plumber in the village closes up shop, it should be in the interest of towns and municipalities to look for a new entrepreneur in the locality rather than letting operations cease and allowing residents’ basic services to decline.”

“Business Infrastructure Analysis, which is a public service provided free of charge, is an excellent way of keeping abreast of a company’s development potential and value. It would be good if every company were given a kind of ‘annual inspection’ at certain stages of the life cycle.”

Text: Noora Puro Photo: Heidi Strengell