Buying an existing business in Finland

Updated: Apr 2


There are many ways of becoming an entrepreneur. We have talked about establishing a sole trader company or a limited company, but what if you are not interested to build a business from scratch but continue an ongoing business.


The benefits of continuing a business is that there is more guarantee for success. According to a Finnvera study, 92% of the entrepreneurs continue the business and the survival rate after five years is still over 81,5%. The numbers are overwhelming when compared to half of the newly established companies that goes bankrupt or cease within five years of operation.


When buying an ongoing business, the entrepreneur are able to acquire the clients, staff, skillset, cashflow and IPR which according to studies, a faster route for a successful business. There are of course some risks to consider before buying a business and it is safer to have a professional to help you with the details and process.


4 ways to buy a business


Buy the whole business or operations

There are many available ways in buying a business. You can buy the whole company or a business. If you purchase the company, you will become the owner of the shares and its assets and liabilities. This may include the business name, equipments, bank accounts insurances and various business operations. On the other hand, if you buy the business, you will not get the whole legal entity of a company structure but the business assets that are agreed upon.


MBO

You can also purchase a business through a management buyout,short for MBO, considering that you are one of the executive managers of the company. This acquirement makes it less riskier for you as a new entrepreneur because you already understand the company's strategies and operations. This kind of opportunity arises when older entrepreneurs give up their ownership of the company or the company wants to remove a part of the business operations that is not its core. It is usually a delicate situation and trust from both sides are essential to achieve a positive outcome.


Franchising

You can become an entrepreneur through franchising by buying the rights to use the franchise company´s trademarks, business systems and processes. This way, you can start becoming an entrepreneur without thinking of the sales and marketing concept alone. You will get training and support from the parent company or the franchisor.


Generation Change

If your parents own a successful family business and they want to pass their ownership to you. They can pass the ownership through generational change (sukupolvenvaihdos). There are benefits of taxation, capitalization or a combination of these processes, the launch of the transition considering the roles and responsibilities of you as the successor and other relevant stakeholders involved in the process such as your siblings or other family members. A successful generation change will need careful planning and it might take months or years to complete, but then again, this is another opportunity to become an entrepreneur.


If you are thinking of entrepreneurship, considering of buying an existing business should be one crucial factor than building a business from scratch. This way, you will have a proven concept, cash flow, and paying customers and time to develop the business further. After all, we become entrepreneurs to secure our livelihood and future.



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