Which to choose, light entrepreneurship or starting your own business?

Starting a small business and starting your own business may seem like the same thing at first, but on closer inspection there are big differences. While starting your own business requires more work and involves more risk, starting a light business is a lighter and more entrepreneur-friendly option.

Self-employment is a trend that has been going on for years and shows no signs of abating. Whether you are in the service or sales sector, it is important to consider which form of entrepreneurship suits you best.

We will now go through what the difference is light entrepreneurship and starting a business. After reading this article, you'll be one step closer to deciding which option is better for you.

Starting a business is not so simple

The first step in starting a business is to clarify your business idea. As starting your own business is not without risk, you need to have confidence in your idea and be ready to challenge it in the market. The business idea should therefore be refined well before the formal start-up of the company.

The key to setting up your own business is choosing the form of company. The most common company forms in Finland are limited liability company and business name. Other forms of company include general partnerships, limited partnerships and cooperatives. We will now look at the background to the two most common types of company.

Limited company

A limited company is the most common form of company in Finland. In a limited company, the owners of shares are liable for the company's obligations according to the amount of share capital they have invested. A limited liability company can be set up online.

Setting up a limited company costs the same as the fee for the Trade Register, i.e. €320 (online) or €380 (paper form), depending on the 2022 level.

A limited company is particularly suitable if you have big ambitions to grow your business, as it is the easiest way for investors to get involved in the business. It is also possible to buy an existing limited company, so you don't have to start from scratch.

Entrepreneur

Setting up a business name is easier than starting a company. It can also be set up online and the cost is not prohibitive: the price (2022) is €60 (online) or €115 (paper form).

A business name is usually the most appropriate form of company for the activities of an individual. The individual is responsible for the running of the business - both the finances and the business itself. For example, business owners often outsource accounting to external accountants.

Setting up a business requires paperwork

Depending on the sector and type of business, setting up a company requires different permits and documents, as well as official registration. The first step is to create a business plan once the business idea and the name of the company have been conceived.

The business plan sets out the purpose and goal of the business and how to get there. It is not only for the entrepreneur(s) themselves, but it is also required for statutory purposes.

All types of company, with the exception of private limited liability companies, require a certificate of incorporation. In addition, some sectors may require a separate authorisation document to carry out their activities.

The range of forms and documents is wide depending on the type of company. Once all the necessary documents and permits are in place, the company can be registered. Registration is handled by the PRH and the Tax Administration.

Light entrepreneurship is the easiest form of entrepreneurial work

Light entrepreneurship means that a person invoice the work they have done through a billing service company. In other respects, light entrepreneurship is like any other business - only the workload for invoicing, accounting and taxation is much smaller.

Light entrepreneurship is well suited to service work and gives you the best opportunity to try your hand at entrepreneurship. For many, it has served as a stepping stone to full-time entrepreneurship in the form of a business, a partnership or a limited company.

The best thing about being a light entrepreneur is that it is completely risk-free and completely free to start. Next, we'll take a closer look at what it takes to become a light entrepreneur and what to consider when starting out.

Setting up a small business

Before making the actual decision to become a light entrepreneur, it is a good idea to review your own starting points for becoming a light entrepreneur. What kind of service would you like to offer, how will you go about gathering a clientele and how will you price the work you do?

One of the best things about being a light entrepreneur is that you don't have to have all the answers, because you only pay for what you charge for. Rather, the approach encourages you to try out your own skills and business ideas as an entrepreneur. The world isn't finished yet, so why should you be?.

It is possible to be a light entrepreneur and an unemployed jobseeker at the same time. It is equally possible to be a light entrepreneur, a self-employed person and an employee at the same time. You can also work as a light entrepreneur while studying and try out the knowledge you have gained from your studies in the world of work.

Becoming a light entrepreneur is a snap, and you can start billing immediately after registering with the billing service. As a light entrepreneur, you are under no obligation to do anything - you only pay for the service when you invoice your own work.

Light entrepreneurship or starting a business?

There is a wide range of different forms of entrepreneurship. Which would suit you best?

Traditional entrepreneurship is suitable when...

1. want to hire workers,
2. if there are several owners of the activity, or
3. a large amount of seed capital is invested.

None of these fit your plans? Then light entrepreneurship might be for you!

As we mentioned earlier, starting a light business is easy and completely free. All you have to do is register as a customer of the billing service of your choice and make sure that the service receives your tax card. You are then free to start working.

A light entrepreneur does not have to worry about paying input tax, VAT or other similar bits of red tape that come with setting up a traditional business. Nor does the light entrepreneur does not have to worry about insurance, as the billing services will help.

Why light entrepreneurship?

Light entrepreneurship has several advantages that other forms do not have. It is best suited to those who want to start with a low threshold to put their skills or business idea into practice in an entrepreneurial way.

The light entrepreneur avoids many of the obligations that are otherwise part of entrepreneurship, such as from the accounts and billing. Going light is an easy and good solution to earn extra income.

For example, light entrepreneurship is suitable for someone who is unwilling or unable to commit to working for a single employer. It is a very practical way to try entrepreneurship and grow your customer base without losing your general social security (the actual entrepreneur organises his/her own social security).

If your business idea takes off, it's easy to jump from being a light entrepreneur to, for example, a limited company or a limited liability company. In this case, you will have already built up a basis for your business and will be more confident in your idea.

Light entrepreneurship is the simplest option for you if you are interested in entrepreneurship.

Kevyesti.fi as a partner for light entrepreneurs

It is worth competing carefully for billing services and finding out exactly which service is best for you. When competing, you should pay attention to the price of the service, insurance and other service elements.

At Kevyesti.fi, we make sure that your financial management works efficiently and you can focus on the core business. Find out more about our services and sign up today.