On Becoming an Entrepreneur


I had a lot of questions about becoming an entrepreneur, and for many years I was firmly against it. Last week I decided to start a company anyway, and now I'm sharing with you the Q&A that went on inside my head before I made the decision. I must warn you, this is a very boring blog post that contains information instead of funny bits. Sorry. Also the information is only valid in Finland. Sorry again.

Will I lose all unemployment benefits? (This was perhaps The Question for me.) The magic word is PART-TIME. If you work through your company only part-time and you can prove it (=if the hours are so few you could realistically accept a full-time job), then you will be considered a PART-TIME ENTREPRENEUR and your unemployment benefits will be just fine. This is not related to money, I'm told - it's literally the hours you work they're interested in. If you earn most of your income as an employee, you can still stay in your old unemployment fund (työttömyyskassa). If, on the other hand, you'll start earning most of your income as an entrepreneur, they have unemployment funds of their own that you can join.

What do I even need it for?? I founded the company mainly to be able to work with singers professionally. The other options are not great for me, but they might be great for you - so here they are:

  • Use cash and everyone's happy. No hassle. It is, on the other hand, quite illegal.
  • Use a company to do the billing for you. This is not very cost-effective, because they take a certain percentage of your income as a fee for making your life easier. Your life will not be that much easier.
  • Use your daddy's company. This might be a fantastic idea, except that I don't have this option available so I had to fly solo.
What should I charge? What about all those taxes and other weird stuff? Charge what you want to earn, PLUS your expenses. If you keep the company very small, the expenses will be equally small, so you can also charge less. If you earn less than 7800€ per year through the company, the only thing you need to pay is taxes. Then up to 10.000€ per year you need to pay for a pension as well, and that's 18% of your income. Earning over 10.000€ in this business you'll have to start paying ALV, which is a Finnish something something tax, and that's 24% for teaching, less for some other things. So, earning more, your expenses might suddenly skyrocket, and you'll have to be aware of more stuff. My plan: keep it really small and simple for now to have time to learn all the stuff - plus it's less of a bother that way.

Should I make my prices public? I did. For me there's too much secrecy going on in our field, so I wanted to be transparent. It's so frustrating to always have to negotiate your salaries in the dark, not knowing if you're grossly underpriced. I still don't know if what I charge is in any way related to what other pianists make, but at least they'll have one point of reference now on my website. I wish I'd had that when I started working.

Will I have to get a corporate account? They're expensive! For a company that consists of a single person (toiminimi in Finland) you can just open a normal account that's free. Technically you wouldn't need even that - you could just use your own account - but it's easier for yourself to keep them separate. For tax purposes you'll need to separate the company's expenses from your own anyway, so best to have them in different places altogether. Then you can "pay yourself salary" from the separate account by simply transferring money to your own. No complex calculations needed.

How will I ever learn how to send invoices? By reading instructions and by downloading a free example from online. There are hundreds available. What you'll need is all the basic info that you know an invoice has, plus you'll need to number them. As far as reference numbers go, you do not want to get into those. They're a bitch, and they only work on corporate accounts. You can use a message instead - all you need to do is to somehow connect a sum coming to your account to an invoice you've sent.

Bookkeeping is so hard. Should I hire an accountant? If it feels impossible, you should. I decided to learn it. The simplest thing of all, if you want minimum hassle, is to just bill your clients and not use the company for buying things. Then your taxes and bookkeeping is really very Marie Kondo. Nothing there. If, however, you buy things for the company, you just need an explanation of each sum that goes out of the account. A receipt and an explanation. Then at the end of the year, you'll send all this stuff to a tax person who wants them. Not higher mathematics, this.
If you want to minimize the amount of taxes you pay, you can of course spend thousands of hours optimizing this and saving in that, but I couldn't care less. The taxes I pay would make you laugh (or cry), so I don't really care if I would save three euros per year in clever tax schemes. Let the state take all the euros they will.

What if I have to hire someone else?
Don't. I don't know anything about it, and I don't want to start reading about it either having read through all this other shit. Less people, less stress.

What does it cost to register a single-person company?

If you do it online, it's 60€.

Will it be fun at all?
Not sure yet, but I'll keep you posted. See you on the other side!