Small business success: A tale of two Finnish stores
As Finland’s economy emerges from several years of recession, it is small businesses that have traditionally lead such recoveries, and which could change the way the economy functions in future.
Small businesses keep Finland afloat
In a gleaming stainless steel Espoo kitchen, Master Chocolatier Bryn Phipps carefully pours tempered chocolate into truffle moulds. A few minutes later, cooled on a marble slab, the organic chocolate shells are ready to be filled with taste combinations like gin and juniper, or balsamic strawberry.
A few kilometres away in downtown Helsinki, 1950s rockabilly music plays in the background as Nina Walden carefully draws her cutthroat razor against the taut skin of a customer’s lathered-up neck, giving him a traditional shave as he reclines in a vintage, up-cycled barbers chair.
The two small businesses seem worlds apart, but in fact have much in common. They both launched during the worst years of Finland’s economic slump, and they both expanded already in 2016: Phipps’ Arctic Choc moved to new premises, adding a showroom, storage space and a bigger kitchen. Walden opened Classic Gentleman’s Shop in Helsinki’s Töölö neighbourhood, focusing on high-end grooming products and accessories, to compliment her nearby original Classic Barber Shop.
These businesses are not isolated examples of intrepid entrepreneurs taking a gamble during a recession. In fact, small businesses make up the largest share of enterprises in Finland.
“You can find small businesses everywhere, because Finland is a country of small enterprise, and small employer enterprises,” says Jaakko Salmela, a senior statistician at Statistics Finland. “Most of the jobs are created in small enterprises,” he adds.
According to official figures, there are more than 350 000 small businesses operating in Finland – employing one to ten people. That’s 1.4 million people in total, with 30 per cent of them in the service industry. And that makes small businesses a powerful engine at the heart of the Finnish economy.
So what sort of businesses are these? It could be sole traders or limited companies. It might be someone with a fixed job, and a second job for extra income, or someone working from home sitting at their kitchen table. It can be people employed in tourism or construction; manufacturing businesses or artisans; family businesses that have been passed down through several generations; agricultural workers on farms; coffee shops in rural towns and villages; software developers and graphic design collectives in the city…or bespoke chocolatiers and on-trend barbers.
Londoners turn into chocolatiers
Phipps and his partner Tiia Westman moved to Finland from London just two years ago with a dream to start their own organic chocolate business. Brynn had worked in a Jamie Oliver restaurant, and also in Helsinki’s fashionable restaurant Gaijin. But it took a leap of faith to launch Arctic Choc.
“It was challenging to start our own business,” says Phipps, a 26-year old who grew up in South West England. “It took us six months to get everything organised, and all the paperwork. We had to have a plan of how and why we were going to do stuff. And obviously it was a lot of pressure on Tiia because it all had to be done in Finnish, and she had to translate it all. It was a long process.”
Arctic Choc got its initial financing for specialist equipment and kitchen rental from Finnish banks, and the business has continued to take bank loans in order to expand, and keep up with demand for their products.
“The main benefits are to be our own boss, to make all our own decisions,” explains Phipps. “But the main challenge is making yourself known and unique, to stand out from the competitors.”
With products now stocked in more than 60 Finnish supermarkets and boutique shops, their business plan seems to be working well. Arctic Choc is expanding its offerings with dairy-free milk and white chocolates, as well as organic vegan chocolate where they spotted a gap in the market.
“We have to keep up with trends,” says Westman. “We have to keep things new, and not stay the same.”
Grooming makes a booming business
Walden took a totally different route to setting up her businesses, financing her stores herself without taking bank loans. She wasn’t really aware if there was any official government help to launch a small business, and the ongoing recession wasn’t something she thought about too much either.
“The economy is not great, but I don’t think of it as a risk to expand the business,” explains the 34-year old. “But then again, I didn’t have to take any money from anywhere, I had my own money,” she adds.
Inside her new gentlemen’s grooming shop, niche products from Finland and abroad sit on old wooden shelves. The razors and mustache wax, badger bristle shaving brushes and beard oil might be specialist products – and priced accordingly – but the second shop has been a success since opening in April.
“My business is blooming… and the economy always picks up,” says Walden. “And anyway, I am not too scared to fail.”
The nature of small businesses
Jan Stenbeck, who teaches entrepreneurship at Helsinki’s Hanken School of Economics, says that the nature of small businesses differs across Finland, from urban areas to rural.
“If you look at cities, there are simple businesses like shops,” Stenbeck explains and continues, “But in the countryside someone might run the local post office, they are the local transportation company, they rent out their summer cottages and things like that”
Stenbeck says that the way small businesses operate is also changing, as people adapt to new ways of working, and the new opportunities that technology brings.
“In Finland we see Wolt and Foodora who do transportation for restaurant – students might do that, and at night drive for Uber. Small businesses, how they influence the Finnish economy, that will gradually change. It will become a more multi-faceted entrepreneurship-driven, small business economy.”