[PBL] Trigger 6

I. Business plan

Can be business model canvas?



Business plan

A business plan is the company’s manual, required for launching a successful business. Its role is to assist in systematically outlining and planning the business and profitability of a new enterprise.

Key contents of the business plan

  • Business idea
    What do you sell? Who do you sell to? How do you sell?
  • Entrepreneur’s strengths 
    The expertise, experience, strengths, knowledge of the line of business and networks of the person establishing the business.
  • Products and services 
    The competitive environment, image, competitive advantage sought, price level, margin structure and so on.
  • Customers and markets
    Customer groups or target groups, their consumer behaviour, location of premises, numbers and methods of reaching them.
    Market situation in the line of business and sector, ratio supply to demand, competitors’ strengths, weaknesses and strategies, differentiating factors in view of competitors.
  • Practical arrangements
    Premises, location, required equipment, employees and initial financing, advertising and marketing, web pages, insurances, accounting etc.
  • Financial statement 
    Investments in premises and equipment, capital required to cover costs of establishment and the first few months in operation, financing instruments.
  • Profitability calculations 
    Sales margin required to cover fixed costs and amortisation of loans or other financing costs, pricing principles for gaining the required sales profits in order to achieve the minimum profit objectives.


Company form


https://www.yrityssuomi.fi/en/yritysmuodot (Website of Ministry of Economic Affairs and Employment)

1 Private entrepreneur

Number of founders

The entrepreneur works alone or with his or her spouse.

Need for capital

Little capital needed


The entrepreneur makes the decisions himself/herself.

Risk and responsibility

The entrepreneur is responsible for the business with his/her personal property.

Withdrawal of funds and profit distribution

Funds are withdrawn as private withdrawals; no wages are paid.


Some of the earnings are taxed as capital income, some as earned income.

General description and suitability

The entrepreneur’s own work efforts make all the difference, decision making is flexible; suitable for family businesses, for example.


2 General partnership

3. Limited partnership

Number of founders

One or more persons.

Need for capital

The share capital for private limited liability companies is €2,500, and €80,000 for public limited liability companies.


General Meeting, Board of Directors and Managing Director.

Risk and responsibility

The owners are responsible with the amount of share capital they have.

Withdrawal of funds and profit distribution

Shareholders: dividend income, wage income depending on work effort.


Limited liability companies pay 20 % in tax on their result.

General description and suitability

Suitable for companies that require capital. Heavier and more complex than other business types in terms of management.


4. Limited liability company

5. Cooperative





II. How to finance a startup business

Startup finaincing Cycle


  1. Angel investors

What it is: Angel investors might be professionals such as doctors or lawyers, former business associates — or better yet, seasoned entrepreneurs interested in helping out the next generation. What matters is that they are wealthy and willing to invest hundreds of thousands of dollars in your business in return for a piece of the action.



  1. Venture Capitals


Venture capital is financing that investors provide to startup companies and small businesses that are believed to have long-term growth potential. For startups without access to capital markets, venture capital is an essential source of money. Risk is typically high for investors, but the downside for the startup is that these venture capitalists usually get a say in company decisions.

  1. Crowd Funding

Crowdfunding is the use of small amounts of capital from a large number of individuals to finance a new business venture. Crowdfunding makes use of the easy accessibility of vast networks of people through social media and crowdfunding websites to bring investors and entrepreneurs together. Crowdfunding has the potential to increase entrepreneurship by expanding the pool of investors from whom funds can be raised beyond the traditional circle of owners, relatives and venture capitalists.


Example: Kickstarter

III. What is accounting and its documentations?

Accounting has been defined as:

the art of recording, classifying, and summarizing in a significant manner and in terms of money, transactions and events which are, in part at least, of financial character, and interpreting the results thereof.(AICPA)


Accounting information helps users to make better financial decisions. Users of financial information may be both internal and external to the organization

Four Types of Financial Statements

The four main types of financial statements are:

  1. Statement of Financial Position

Statement of Financial Position, also known as the Balance Sheet, presents the financial position of an entity at a given date. It is comprised of the following three elements:

  • Assets:Something a business owns or controls (e.g. cash, inventory, plant and machinery, etc)
  • Liabilities:Something a business owes to someone (e.g. creditors, bank loans, etc)
  • Equity:What the business owes to its owners. This represents the amount of capital that remains in the business after its assets are used to pay off its outstanding liabilities. Equity therefore represents the difference between the assets and liabilities.

View detailed explanation and Example of Statement of Financial Position


  1. Income Statement

Income Statement, also known as the Profit and Loss Statement, reports the company’s financial performance in terms of net profit or loss over a specified period. Income Statement is composed of the following two elements:

  • Income:What the business has earned over a period (e.g. sales revenue, dividend income, etc)
  • Expense:The cost incurred by the business over a period (e.g. salaries and wages, depreciation, rental charges, etc)

Net profit or loss is arrived by deducting expenses from income.

View detailed explanation and Example of Income Statement


  1. Cash Flow Statement

Cash Flow Statement, presents the movement in cash and bank balances over a period. The movement in cash flows is classified into the following segments:

  • Operating Activities: Represents the cash flow from primary activities of a business.
  • Investing Activities: Represents cash flow from the purchase and sale of assets other than inventories (e.g. purchase of a factory plant)
  • Financing Activities: Represents cash flow generated or spent on raising and repaying share capital and debt together with the payments of interest and dividends.

View detailed explanation and Example of Cash Flow Statement

  1. Statement of Changes in Equity

Statement of Changes in Equity, also known as the Statement of Retained Earnings, details the movement in owners’ equity over a period. The movement in owners’ equity is derived from the following components:

View detailed explanation and Example of Statement of Changes in Equity


IV. Type of taxes and costs


Value added tax

The new VAT rates are 24% (the general rate), 14% and 10% (the reduced rates).



Income taxation of individuals


Inheritance and gift tax

If decedent or beneficiary lived in Finland at the date of death, Finnish inheritance tax will be payable on any receipt of assets as an inheritance, regardless of whether the beneficiary is a natural heir or a beneficiary of a last will and testament.

Recipients must pay gift tax for an asset worth €5,000 or more received as a gift. This also concerns gifts received from the same donor during a three-year period if the aggregate value reaches €5,000 or goes above it. The gift tax return must be submitted to the Tax Administration within three months of receipt. (https://www.vero.fi/en-US/Individuals/Gifts)


Transfer tax

When you acquire real estate, a share in a housing company or other stocks, you must pay transfer tax. This tax is self-assessed and usually paid by the buyer.

Corporate stock, receipts of dividend, emergence of constructive dividend


Variable cost

Variable costs can include direct material costs or direct labor costs necessary to complete a certain project. For example, a company may have variable costs associated with the packaging of one of its products. As the company moves more of this product, the costs for packaging will increase. Conversely, when fewer of these products are sold the costs for packaging will consequently decrease.

Read more: Variable Cost Definition | Investopedia http://www.investopedia.com/terms/v/variablecost.asp#ixzz4dGDELDg4
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Cost of goods sold (COGS):

Cost of goods sold is the accumulated total of all costs used to create a product or service, which has been sold. These costs fall into the general sub-categories of direct labor, materials, and overhead.

Fixed cost

A fixed cost is a cost that does not change with an increase or decrease in the amount of goods or services produced or sold. Fixed costs are expenses that have to be paid by a company, independent of any business activity.

Examples of fixed costs include insurance, interest expense, property taxes, utilities expenses and depreciation of assets. Also, if a company pays annual salaries to its employees irrespective of the number of hours worked, such salaries must be counted as fixed costs. A company’s lease on a building is another common example of fixed costs, which can absorb significant funds especially for retail companies that rent their store premises.
Different category:

Operating cost:

Operating costs are expenses associated with the maintenance and administration of a business on a day-to-day basis. The operating cost is a component of operating income and is usually reflected on a company’s income statement. While operating costs generally do not include capital outlays, they can include many components of operating a business including:

Operating expense



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