“Acquiring an existing business makes it easier to obtain a residence permit”
Melissa Jovanen is an American-born woman from Michigan with strong Finnish roots. Almost 7 years ago, after visiting Finland frequently, she decided to come and settle in the country her parents emigrated from more than half a century ago. Now she runs Iin Sillat, a tourism business in northern Finland.
"For me it was like coming home to my roots. I think that I fit more into the culture and society here than in America," she explains.
Melissa is a biologist and before coming to Finland she was studying at Michigan State University to be a doctor, but she was not entirely satisfied with her life: "It was very stressful and I wanted to get out of it".
Being someone between an immigrant and a returnee, and although her journey has been "much like coming home", not everything has been easy for her. In some aspects she had to face challenges that are common to many newcomers, such as a lack of language fluency and employment.
She says she doesn't remember the exact moment she decided to become an entrepreneur, but it has made her life easier. Acquiring an existing business has provided her with an occupation, it has made it easier to obtain a residence permit and integrate into a community.
QUESTION: Why did you become an entrepreneur?
ANSWER: That wasn’t planned. I kind of moved here without much plans, I was studying first International Business at Haaga Helia and I wasn’t sure what I was going to end up doing.
Q: Who first gave you the idea?
A: I think it was talking to other immigrants that traditional jobs are very difficult to find. For example, my partner, who had just graduated from Pharmacy school, could not even find a job stocking drugs in a pharmacy warehouse. I was establishing contacts through my courses with other immigrants and those who did not come with a job offer had a lot of problems or had started their own businesses. So I started looking into that.
Q: Why did you go for a business acquisition instead of starting from scratch?
A: Starting a business from scratch was very scary, very risky, and didn't quite fit my personality. Bringing in new ideas is my strength. So I started to think that if I buy a business from someone who is retiring, for example, or moves on to something else, I'm very good at looking at something and seeing where and how I can improve it.
Q: What are the actual benefits of an acquisition?
A: Well, for me the question was more what can I contribute to something. I can see something running and think how can I improve it, how can I add my own personalization to it. Maybe now, after five years running my business, I have enough experience to start something from scratch, but then I didn't have the experience, confidence, or enough resources to do it.
In addition, there is the issue of the residence permit, which is much easier to obtain if you can show that you have a profitable business.
Q: Would you say that acquiring a business is a good idea especially for foreigners?
A: Yes, because you can show that you have something stable instead of telling the immigration authorities that you want to stay because you have just a business plan to start from scratch. You have something already established, you can say: this has been the income, this is the history and I just continue with this. For Migri it looks better.
Many offers on the internet
Q: So, what kind of business did you buy?
A: It is a tourism business, accommodation, located in the municipality of Ii, in northern Finland. We work as a camping in summer and a hotel in winter.
Q: How did you find it?
A: In the internet. I used in my free time to browse the site yrittyspörssi.fi, where you can find all kinds of businesses for sale. I didn't limit myself; I looked at everything everywhere in Finland. And this was not the first business I looked at; I had researched others before.
Q: So, you didn't have a prior idea of what you wanted to do and in what field?
A: No (smiles), because I almost bought a restaurant in Tampere, an adventure park in Tuuri and I also looked at a tea and chocolate shop in Rovaniemi. I was looking at everything. I didn't say no to anything because I knew the answer would come if I didn't limit it.
Q: What made you finally choose Iin Sillat? Why was it better than other options?
A: Well, I didn't find the problems. In the others I found problems very quickly. When I was looking deeper or going to the place or looking at the paperwork, at some point I said: okay, I see the problem, now I know why this is for sale. But with this one, I went there and it was a feeling, it felt good, the place was beautiful, there was a great atmosphere there, the owners were very genuine and I didn't have the feeling that they were trying swindle me or hide something.
Q: Did you look at the papers yourself or did someone else?
A: I did it myself first, but when I got very serious about acquiring the business I hired a lawyer to review them. Yes, I could have gotten some free advice, but I felt it was such a big investment that I didn't want to take a chance with some public service. I wanted somebody that had some stake in it.
Q: What about the funding? Did you have to apply for it?
A: I had real state that I sold in the US, so I was able to fund the initial purchase on my own.
The importance of profitability
Q: What is the main thing to look at when acquiring a business?
A: Its profitability and its potential. Because most of the places I looked at weren't very profitable or there were some limitations. This place was profitable as it was, and looking at it, I could immediately see where I could make improvements to increase profitability.
Q: And have you succeeded?
A: In three years I increased the turnover three times from where the original owners had it. I did what I could without major investments or expansion that would ruin the identity and spirit of the business.
Q: Are there any potential mistakes that you would like to warn others about?
A: You have to have your interest, your heart in it, some kind of connection, some kind of feeling, but you also need to see that the numbers are there to back it up. You cannot just buy solely on emotions, but you are also making an emotional investment. I have seen other entrepreneurs who bought without emotional investment, only on the profitability and things did not go well. And I've seen the other way around, others who bought on emotional investment and without taking into account the profitability and it did not go well. You need to have a balance in combination of both.
Q: Any mistake you personally regret?
A: I didn’t realize how much free help was out there. I was very suspicious of business advisers and other people coming to try to help me. For me, this was a huge cultural difference and I probably missed a lot of opportunities in the beginning. One of the first things a business buyer should do is contact the local business support in the area where they are looking, especially outside of the big cities. Smaller municipalities want to attract and support entrepreneurs, so they dedicate resources and often have an employee who helps business development.
Q: Does being an entrepreneur in Finland have any advantages?
A: I think there are advantages. This support we receive from the municipality for example: I have the possibility to go to the municipality and talk to them and agree with the authorities on what is best for the business and the community. I am also a member of the Federation of Finnish Entrepreneurs and the best I have gotten from them is the networking. You need to be able to network here, that's essential. In the United States everything is more competitive and there is not much cooperation, but here we have to use the network ties even with the businesses that we may consider competitors, we somehow help each other in the area. Here the competition is not the enemy; each of us can offer something and we send customers to each other.