Regulations, competition, business support services and external funding opportunities are all parts of the business environment. This way business environment can both aid and limit your business success.
Heikki Immonen, Karelia University of Applied Sciences
Business environment can both limit and extend the number options you have to design your business model. For example, if there is a lot of startup funding available in your region, it can be a great boost t the resource element of your business model. An example of how the environment can be a limitation to your business model design options, is a situation where your competitors have patented several important technologies. What these patents do is limit what technology you can use in your products on those market that are covered by the patents.
- Some business environment features are nation-wide, like regulations, policies and intellectual property
- Some features are very region-specific, such as funding options and other business services available
If you are starting new business in a foreign country or region, getting familiar with the business environment is especially important. In such as situation you might easily miss some limiting factor that would be clear to local entrepreneurs. In situations such as these, public business advisors can be a boost.
Regulations and intellectual property are important, mostly limiting factors of the business environment
Of those aspects of the business environment that are often seeing as limiting, the most important are:
- Regulations governing types of business and field of business
- Intellectual property
Different types of businesses are regulated differently
One of the key features to be aware off, is that different types of businesses are affected by different regulations and requirements.
Depending on whether you establish a limited company or a co-operative, for example, the national regulations dictate what obligations and responsibilities that choice bring.
You can also view available types of business as a kind of capabilities, which each have their specific pros and cons. For example, most financiers require you to have a limited company, while the administrative burdens for a sole proprietor are much less.
- Check out this summary of types of business by Finnish Patent and Registration Office: https://www.prh.fi/en/kaupparekisteri/yrityksen_perustaminen/forms_of_business.html
Regulations and field of business
Also, be sure to study how your specific field of business is regulated and whether or not you need specific permits. A restaurant business has to comply with different regulations compared to a medical profession. Specifically, certain professions or trades are regulated in Finland.
- Comprehensive list of regulated professions in Finland: https://www.oph.fi/en/services/regulated-professions-finland
Freedom-to-operate
Competitors’ intellectual property define your freedom to operate. If you have relatively little experience in your planned field of business, you might not be aware of the IP landscape of that field and market. In simple terms, you cannot use something that has been patented or in other way protected by another company (unless you negotiate a deal).
Experienced entrepreneurs and innovators, are continuously aware of their freedom to operate (FTO) in their field of business, and don’t waste resources on areas that have already been protected by their competitors.
- Google Patents is a free patent search database: https://patents.google.com/
- Espacenet is another free search services: https://worldwide.espacenet.com/
Getting a patent can also be a boost as it limits the types of technologies your competition can utilize in the future. This can then increase your ability of getting outside funding as financiers see this as a competitive advantage.
Available support services and resources can increase your likelihood of success.
Not all aspects of the business environment are limiting. In fact, most novice entrepreneurs should look outward and see what help and support and resources their environment can afford. This way an entrepreneur can save time and energy and avoid many mistakes.
- Joensuu-area has a very comprehensive and dynamic business support ecosystem relative to its size.
Business support services and support
Business advisors and incubators are a part of your business environment. They can help you to get access to local and national resources, expertise and networks. A typical business advisor working for a small business center or an incubator (or accelerator) can help you navigate the business environment and give valuable feedback regarding your business model and plans.
These people are also often times very well connected to the broader business environment so they can help you too to connect with the right people and organizations. So, it is wise to spend little time finding out what services and helps exists, as they can be a big boost in your starting up process. You should select your business advising service provider based on where your future company will be located. Here are a list of business advisor organizations in North-Karelia
- In Joensuu, Heinävesi, Ilomantsi, Juuka, Outokumpu or Polvijärvi contact Business Joensuu
- In Kitee, Rääkkylä or Tohmajärvi contact KETI
- In Kontiolahti contact Kontioloikka
- In Lieksa contact LieKe
- In Liperi contact Lipertek
- In Nurmes and Valtimo contact PIKES
External funding
Another aspect of the business environment are the different types of financiers and funding opportunities. At first glance it can feel like a complicated jungle, which is difficult to navigate. What makes it especially challenging is that some of the funding opportunities can be mutually exclusive while others are synergistic. One of the main benefits you can get from a local business advisor, is help in finding the right funding source for you.
- In the Draft Program a tool, called the Navigator, has been developed to help entrepreneurs to navigate the funding jungle.
- Most common forms of external funding the teams we have worked with have got are Rural area startup grant, Start-up grant (Starttiraha), and capital loan from Otsakorpi Foundation.
About this article
This article was written with the support of project INVEST of Karelia University of
The writing of this article was supported by the INnoVations of REgional Sustainability: European UniversiTy Alliance project. https://www.invest-alliance.eu/ . This project is funded by the Erasmus+ Program.
The content of this article represents the views of the author only and is his sole responsibility. The European Commission and the Agency do not accept any responsibility for use that may be made of the information it contains.
