Good practice:

Starttiraha income support for aspiring entrepreneurs

Craftspeople have very few channels and opportunities for funding as most funding and development, e.g. startup funding is addressed to high-ROI companies, e.g. technology. Hence, other options must be sought. Starttiraha income support grants for craftspeople and other aspiring individual entrepreneurs.

Self-employment has grown over the last decade but entrepreneurship has remained stable. The Starttiraha grants encourage new businesses and promote employment. The grant provides an entrepreneur a secure income for up to 12 months while getting the business up and running. Starttiraha provides EUR 33.78 a day for new businesses as an ‘income’. This can be especially helpful to craftspeople and others starting individual enterprises with limited resources.

Preconditions for receiving the grant include:
- being a full-time entrepreneur
- having adequate capabilities for the intended business
- having potential for continued profitable operation
- the grant is necessary for the entrepreneur's survival
- the business is only started after the grant has been awarded

Due to the coronavirus pandemic, the maximum duration of the Starttiraha income support grant has been temporarily extended from 12 months to 18 months.

The Starttiraha grant is granted by the TE Office, or municipalities that have pilot employment programs, if the enterprise is judged to be suitable, viable and likely to succeed in providing the person an adequate income.

For each individual entrepreneur, EUR 33.78 a day x 5 days per week (~700€/month) for up to 12 months, and currently extended to 18 months during the Coronavirus pandemic.

Public services from several agencies extended to assist entrepreneurs in starting their businesses.

Starttiraha income support grants back the development of new entrepreneurs and businesses as they provide a small basic income whilst developing and running a company during its first year of activity. This is especially beneficial for small companies. Customer Information System (URA) of the Employment and Economic Development Offices: 2011-2018, Starttiraha was granted to 35,516 people. Total amount of funding granted was EUR 223 million; the average funding per beneficiary was ~ EUR 6,290.

- New business ventures entail many risks
- Crafts companies have few funding opportunities
- Satisfaction with application and payment processes has grown, more harmonized practices are needed
- Need options to combine entrepreneurship and paid work and the 24% who run a business part-time

This practice requires the combined skills and resources of a number of agencies and organizations that support and cultivate individual entrepreneurs. This practice focuses on individuals rather than partnerships or LLCs, etc. It could be replicated in countries that have similar resources in the public sphere or that are able to call upon private-public partnerships to serve similar functions.

The money the individual receives is aligned with the basic income unemployment payment in Finland. Other countries may or may not have similar safety nets. The income to support the program may need to come from another source.

Because this program focuses on individuals, it can provide support for individual crafters and artisans who have few funding opportunities in Finland. The fact that the practice currently only supports full-time entrepreneurship is a limitation for craftspeople who may need to also work at a job to supplement their income.