Service business update 6
From March 2024:
So, how has the year gone? From ups to downs.
January 2024 - Surprisingly good, everybody is buzzing. “Bottom is in”.
February - April - Misery. Slowest ever. It felt like COVID times due to the strikes in Finland. On the other hand, Lapland broke all records while Helsinki was in depression mode.
May 2024 - Surprisingly good, everybody is buzzing. “Bottom is in”.
June looks promising, with huge events in Helsinki. Metallica is doing two concerts, which is very good for the service industry.
Helsinki is closed from midsummer to early August. Very low tourist numbers in Finland?
Not much happens during the summer. The middle class is so strained that most weddings are organized at home. The upper class is still partying like crazy, but, unfortunately, we have so little wealth in Finland…
Enter autumn.
Make higher revenue and cut costs! The biggest companies in Finland listed at +100 are struggling, but the bottom was in—stocks have recovered!
How about the rest of the +500k companies? Struggling. I looked at some annual reports, and they do not look good. I incurred a loss in 2023, and most of my customers broke even or faced losses.
Just raise prices! It is very hard for small businesses to raise prices and transfer costs to end users.
Need to innovate: Shittier service, shittier products, shittier quality… Sorry, I also have to do this. There is no other option.
This will not be enough.
Cost-cutting has not yet started. Do you know how small businesses cut costs? They lay off employees. We want to avoid this until it's the last resort. Before COVID, I had 14 people… Now I'm down to 3; it’s game over then.
Well, I am a bit uniquely positioned, perhaps a little bit of my background:
When I started and ran the business in 2014-2015, I had one clear goal: to exit in 5-7 years.
I worked at least 12 hours daily, had zero holidays, and had no family time, but my reward was just around the corner! I remember looking at my January 2020 results (record sales) and thinking I would go to that marble-floored bank in a few months, call it quits, and receive my reward….
When one door closes, another opens. I've become a 10x better man and father, which is priceless. Now, I work to maintain this balance without incentive to push further. Even when things go wrong, a new opportunity arises.
Or can I find another angle to this, or should I do it purely to annoy? I refuse to endure another 4-5 years of hell to grow this further; my resilience is waning.
I am not your average businessman; I am well above that. In the end, I am my biggest enemy. (Major humbling event incoming.)
The rug pull
✅ The purchasing power of consumers is down -20 years, and it will continue to erode. The VAT tax will increase from 24% to 25.5% in Autumn, hurting even more. The sentiment is, “Who cares? It’s just a few euros on top of everything.” “It’s what the government has to do now; it will go to a good purpose.”
Yeah, 99% of Fins have no clue what is happening, no idea how businesses are run, and, sadly, no understanding of economics.
✅ Autumn is going to be full of clashes between employers and unions. Yeah, salaries have not risen here. Sometimes, I think, but then I forget.
✅ Our media is overblown with Ukraine-Russia fearmongering 24/7; look at other news outlets around the world. Here in Finland, it is on the front page 24/7. Consumer confidence is at an all-time low, and companies are not investing…
✅ For over a year, the middle class and the talking heads here have been praying, hoping, and crying that the mighty rates will go down… (Spoiler: It always ends in tears.)
✅ Slowly realizing that the value of their “real assets,” such as houses, is plummeting hard and will continue to do so if there is zero growth.
✅ The stock market is just gambling. When the future outlook is bleak, we humans gamble. Not many people own stocks in Finland, but the paper wealth effect plays a huge part, especially in the service sector.
✅ The Euro election delivered a huge surprise, with the Left alliance becoming the second biggest party, leading to increased instability and unexpected results across Europe. Here in Finland, we don’t even have a “right”; just left. Still, all they can do is argue about where to spend taxpayer money.
What is the bullish case? For Finland, it is zero growth with more debt.
Yeah, it feels sick to hope for a recession, but that would be the best medicine for Finland. Let’s celebrate workers, entrepreneurs, people, free market solutions, and individual liberty.
The dystopia is more government, zero growth, and no creative destruction.
