Make it or break it – expanding your business abroad.

 In the ‘90s when Finland was in recession, Mr. Leinonen stood before a difficult choice – to lay off many of his employees or take a risk by expanding to Estonia. More than 25 years later, the Estonian office celebrates its birthday and ever-growing local expansion. The struggle that kickstarted Leinonen’s success is still very much a principle the whole company adheres to. First and foremost, the company exists to help its clients, and in a very Finnish manner, is willing to go above and beyond for that.

Now that Leinonen has 14 offices in 12 countries we can help others who are in a similar situation wanting to move their business abroad. After all, Mr. Leinonen himself has had to do this for 12 times in different places and therefore knows all the tricks. Today the company has a reliable international network of lawyers, accountants, recruiters, insurance, banks, etc.

Leinonen first extended his business to Estonia. Today he has set his sights no closer than Mars but understands that other options should probably be considered until then. The company’s triumph started with a couple of big clients that wanted to go abroad. Neste was one of them. They wanted to go international and sent him to Latvia to open the local office there. The same clients wanted to move further to Lithuania in 1996. That was the first round of expansion.

Mr. Leinonen has said that he remembers how difficult it was to move his business to a new country. One might think that the cultural differences between Finland and Estonia aren’t worthy of notice, but that simply isn’t the case. Estonian democracy was in its infancy and people were much more cautious than they are now. Very often there were misunderstandings in business that Estonians read as aggression. This was a time that shaped Leinonen’s attitude toward taking up cultural challenges and not succumbing to them. Just because there are stereotypes and sometimes they’re true, doesn’t mean you should shy away.

MacGyver-style development

Leinonen used to be a small garage company. Today we still sometimes do things with that same attitude. We have what we call a ‘MacGyver way’. It means that we have people who honestly qualify as superhumans who go abroad and start building up the company from scratch. These superhumans are mostly young, smart, eager and educated. Thankfully Finland has many like that to offer. Still, in order for that to be sustainable, the company puts a lot of emphasis on progress and development.

On a daily basis, such issues are up to the country manager to solve. But twice a year we have a big country manager meeting in the form of a think tank, where we compare taken actions and results. The purpose is to measure the efficiency of different methods and think of how to do things better. The Finnish side is responsible for spreading information about the outcome since they are more informed and more involved with the big picture. Their goal is to work towards a more unified approach for the development of the whole company.

In order to offer a tailor-made legal services package on top of the accounting services, we need MacGyvers. To move abroad is a challenge for any individual, but it’s even more difficult for a company. No one wants to struggle with the administration for the first three months while being in a foreign country and starting from nothing.

As we all know, different countries have different ways of doing things. In general, our country branches are very independent and it works. Currently, we are moving towards a more unified approach to Business Organisation. While the work is done independently, we want the general framework and tools (e.g. software etc) to be the same everywhere.

Clients get exactly the same services in every country. Still, it’s important to note – some qualities may differ (e.g. speed of delivery, type of input needed from the clients) depending on the location. The legislation itself is already different. Every country has its own system, there is no ‘one system’. But experience with such struggles comes handy with helping our clients.

Leinonen has vast experience with foreigners and knows how to handle foreign employees, capital, transactions and management fees with mother companies, cross-border issues, etc. For us, it is easy to establish a company abroad. Leinonen will do everything that needs to be done beforehand: find a bank, make all of the international money transactions, find board members. We do the turnkey establishments and administrative tasks at the same time, so you’d have time for more value-creating tasks (that develop your business) rather than the mandatory bureaucracy.

Cultural differences can be overcome

A key to solving culturally challenging situations is communication. Leinonen has had to find that out the hard way. For example, in the beginning, Mr. Leinonen learned that all meetings with Estonians have to be double confirmed. It happened more than once that an agreed-upon meeting didn’t take place due to some misunderstanding.

In addition, there are some things that are very hard to know unless you have actually gone through them. We like to say that the curse of the accounting industry is local legislation. Payroll management is the worst in this sense. It’s always changing and different in all the countries. The difference is, we already know what questions to ask and will gladly do that for you.

In Finland, the union agreements are very powerful, they basically have the strength of the law. Not a single payroll company handles all of the labour agreements. Some even don’t take on certain clients because they don’t have the necessary expertise to handle the cases. An example: some employees have 8 min brakes, and some have 12 min brakes. In Estonia, it’s much more simple. Then again in Lithuania, there are too many reports. Doing the same work in different countries means a very different workload for us. But for our clients, it would really impede their progress.

What helps Leinonen navigate this cultural turmoil is vast experience in Scandinavia and the Eastern part of the world. These two regions have very different accounting systems, and there are unexpected differences even in the same region. For example, even the meaning of ‘auditor’. It’s common in Finland that the accountant does the annual report and then the auditor checks it. In Norway, it’s common for the auditor to do the report.

We use Finnish innovation to see the future

While it is hard to put your finger on any one cause for Finland becoming a trendsetter, Mr. Leinonen himself has linked this to Nokia. Engineers that worked there moved onto new challenges and brought their engineer-thinking with it. This hard-working brilliant mindset has driven its roots into accounting as well, which is years ahead of Eastern and Southern Europe.

In Estonia, they use a lot of PDF invoices, which is pretty much like using plain paper. Finnish companies issuing sales invoices, they do it in a structured way. Everything is universally applicable and goes through an operator, on to a receiver system and it’s all automated. Even matching the bank account and showing that it’s paid. In order to do that we need to go into the clients’ processes and suggest a better way. In Finland no-one takes a receipt on a business trip, you just take a photo of it. In Eastern Europe, you need to gather those receipts, enter into an Excel sheet and then deliver to the accountant.

This is the part where we’d like to help our clients. It’s so different in countries: Bulgaria is five years behind Estonia, Sweden year-two ahead of Estonia, but then again a year or two behind Finland. It’s not efficient to know your costs are too high but not knowing why. Which project is running on low profit, or department is not performing. It’s very difficult if everything is just a lump sum. You have or you don’t have money in your pocket, but you don’t have the slightest idea why. It’s a tremendous opportunity for us to help others because we know what the future is going to be like.

Leinonen is a company that owes its success to once successfully expanding its business abroad. This success was brought upon good strategic choices, business know-how and staying true to values like honesty, integrity, transparency and due diligence. If you think we could put our expertise into use by helping your company take a leap forward then contact us/send us an inquiry.

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