Forecasting financial needs and profitability for a clothing line in Finland

While finding a job in a company might be a tough process, establishing an own company is an attractive alternative in Finland. High quality hand-made products are valuable in Finland and the country has a favorable demographic and economic situation. The focus of this thesis was placed on establishing a small manufacturing company that produces its own clothing line. Financial management is one of the key aspects of a start up to become successful and this shaped the main purpose of the research into creating projections of the financial needs and profitability of the case company.\n \nThe sources includes the official websites of the Finnish tax authority (vero.fi) and the Finnish Patent and Registration Office. Market reports on the attitude towards entrepreneurship and other various online materials on the topic were researched and applied to answer the main research question, where two scenarios of setting up a clothing line start up were compared with respect to costs and profitability.MS Excel was selected to build financial statements as it is an affordable and easy to use tool.\n \nThe thesis is made up of four main subchapters: entrepreneurship, business idea, the SWOT analysis and the financial aspects of a start-up. Such a structure enables the author to first explain to the reader why Finland is a favorable market for the case start-up and what the different options of establishing a company are, and then to elaborate on the background of the business idea as well as to support and validate it with a competition analysis. Finally, the research is concluded with a discussion on the financial information answering the main re-search question. As an output of this thesis, costs and revenues are calculated and forecast financial statements are created. To support the analysis, breakeven points were calculated for each of the two business scenarios. Due to the high initial investment costs of the second scenario, it was found that the first scenario with a single owner and without employees is more favorable and turns into profit in three years.\n\nAll in all, the objectives of the research were met and this thesis can be used as a user guide to potential entrepreneurs interested in manufacturing clothes in Finland.