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Alkupääoma, osuudet ja lainat

Seed capital, shares and loans

When a JA company is formed, each founder invests their own money in starting the company. This is called initial capital. Seed capital is money that is available to a company and can be used to cover the start-up costs of the company. These include marketing and sourcing of raw materials.

In return for the initial capital, investors receive a share or shares in the company. In NY, the price of one share is € 10 and a maximum of 100 shares can be sold.

Where does the initial capital come from?

Each founder of a NY company invests € 10-100 in the company, meaning he can buy 1-10 shares. The maximum is 10 shares / person.
A NY company may also sell shares to third parties, but not more than 10 shares / person.
If a company makes a loss, it may lose all or part of its initial capital.
The initial capital can be a maximum of € 1,000, ie 100 shares.

What is a share?

Participation means partial ownership of a company. If the company has 10 shares, each share corresponds to a 10% share of the company.

What is the significance of a shareholders ownership of the company?

  • The profit generated by the company is distributed in proportion to the shares. If there are 10 shares and the company generates a profit of € 200, € 20 will be distributed for each share (€ 200/10 shares = € 20 / share).
  • If a company makes a loss, unit-holders may lose parts of their investment. The more you invest, the more you can also lose.

Why is one person allowed to buy a maximum of 10 shares?

The NY company is designed to help students to learn entrepreneurship and put your own idea into practice. Therefore, the risk limit in the program is limited to EUR 100 per person.

Can a NY company take out a loan?

No. The loan ban limits the potential risk of loss to initial capital.

Example 1:
The NY company sells 40 shares and receives € 400 in initial capital. It buys products and marketing materials. The transaction does not take place and the products are ruined and the loss is € 400. Thus, the loss is € 10 per share and therefore a maximum of € 100 per person if someone has bought 10 shares.

Example 2:
The NY company sells 10 shares and receives € 100 in initial capital. With the money, it buys products as a debt for € 1,000 and pays € 100 in advance.

However, the products cannot be sold and the loss will be € 1,000. This is how the loss has become 100 € / share. Of this amount, € 10 can be covered with initial capital and € 90 / share remains to be paid.

If you have 4 shares you may have to pay € 360 to set off your losses. This is a risk that should not be taken in the program. Thus, operations can only be done with the money that is already available to the company.

Note! Even real companies do not get a bank loan without collateral (for example, other company assets such as machinery or real estate).


Budgeting means estimating the future income and expenditure to the best of knowledge at a given time. Budgets can be used in many different contexts.

When a JA company is set up, the company income and expenditure are estimated and its budget is formed. In the beginning, there is more expenditure than income, but creating a budget shows the number of sales needed to make the idea profitable.

The form and execution of a budget

It is good to keep the budget form simple, and, for example, Excel can be used for creating it.

The company income and expenditure can both be divided into fixed ones and variable ones.

Fixed income/expenditure refers to income and expenditure which will remain stable regardless of sales or the magnitude of the company activities. Fixed expenditure can be, for example, an Internet domain booking fee, company t-shirts and sample products, or costs of product development.

Fixed income can be, comparably, cooperation agreements or advertisements, for instance, for which the company charges a certain sum. For example, oftentimes in an event, a partner pays an agreed sum of money regardless of the number of participants in the event.

Variable income and expenditure depend directly or nearly directly on the quantity of the manufactured products. Such expenditure may be, for example, the materials of the product, or product-related subcontracting. Variable income naturally consists of the income made from selling one product.

A budget form example


  • Variable income (sales revenue based on the pricing model of your choice)
  • Fixed income (for example. cooperation agreements, product donations, etc.)
  • Income total__________€


  • Variable expenditure (product manufacturing cost per product)
  • Fixed expenditure (costs due regardless of the situation)
  • Expenditure total__________€

Assessing business through budget

When assessing your company activities from an economic point of view, it is important to know the expectations for revenue and to be able to estimate how much the company has to make in sales in order to meet the economic goals set.

Bear in mind that depending on the business model of your company, you will have to acknowledge which numbers are the most important ones to follow in the reports.


Pricing stands for determining and setting a suitable price for a commodity offered to be bought. Pricing is one of the most important factors with respect to the company’s profitability. Below are descriptions of different pricing models.

Cost-based and market-based pricing model

If you have a product the manufacturing of which demands resources and labour, this is probably the best option for you:

Calculate the production costs, and add the sales margin to get the sales price for customers or retailers.

  • If your product is unique and there is no market price available, you will have to try and see whether the customers are willing to pay the price estimated by you.
  • If there are similar products in the market, you can compare the result with available market prices. Keep in mind that it is the customers and not you who evaluates the similar products…

In case your product is unique and expensive, it pays to make sure that clients really value it

Donate for free and make money through advertising - pricing model

Most social media applications, such as Facebook, Instagram, Twitter and Pinterest as well as mobile games use this particular model. Remember that the user is your customer and you are selling them access to the advertisers – who are your customers, too.

Subscription pricing model (formerly renting)

The subscription pricing model has been around for centuries. Most magazines and newspapers have used this model to sell their products.

In recent years, the subscription pricing model has become common in sales in the computer software, music, and TV industries. Spotify, Viaplay, CMore and Netflix, among others, are examples of this.

The idea is simple: The customers pay a repeated (usually a monthly) sum for access to a product or a service. There are different levels of subscriptions, so subscription pricing is oftentimes used along with value-based pricing. A bigger monthly fee will provide more content in return.

Subscription pricing provides the company with a fixed monthly income and a permanent clientele, thus freeing the entrepreneurs’ time from continuous sales work into product and service development.

A free product with paid products

This pricing model is commonly used in relation with free software, like the Red Hat Linux, which enables the free downloading of the product, but the customers pay subscription fees for support.

Other companies may charge for installation, maintenance, customisation, and consulting services. This pricing model is who use in fact best for service providers who use software for marketing.

Freemium pricing model

Many software companies, such as LinkedIn, Spotify, and Dropbox offer a free, limited version of their product, hoping that the users will pay a fee for additional features.

The idea behind this model is to provide only the most essential features in a free version and lure regular users into changing from the free version into a pay version and maximize company profit that way. Pricing has to work with the conceptualized increasing value of the product that is being offered.

Are you able to change the ways of 1,000 users who pay 100 € per year? Or of 10,000 users who pay 10 € per year?

Value-based model

If you can reason the value of a product very clearly to the customer, you can price your product based on its value.

In some cases the value is monetary, as in saving; perhaps you’ve got SaaS (Software as a Service) – a solution that replaces the traditional desktop program, saving the user in the areas of installation, maintenance, updates, and memory requirements.

Perhaps the value is in promoting health – maybe a new medicine will cure the disease more quickly, and with less side effects. The key to value-based pricing is to show that you offer clearly more value than other options do.

Volume pricing model (Tiered Pricing)

If the quantities bought by buyers vary, you can offer volume pricing for your product.

This is common in sales between companies (sold by one business to another / B2B sales), selling printed matter, and clothing.

Depending on the industry, a 10% discount may be given for an order of 100 pieces, and a 15% discount for ordering over 500 units. This particular pricing model is also used directly and indirectly in selling consumer products and services.

”Buy nine for the price of ten” is an example of volume pricing (but the marketing strategy is reversed).


Freebie pricing model (razor and blade model)

Freebie pricing consists of a cheap (or even free) basic component and a component that wears out and often has to be replaced.

For example, inkjet printers are inexpensive because the money is made through selling the ink cartridges to be used in them. The same applies to medical equipment that need a new, sterile part each time used.

A reminder: If you sell the basic component cheaper than its production cost, you will, of course, need a lot of capital, because it may take years before you will have made enough money to balance the invested sum.


Accounting is the act of writing down the records of the company financial transactions (accounting) and drawing up a summary (financial statement).

Each monetary action (i.e. transaction) must be written down in the accounting data. In accounting, there is a concept called an account, which is the site into which transactions are marked. The account also states the type of transaction, There are three kinds of accounts: income accounts, expenditure accounts, and financial accounts – and a suitable account is used according to the type of transaction in question.

When all the transactions of the accounting period have been marked in the accounting data, a financial statement can be given. A financial statement practically means that all the income transactions are added up, and then the expenditures are subtracted from the sum of the income transactions. After that, the property assets and the debts of the company are defined, too.

What are the different accounts?

Income accounts

The income from sales and possible cooperation agreements is documented on the income account of the company.


  • A sale of 20€ is documented on the income account at a sales event. (The same sum is also documented to have arrived to the company. More information about this later in financial accounts.)
  • A JA company is in cooperation with a company selling hair salon products. The JA company places a product advertisement on its own website and gets 50€ worth of products in return. 50€ is documented on a cooperation agreement account.
  • When all the documentation on the income account are added up, the total sales income of the company within a year is revealed.

Expenditure accounts

The expenditures of the company are documented on the expenditure account. There are expenditure accounts with different names so that it is easier to monitor the company costs by categories of expenditure (for example, material or service purchases, or the rent of the place of sale).


  • A company reserves an Internet domain and pays 20€ for it. This is documented on the service purchases account.
  • A company buys material for manufacturing products. This is documented on the materials account.

Financial accounts

Financial accounts are accounts on which the property assets (for example money on the bank account) and the debts of the company, as well as changes within, are documented.


  • A company sells its products for 20 €. After the sale, the company has 20 € to document in the accounting data.
    • A banking account or a cash account (if the sale was made in cash) works well.
  • A company buys material for manufacturing their products. Money is taken from the bank account of the company and the material is gotten in return.
  • A company sells a share of to a member of the JA company for 10 €. The company gets 10 € on their account, and in return, the company owes the price of the share to the member who bought it.
    • In the financial statement, there will be documented +10 € on the banking account and, correspondingly, a debt of 10 € on the shares account.

Profit and loss statement & balance

Profit and loss statement

The summary of incomes and expenditures is called profit and loss statement because it is the basis for calculating the return of the company (profit or loss). The model for executing a profit and loss statement is as follows:

Cooperation agreements
Income total_______€

Other costs
Expenditure total_______€

Profit / Loss: (income total – expenditure total)


The profit and loss statement contains the information about the income and the expenditure of the company, but it does not state the amount of money or property assets the company owns. For this, the company property assets (money, machinery, equipment, and other assets) are added up, and the company debts (usually the money invested by the JA entrepreneur as well as the profit from the accounting period). In accounting terms, this is called the balance.

The model for the balance is as follows:

Property assets (accounting term: assets)
Money on the bank account
Money in cash
Other company property assets
Property assets total______€

Debts and liabilities (accounting term: capital, reserves, and liabilities)
JA shares *
Profit of the accounting period **
Debts and liabilities total______€

*Shares are money invested in the company by the JA entrepreneurs. So, this is considered a JA company debt that it needs to pay back.

** The profit of the accounting period can be seen as a company ”debt” because the owners have the opportunity to decide how the profit of the accounting period will be used. Normally in JA companies the profit is divided and given to the owners. At the end of the day, it is the owners’ money that they have lent for the JA company to use.

Financial transactions

There are two ways to organize the financial transactions of a JA company, namely through a bank account and a cash account. Based on their business idea, the JA company can choose which is the best way for them to organize their financial transactions.  It is important to notice that the financial transactions of the company must be kept separate from the school’s financial transactions.

Opening a bank account or a payment account for a JA company for managing their financial transactions is worthwhile. We recommend opening a bank account with our partner bank Osuuspankki Finland (OP Financial Group), but the account can also be opened with other banks. Instructions for opening a bank account are further down in the text. An account can be opened after the first board meeting of the company has been held and a registration certificate has been received. A personal bank account can also be used as a JA company account. In that case, make an agreement on whose name the account will be opened.

When finishing the JA company activities, remember to close off the account services as well as the financial transactions services, or the bank will keep on charging you their monthly service fees.

Using a bank account for financial transactions & invoicing

Instead of cash payment, send the customer an invoice that will enter the money into the company account. Cash payments are to be used at sales fairs or situations in which sending an invoice is not possible. Using an account for managing monetary issues registers each transaction on the account statement thus making it easy to keep track of all transactions later. It is useful to print out the account statement for accounting purposes.

Invoicing software

Opening a bank account

Opening a bank account with Osuuspankki (OP Financial Group)

Junior Achievement Finland’s partner bank, Osuuspankki (OP Financial Group) offers JA companies a possibility to open a bank account with them. Included are the instructions on what a student needs to do when opening an account. A bank account can also be opened with some other bank. Instructions for that are at the end of the text.

How do I reserve an appointment with the Osuuspankki officials for opening an account, and what information do I need to have available when opening an account?

A student participating in the JA program can book an appointment in the nearest Osuuspankki office by calling the OP customer service number 0100 0500 (the cost of the call is the service network fee/mobile phone charge) on Monday through Friday at 8-16 hours. The appointment can also be booked online at, and if you are not yet an Osuuspankki customer, please choose “continue without logging in” and on the appointment reservation, fill in your personal details such as your social security number, name, address, and phone number. You can reserve the time for an appointment at your preferred OP office. Parents can accompany the student to the bank appointment. Even if you were a customer of some other bank, you can still open an account for your JA company with the OP Financial Group.

For the appointment, please take a valid ID, preferably a passport or an identity card containing a photograph, with you, if you have one. A driver’s license can be used to open an account, but to get access to online banking services, an identity card and a passport is always required.

In case you wish to open one account for several members of a JA company to use, it is recommended that all the members attend the same bank appointment with their valid ID cards so that the JA company account can be opened for all of them to use together.

Persons under the age of 15, are required permission from their parents for becoming a bank customer and opening an account, but those who are already 15 years of age represent themselves. The reason for this is that the assets are the young persons’ own earnings. But for signing an online banking services agreement, one has to be of legal age or have their parents’ agreement. When incorporating additional services, the bank advises its young customers according to each specific situation.

What does one need to be aware of after completing the Junior Achievement program?

When your time as a JA company entrepreneur is over, and you wish to make changes into the terms of your accounts or services, make another appointment with the OP banking office that you opened your account with. Reserve the appointment by the instructions given above, and agree on making changes suitable to your own needs. If you wish to continue with your company activities, going to the bank office and checking that the bank services fit the needs of your business is worthwhile at this point.

Opening a bank account with some other bank

A JA company can also open an account with some other bank. The person opening an account must be of legal age. In case the account should be used by more than just one person, each bank will provide you with information about possible account formats and their costs. Business accounts often come with monthly fees. The account may also be a personal account of one member of the company as long as there are no other financial transactions happening on that account.

When opening the company account, it is important to have the JA company registration certificate with you (you will get the certificate by logging in on this page after your registration has been accepted) as well as the record of the first company board meeting in which a decision was made to open an account and the access rights to the account were decided upon as well.

Cash account

A JA company can also have a cash account. In this case, it is important to document all financial transactions in a cash log. However, we do recommend you to open a bank account because it is not safe to have around a large sum of money in cash. 

Writing a receipt

Since the beginning of 2014, it has been mandatory for the seller to supply the buyer with a receipt whenever doing business using cash payments. The aim of this legislative change is to reduce the grey economy. When a JA company sells its products at events, fairs, sales, or anywhere, they have to give the client a receipt.

There is a cost of the negligence for a minimum of 300 euros and a maximum of 1,000 euros. When evaluating the amount of the cost of negligence, the way and frequency of the action as well as the value of the item or service that was sold without a receipt must be taken into consideration.

Payment terminal

It is practically essential for an entrepreneur today to be able to accept card payments since the use of cash money is getting more and more scarce. However, getting a traditional card payment terminal is costly and difficult for a JA entrepreneur because they often require having a business ID – which JA companies don’t have.

A device to connect into one’s cell phone is small and easy to carry around – and a perfect solution to fulfil this need. At the moment, a German company named SumUp that operates in over 30 countries already, provides payment terminals for users without a business ID. Another well-known company providing agile payment terminals is iZettle, but their services require a business ID. This may be an option if the school wishes to equip their JA companies with devices.

SumUp terms of use

The SumUpin terms of use state their age limit: ”If you are a genuine person, you have to be at least eighteen (18) years of age in order to use our services. We may ask you to prove your age at any given time.”

No fixed fees, a low commission

The SumUp Air card-reading device has a fixed price. There are no starting costs besides the price of the device. SumUp does not collect monthly service fees. Having purchased the card reader, you only pay for its use – when a debit card is charged, SumUp collects 0,95 % of the sum, and when your client’s credit card is charged, they collect 2,75 %, respectively.

Read more and order a SumUp card-reading device

There is a specific landing page to the SumUp services made available for JA companies in:


In case a JA company hires outside workers, it is considered a working contract that has to be reported to the tax administration authorities and the insurance company. We have not written specific instructions to JA companies about these matters, because they are the same as for private individuals.

Paying a salary is easiest using, for example, service that makes calculating and paying salaries easy. In case you end up using the service for paying the company salaries, one member of the company is documented as the payer, and they act as an official employer of the salary earner.

Minor salary

If, however, the paid salary is small, there are certain reliefs to the obligations to inform, and we have gathered them here. If possible, we recommend not exceeding the limit of the obligation to inform when paying salaries, because that will make it easier for the company to be active. The smallest limit in occupational pension funds is 47,08 euros/month.

Limits for different salaries:
If the salary due is under these limits, the following fees do not need to be paid:

Withholding tax
Paid salary under 1,500 euros

Social security contributions 
Paid salary under 1,500 euros

Occupational pension funds 
The worker is over the age of 18 and the sum is over 47,08 euros/month

Accident insurance
All workers have a combined total of 12 working days or less
(Attn! 3 workers * 5 days = 15 days)

Unemployment insurance 
The worker is over the age of 17 and all workers have more than 12 working days

Annual declaration 
No need to give if the salary paid to the worker was under 200 euros.

If the sums paid as salaries exceed these limits, ask your teacher for advice and study the service and the guidelines are given there.

Document to be given to the worker

A company that does housework gives the worker a document of the salaries paid. The company is free to choose the format of the document they use, but it must contain at least the following information:

  • the name, social security number, address, and phone number of the employer
  • the name, social security number, and address of the worker
  • the amount of salary paid, and the amount of the possible withholding tax deducted
  • the date of payment
  • the amount of employee pension contribution and unemployment insurance collected from the worker
  • the amount of daily subsistence allowance payment.

The document must be given to the worker even if no withholding tax was deducted or if it had been deducted of only a part of the salary. If you use the service, the document of the salaries paid can be printed automatically through the service.

Paying salary to JA company members

According to the Finnish Tax Administration, as far as taxation is concerned a JA company is not considered an employer – even if while practising employer activities, it made its founding student members payments named as salaries.

Under circumstances described above, JA companies are not required to register into the Tax Administration record of employers. While practising employer activities, a practise company is not required to pay social security contributions or other non-wage labour costs, either. A practice company is not required to deduct withholding taxes off the payments mentioned, nor is it subjected to making an annual declaration.

Payments called salary made to students cannot be seen as taxable salary, so the students themselves must report this kind of income in their personal tax return under the section of other earned income.

Product development

One of the most important questions to ask is how much will the product cost to the customers, and an equally important factor is the cost of creating the product. This question can be formed in various ways depending on the goal and the current stage of the process. Next, you will learn about the possibilities of product development for both services and material products.

Developing a material product

In case you need material, assembly, and testing in order to manufacture your product, it is necessary for you to calculate two things:

Design and innovation costs

Design and innovation costs have to do with making your product suitable for retailers and safe for consumers (check the legal issues if needed) as well as for manufacturing (design).  You should also reflect on the parts to use, where to get them, where to find subcontractors, and doing trial runs. The process in question can be an easy one – or a very complex one, depending on your product. If you wish to acquire funding outside your company, you need to be able to explain to them the feasibility of your product idea.

Production costs

There are several ways of calculating the production costs of an item, and usually, these calculations are based on evaluations of the manufacturing costs, which means adding the costs of the materials used to the cost of time in the manufacturing process. Oftentimes one can request a call for offers from the selected manufacturer either in Finland or abroad.

Nowadays mass production is automated, so requesting calls for offer will most likely give you quite an accurate estimate of the production costs.

With handmade products, you can add up the cost of materials used and the time spent manufacturing the product when the concept of time has been given a certain monetary value. By optimizing the manufacturing process and automating certain parts, it is also possible to affect the production costs. However, in some cases, an automated manufacturing process may diminish customer interest in the product (comparison of a handmade suit to a factory-made one).

Examples of product development

New tablet holder

  1. Creating a sketch on a 3D program and printing a trial version on a 3D printer. The customer can test the product, you get feedback, and you can create many development versions of the product. The finished product will look 99% similar to the version tested by the customer.
  2. Requesting a call for offers from a company to mass-produce your product (based on a 3D sketch).
  3. Getting an offer for producing 100/1,000/10,000 pieces of the product.
  4. It is easy for you to convince the investors of the feasibility of the product for a certain cost.


Life jackets for children.
The steps in the example a) + you also need to ensure and do the following:

  • Ensuring the product has been made according to all the legal rules concerning life jackets.
  • Testing the product according to the regulations with test dummies (it is not possible to test with live persons).
  • Applying for approval of the safety inspection.
  • Using approved materials and design that will definitely function properly when the user falls into the water (quality control).
  • Ensuring the use in different situations.
  • Remember also instructions for use and product warranty.

And the user has not yet had a chance to test the product at this point.

At the end of the evaluation, you have valid information as grounds to work on defining the amount of time and money needed in order to transfer the sketch into a real product before starting a manufacturing process.

Developing a service product

In case your product is purely providing a service and all the parts can be automated, it pays to evaluate the costs of creating the product and choose a possible application platform for distributing the service.

Many factors can radically change the creating costs and even cancel them completely, so both product development and pricing models of service products are very varied. Start testing a service product ”as lightly as possible” but executed in a way that gives the customer a feeling of quality service.

Examples of stages in development and testing a service

Model service for orders (development stage 1)
Establish a web page with an order form (a contact form containing the order information). The order will arrive in your e-mail inbox folder, and you can respond to it as well as send a ”thank you” e-mail with an invoice as a PDF file to each customer. After this, you can send the service ordered (for example, the retouched photos, the tickets ordered, the answer to a question, suggestions, or an analysis).

Automated order confirmation (development stage 2)
In case orders start coming in and you get tired of sending thank you emails, you can program an automatic answering service which uses the information on the order form to send a thank-you e-mail and an invoice, after which you manually execute and send out the service ordered. The customer will get the same service, but you work much more effectively.

Automated order execution (development stage 3)
You probably already guessed it – when you get tired of doing the same thing over and over again, you can plan a system that executes orders automatically. A customer can create their login information online and will automatically gain access to information, or the system will automatically send them material (sending tickets or reserving item XYZ). This means faster service for customers, and for you, even less time spent with each order and more time spent with service development and marketing.

This is only a short example of how product development works. Bear in mind that not all services (for example personal consulting or analysis) can be automated. You have to evaluate what is the best stage of automation for your product.

Just remember; the customer cannot see and does not care how much time you put into creating the service they ordered. Normally using manual labour makes the system easier (meaning more affordable) to build, but more expensive to use.



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