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Entrepreneurs taking a double hit from high electricity prices

Many small business owners are struggling to make ends meet as higher costs for electricity impact both their homes and work.

The Ministry of Employment and the Economy has invited representatives from the Central Federation of Finnish Enterprises to discussions about the need for subsidies to help deal with the high costs of electricity.

Many homeowners were shocked by the size of their November electricity bills, and many entrepreneurs who have to pay for utilities for their businesses were doubly so.

Small business are now are looking to the government for help in coping with drastically inflated electricity bills. According to a recent survey of entrepreneurs, more than 10,000 companies are in dire need of public energy support.

Talks on the issue between the ministry, the enterprise federation and other stakeholders are scheduled to take place at the beginning of this month.

The South Savo regional director of the Central Federation of Finnish Enterprises, Heidi Loukiainen, points out that, for example, entrepreneurs registered as sole traders are in a difficult situation, as they are personally responsible for the costs of business operations.

According to the federation, 93 percent of companies in Finland are micro enterprises employing less than 10 people.

“The electricity bills for their households have become unreasonable, and the electricity bills for their businesses are unreasonable. If no support can be arranged, then this situation means that many small entrepreneurs will be facing hard times,” Loukiainen said.

Payment flexibility would help

The small business group is also calling on energy utilities to provide more flexibility in payment terms so that companies have time to receive government support before bills fall due.

According to Loukiainen, splitting the payments into several installments could also ease the situation, even if it would not eliminate the entire problem.

“Admittedly, it is a sort of artificial respiration, but it could help get through the roughest time. It also gives hope to companies that they can keep operations running and know that there won’t be a bill of tens of thousands of euros all at once,” she said.

There are serious worries now that many smaller, but otherwise healthy businesses will run into insurmountable difficulties due to high electricity bills, and have to either suspend or close down operations completely.

There have already been cases reported of companies that have suspended operations and furloughed their employees for the winter months, as well as some that have closed down due to the electricity crisis.

Jari-Pekka Koponen, who chairs the small business federation in Central Finland, said the rise in electricity costs already started more than a year ago. Big electricity bills in November 2022 really opened the eyes of both consumers and entrepreneurs to the problem.

“The matter is a serious one, and now people have woken up to it. The situation affects many companies in the same way as it does consumers. At this point, we are in the same boat, so to speak,” Koponen said.

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