The Entrepreneur's Guide to Work Ability

An entrepreneur must be brave, willing to take risks and, above all, able to manage them. On this page, we will tell you how to prepare for the risks of losing your work ability. We will also tell you about the help available if your work ability falters.

You are the backbone of your business – are you taking care of yourself?

Entrepreneurship takes courage every day, but so does admitting that sometimes you get tired and run out of steam. It also takes courage to take care of yourself and your work ability. When you invest in yourself, you invest in the future of your business. The tips in this article will get you started.

What does the entrepreneur's work ability mean, then? Work ability refers to the entrepreneur's resources, such as good health, knowledge, and skills, which enable him or her to meet the demands of the job. In addition, work ability depends on the entrepreneurial competence, working conditions, the local community, and the business environment, among other factors.

Prevention is key

Entrepreneurs are thought to face two risks: the risk of business continuity and the risk of losing their health. Preventing both of these risks is a key factor in maintaining work ability.

Entrepreneurs are persistent and hard-working. Entrepreneurship is the driving force for many entrepreneurs, which means that work easily defines their lives and is a constant presence. While smart devices allow working around the clock, it is also important for entrepreneurs to take time for themselves. It is important to take good care of oneself, both physically and mentally. A true self-employed superhero does not work when sick but takes care of himself or herself and keeps his or her YEL insurance valid, as the entrepreneur's sickness allowance and other social security benefits are based on YEL income. In other words, when your YEL income corresponds to the realistic earnings level in your sector, your income is guaranteed even when you are ill.

What preventive actions can you take?

When it comes to prevention, it is important to set aside time regularly for yourself, to think about risk management and what will happen to your business if you fall ill, and to consider ways to manage the rush.

As an entrepreneur, it is important to know how to manage yourself. Being in a constant hurry can drive an entrepreneur into a survival mode, leaving little or no time to plan ahead. However, it is also important to look ahead and ensure that the business remains viable in the future. Remember that you can decide when you take time off. A calendar is an excellent tool for self-discipline. List your work and leisure time in your calendar. And most importantly, live according to your calendar.

A weak or uncertain situation in a company can easily affect an entrepreneur's work ability. Work ability requires that the entrepreneur has an up-to-date budget for his or her business. Consider how much you need to earn per year to pay your bills and pay yourself a salary. Even in difficult situations, having a plan reduces stress, improves your sleep at night and therefore your work ability.

One form of prevention is not to try to do everything on your own. As an entrepreneur, focus on your core competences and seek help from your networks for other matters. Every entrepreneur should have a mentor and networks for peer support. Digital tools and coworking spaces offer opportunities for networking and collaboration. Exchanging ideas will generate new perspectives and ideas.

The road to entrepreneurship is full of opportunities, but there can also be pitfalls along the way. What if there are bumps in the road? What happens to your business or your family if you fall ill or get injured?

The most important way for an entrepreneur to prepare for surprises is the statutory pension insurance for the self-employed person, or YEL insurance, which, despite its name, involves much more than just a pension! In addition, if you wish, you can take out voluntary insurance to provide additional cover for yourself and your business.

Entrepreneur's pension insurance, or YEL insurance, is statutory, i.e. mandatory. In addition to accruing a pension, it also serves as the basis of the entrepreneur's social security. It affects, among other things, the amount of sickness, parental and unemployment allowances, the amount of compensation for accidents and the amount of compensation from voluntary insurances. An entrepreneur's pension accrual and other social security benefits are calculated on the basis of his or her YEL income. YEL income is an estimate of the monetary value of the entrepreneur's work input; it should correspond to the annual salary that should be paid for the same work to another person of equal skill.

How to find out the amount of your YEL contribution

Give your own assessment of the value of your work input in the YEL insurance application. The pension insurance company will confirm your YEL income on your application. In addition to your own estimate, it will take into account your industry, the number of your working hours and your company's turnover. Your YEL income will be confirmed to correspond to the value of your work input, so that your pension and social security benefits are based on a realistic level of earnings in your sector. For example, if you fall ill, you will receive a sickness allowance based on your earnings. You can use our calculator to estimate the amount of social benefits and insurance contributions.

When there are long-term changes in your work input, it is the entrepreneur's responsibility to report them. For example, you should apply for a change in your YEL income when your clientele has become more stable and your turnover has increased since starting your business, or when you move from part-time to full-time self-employment. Remember, however, that you cannot apply for a change in YEL income retroactively.

Investing is a great way to build wealth in the long term and in retirement. It is worth remembering that investments and YEL contributions should not be compared, as the YEL contribution is not an investment but an insurance contribution. Investing does not offer the same immediate security as insurance, but it does provide a financial backstop for a rainy day. It is not worth putting all your eggs in one basket, which is why it is also a good idea to diversify your investments. If you invest in fixed assets, such as a home or property, it can be slow and difficult to cash in your investments, for example in the event of a serious illness.

Entrepreneur's voluntary insurance policies provide you with additional cover for the most likely risks. Your business insurance should be tailored to the level of risk in your industry. Explore your options with a business insurance expert! Remember that your YEL income will also affect the amount of compensation you receive from other insurance policies.

Useful voluntary insurance policies include:

  • Liability insurance, which covers the specific risks of your industry
  • Legal expenses insurance
  • Accident insurance for entrepreneurs, covering both work and leisure
  • Medical expenses insurance
A true self-employed superhero does not work when sick but takes care of himself or herself and keeps his or her YEL insurance valid, as the entrepreneur's sickness allowance and other social security benefits are based on YEL income.

Faltering work ability

Sometimes, the entrepreneur's work ability falters, making it impossible to continue business as usual. Remember that even in a difficult situation, you are not alone! As your pension insurance company, Varma understands the changing daily life of an entrepreneur and supports you in many ways to keep your business going.

Back to entrepreneurship from sick leave

If you are on sick leave and would like to return to entrepreneurship, vocational rehabilitation allows you to return to work after sick leave at a reduced rate. You should not delay applying for it until you are no longer able to work. The earlier you start, the better your chances of rehabilitation back to entrepreneurship.

During the rehabilitation period, the pension insurance company will take out accident insurance for you and pay you an income for typically six months. Even if your business makes a profit during this period, you are still entitled to the income. The arrangement reduces the pressure to make a profit, and you can take your time to get on with your business. Please note that the rehabilitation allowance is determined by your YEL income!

At this stage, you may find that you are unable to continue your business as it is. In a work trial supported by Varma, working hours and tasks can be reduced to help you regain your work ability and prevent prolonged sick leave.

Your business can also be developed. Varma can arrange entrepreneurial training for you from its rehabilitation partners. They can help you assess how you can develop your business in a way that will enable you to continue as an entrepreneur despite your illness.

After the work trial, your business development can continue through work coaching, which often includes some training. In this way, you can strengthen your skills and your business at the same time. Entrepreneurs can also receive a business subsidy.

Read more about vocational rehabilitation

Partial disability pension for entrepreneurs

An entrepreneur can also run his or her business alongside a partial disability pension. You can get a partial disability pension if you are able to work part-time despite your illness. You do not have to earn a living while receiving a partial disability pension, which means that you can receive a pension even if you are not working.

Read more about partial disability pension

When entrepreneurship is no longer an option

In today's work culture, it is normal for people to move from being employees to entrepreneurs and from entrepreneurs back to employees. For example, prolonged or recurrent illness can force people to change industries and quit entrepreneurship. If an entrepreneur is unable to continue his or her business, he or she may be eligible for support from a pension insurance company.

An entrepreneur can apply for vocational training, in which case the pension insurance company will pay an income based on YEL income for the duration of the training. The purpose of vocational rehabilitation is to help the employee or entrepreneur to continue working. Vocational rehabilitation can also enable you to transition to other work that is more suitable for your health if your own work is not possible because of your illness.

Read more about disability pension

Remember these three things

  1. Take care of yourself and your work ability. If an entrepreneur's health is compromised, so is his or her business. That is why looking after your own work ability is so important.
  2. Your pension and other social security benefits are calculated according to your YEL income. For example, if you fall ill, you will receive a sickness allowance based on your earnings.
  3. If your work ability falters, you are not alone. Varma will support you in a variety of ways to keep your business going.

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