Business in tourist sector on Iceland? That must be a business success story on Iceland! If it really is, we'll find out from conversation with 23-year-old entrepreneur from Poland, an owner of a car rental company on Iceland.
Please tell me, how long you’re on Iceland?
I came to Iceland in April last year, so it’s been 1,5 years now.
Living in Iceland is one thing and business other. Where from did you get the idea to open a company here?
I came here to Iceland to work and while working in a regular job I’ve been observing the life here. And I noticed a big potential in the tourism sector when the number of tourists is increasing every year and whole tourist sector is rising by 20-30% annually. Therefore, I found this potential in tourist sector and at the same time I met a guy who talked me into this idea. It was an Icelander who opened now one of the biggest car rental companies. He opened it in 2012, so it has 5 years now and it’s really well prospering. He was the founder and later he sold it to his family.
If he opened same business few years ago and now helped you open similar one, so here is no problem with competition?
No, to be honest no. Here the demand for cars is so big that… the number of tourists is rising constantly so so far we don’t have the problem with competition. Conversely, they say that whatever car you have you’ll rent it.
Wow, great. So it was a bull’s eye with cars here? Pure success!
Yes, I’m satisfied.
So when did you open the company?
I opened it in November 2016 but we started running it… at the end of March, no April this year.
Why is that?
Because of the long bureaucracy processes that I had to go through to get the licence. Cause to run a car rental company you need to have a licence. And it was a really long process, complicated and caused lots of problems.
But the process was complicated and long because that’s how it is or because you’re a foreigner? Or because you didn’t understand something in the first place?
Emm… besides the fact that I’m a foreigner here, major problem was with my lack of history here. For instance, that I don’t have any hinterland, credit history, estates or anything alike. Also very often I heard that I’m very young.
So, big uncertainty.
Yes, it was big uncertainty till the end.
But I guess it’s connected with their recent crisis?
Yes, they are very cautious now. Who they give the licences, who they insure. They check how it’s going to work, etc. Also they are much more cautious than they were 5 years ago when my friend was opening his company. He himself was surprised how much did it change throughout these years – insurance cost is much higher, bigger requirements and bigger accuracy in checking things.
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I also had a big problem to get insurance for my company. They were sending me denial after denial. I was changing things, correcting them and again denial, always denial.
What did you do to finally get the insurance?
To finally get the insurance I had to acquire… ask my friend, a lawyer to enter my partnership for a while just to boost my credentials to get all those required permits, licences and also insurance.
So he entered your partnership to make it more trustworthy?
Yes, yes, without it I wouldn’t do much I guess with opening a company here.
And there wasn’t any problem with him getting out of the partnership afterwards?
No.
There was also a check-up of my history, but not credit history but rather of prospect success of the company. They want to know how it’s going to work. And there’s this scale, so I had everything in red – which meant that in 80% my company will go bankrupt. And based on that they made other decisions.
It’s interesting. What are they taking into account to give such a score?
Your age, lack of experience, estates.
They strongly discouraged me from opening this company, in the insurance company, everywhere. Everybody said that times have changed, that’s it’s more difficult, that the insurance is really high – because it is high, it’s really high, but I made it.
And does the insurance come in handy? You’ve got a lot of damaged or broken cars?
Oh yes, at least one every month is devastated. I lost one last month totally. It fell off the road and overturned.
How you’re doing it, you know Icelandic or you’ve got a lawyer or a bookkeeper who help you out with running the company?
I’ve got a law firm, which is helping me with all the paper work, and things bigger than I can handle myself. I also have an accounting firm which looks after everything from payments to document acquisition, contacts with customs and taxes. They handle it all. But I myself am trying as well to participate. Of course Icelandic language is a barrier but I learned a bit so far so I can fix basics myself.
So it’s doable to run a company without the knowledge of Icelandic?
Yes it is but it’s always better to have this knowledge.
You said payments. You’ve got any workers?
Eee, I’m talking about payments for the board of directors. I don’t have workers so far.
OK, board of directors, cause it’s a limited liability company?
Yes, the Icelandic equivalent of it - ehf.
Why you’ve chosen this type of a company?
Mainly because I acquired those partners of my company and we all decided that it’ll be the easiest way to run this business together. Also because I don’t know the language. They also have some things that they put into the company so it’s kind of symbiosis.
But you’re the chairman?
Yes, exactly.
So there’s no problem with you being a foreigner to be the chairman.
No.
Great.
Actually, that was the easiest.
And how you’re promoting yourself? Competition is big, and even though there is plenty of tourists but you need to present yourself to them somehow.
I’ll put it this way, because I started not that long ago (around 5 months ago) so far I’m trying to check every possible way of marketing. At present I’m concentrated mainly on a cooperation with local partners, who acquire bookings for me. It’s the best solution so far. Next year I want to concentrate more on my own marketing with campaign and whole plan to promote this company because that’s my main concern – to make it visible on Icelandic market and make it big.
I tried cooperation with marketing companies here on Iceland but their efficiency is not pulled to the extent it is for example in Poland, where marketing is on a big level because of big competition and… you need to work hard to get through. Here they’ve got this rule, if something is working then you don’t need to develop it. It’s Icelandic character I guess. You don’t expect great results unless everything is working OK, no one is looking for other ways of doing things.
What about Icelanders themselves? You’ve got a lawyer, an accountant. How do you evaluate contact with them and their workmanship?
They are really open, in terms of personal relations. Open, friendly and helpful. They don’t treat me differently because I’m a foreigner, not looking down on me or something. In general, they’ve got this internal peace which is sometimes really irritating as I want things to be done quickly, now. Just like I used to work in Poland. I come from a big city Poznan where’s always a pressure of time and constant work and rush. And here very often I get a reply from them that it’ll be done in due time. So there are sometimes conflicts on this line – I want to make something now, and they’ve got their own time, so I need to ask several times.
But it results from their inner peace or sluggishness, laziness or forgetfulness?
No, it’s their inner calmness and culture here.
Especially, because my partners come from small village where life goes on even much slower than in Reykjavik, so they’ve got time for everything.
So overall you’re satisfied with running the company here?
Yes, totally.
What progress has been made during those 5 months? Cause you’ve started with 2 cars, right?
Yes, I started with 2 cars and after those 5 months I’ve got 18 cars and I’m in the middle of acquiring new cars. Next year I’d like to double this number at least or reach 50 cars. And in 3 years to have around 100 of them.
By knowing that this sector is constantly growing, this business is almost certain?
If there won’t be any crisis, cause as I mentioned, every few years there’s some kind of crisis, bigger or smaller but there is. At this time there’s a small downturn in tourism, but slight.
You finance your cars with your own means or…
Yes, I use my own means.
You don’t take mortgages?
No, I think that due to this history of the crisis that was here few years ago I’m afraid to get mortgage especially when I have my own means. Also using my own money, I can balance and manipulate more with the sale and prices because I’m not bonded to pay certain leasing or mortgage amount every month.
A reasonable approach. I may only wish you further success!
Thank you and likewise.