Wanting to start a SME but you are absolutely clueless as to how it should be done? Where to start? What to do? What are the considerations? Worry not, take a deep breath, and let us guide you through this mire- we will briefly share some tips you will need to consider before starting a SME in Malaysia.
Tip 1 - Have a business plan
Why do you need a business plan?
Simply put, by putting down all your thoughts, be it realistic or unrealistic business plan and regardless of whether it is a short term or long term plan :
You will be able to visualize where your business is heading to, or where you want it to go in the foreseeable future;
You can roughly determine if your business is sustainable with your current; and
Based on the above two points, you will get an indication of what ideas need to be changed/ amended/ scrapped for you to launch your business and get your business off the a good start.
Here are some of the factors you can consider when drafting a business plan:
Does your business require you to have any special set of skills?
Where are you getting your initial fund for your business?
How much do you need to sustain yourself on a short-term/ long-term basis?
What is your business idea?
Have you done the appropriate market research?
What is your marketing strategy like?
Tip 2 - Plan your finances
It is also prudent to plan your finances even before the inception of your business. This is to ensure that your initial set up and the cost of maintaining your business is well within your means/ budget. This is because at the end of the day, like any other businesses, you would want to have a healthy cash flow at the end of each month. This is to ensure that, amongst others:
You are actually paying yourself for all the hard work and hours you poured into your business
You have cash to keep the business running; and
You have spare cash to utilize should any emergencies arise.
While not an exhaustive list, these expenses include but are not limited: to hardwares, internet service providers, maintenance, cost of hiring employees (if you need the extra manpower to assist you in the business), rental of the location/ cost of purchasing the location, renovation, managing cost, etc.
Imagine one your first month you realize with the current finances you have, your business would not make it past the next month. You would not want that to happen do you? Therefore, start planning!
Tip 3 - Come up with a good name for your business
A good name, while it is at times hard to come up, will carry your business a long way, even if you are not the one handling the bulk of its operation. Therefore, make sure your name is unique, not obnoxious, and differs from that of your competitors- a business name, especially a good one, will affect your brand name, marketing strategy and brand identity i.e. it will leave an imprint (be it good or bad) on the general market as a whole.
Tip 4 - Finding a suitable location for your business
Your business location is crucial to any business that requires a physical premise, as a bad business location could potentially kill off the business even before the business can even take off. For example, you would not want to set up a grocery store that is miles away from any civilization (you get the point).
This means you will have to scout the location where you intend to plant your premise/ branches and research on it before committing to having your premise located there. Therefore, do consider some of the points below when you are scouting for your location:
Flow of traffic
Ease of access/ finding
The convenience of facilities and available amenities
Understanding the necessary law
The laws in Malaysia make it very clear that “ignorance of the law is no excuse”. In plain terms, if you do not familiarize yourself with the relevant laws (in the context of SME) you could potentially land yourself in hot soup.
In a business context, not only do you have a multitude of laws and regulations you have to comply with before you can start your business, you will also have laws that you need to contend with whilst remaining in operation and even when you plan to cease your business.
Therefore, seek proper legal advice from the relevant parties!
Applying for business grants
As a bonus tip: do you know that the Malaysian government actually provides a certain amount of financial assistance/ grant to small businesses in Malaysia? Below are some examples of available grants:
Bioeconomy Transformation Programme by Malaysian Biotechnology Corporation;
Business Growth Funds by Malaysian Technology Development Corporation Sdn Bhd;
Cradle Investment Program Catalyst, Cradle Investment Programme 300, and Cradle Seed Ventures Fund 1 by Cradle Fund Sdn Bhd;
Creative Industry Development Fund by Suruhanjaya CommunicAsia dan Multimedia Malaysia.
The best advice is for entrepreneurs-to-be to do some research on this area. The extra grant might potentially put you in a more financially stable position when you first start off your business.