Launching a business is no easy task. It needs genuine interest and deep commitment. Many start on it with little to no know-how. So, here’s a step-by-step process of launching a business in Malaysia.
Ideate then reevaluate your idea
Before launching a business you first need a business to launch. To come up with ideas you need to get creative.
First, identify a problem experienced by a target crowd that needs a solution. Then, formulate a solution and turn it into a product.
Next, question yourself. Is there a market/demand for this? Will it become obsolete? Is there a better solution to this problem? Is this good enough to launch a business?
Turn your ideas into a plan
Then, turn your reevaluated idea into a solid plan. A solid plan will take it from a mere idea to a solid product/service. After all, you need a proper product to realize launching a business.
You must have a plan complete with tasks, goals/targets and a timeline. Answer these questions. What do you want to achieve? By when do you want to achieve these goals? How do you want to achieve these goals?
Include in your plan how you can hit your targets and achieve maximum returns. These targets/goals are a good benchmark to evaluate your business performance.
You need to have a complete business plan if you plan to ask for a loan, grant or investments for your business launching.
“You have to spend money to make money”. There is so much truth to that phrase in entrepreneurship. Understand that you first need to flow money into your investment to get returns. You need a solid financial plan. This ensures you don’t bleed capital and keep tight tabs of money flow while launching a business.
First, map out a proper budget and make business projections. Sum up launching and operational cost of the first 12 months. This will make up your initial investment. Have a rough estimate and include contingencies.
Launching costs will include costs for business/company registration, licenses and permits, equipment, insurance, inventory, trademarking, property leases and many more. Your operational costs would include utilities, salaries, supplies, rent, and others.
Know how you’ll attain capital. Will it be self-financed? If you don’t have personal capital, there are other options. Get a business loan or line or credit, ask for a business grant or look for investors. Luckily, Malaysia is a place with abundant opportunity for entrepreneurs.
Government agencies and banks have many funds ready for young/new entrepreneurs. These were made to help them start a business. There are government funds like the Young Entrepreneur Fund (YEF). Besides that, are the Soft Loan for SMEs (SLSME) by Malaysian Industrial Development Finance Berhad (MIDF) and the New Entrepreneur Fund (NEF) by Maybank. There are many other funds to apply for.
Just make sure you have enough financing to see your business plans through for the first year.
Choose your business type/entity
You need to know what type of business you want to launch. In Malaysia, there are three business type entities to register as. These are Private Limited (Sdn Bhd.), Sole Proprietorship or Conventional Partnership. Do your research and read up about the differences.
If you’re solely starting a business, opt for Sole Proprietorship and Conventional Partnership. This is the common choice for small to medium enterprise businesses (SMEs). Sole Proprietorship is as the name implies, owned by one person. Partnerships can have 2 owners and as many as 20 partners.
If you plan to establish a company you’d need to register as Private Limited (Sdn Bhd.). This entails higher fees and more legalities.
The differences between businesses (Sole Proprietorship or Conventional Partnership) and Private Limited (Sdn Bhd.) companies are the legalities and a few other aspects like the tax rate.
Businesses have unlimited liability and no separate legal existence apart from the proprietor. All contracts are signed in the name of the proprietor. Also, It may be harder to get business loans with a sole proprietorship or partnership business.
The latter is independent of the owners. It is a company limited by shares and has its own legal rights. These rights include the ability to buy or sell a property, to sign contracts with its common seal and to sue or be sued in its own name. This type of business also gets charged lower and better tax rates. With limited liability, your personal wealth is protected.
However, if your SME business does grow quite quickly, you can always upgrade it to a Private Limited company later on. There are actually more benefits to owning a Private Limited company.
Open a bank account & set up your accounting system
You need to open a company bank account for your business. All banks give the option to open a company bank account. This ensures you don’t mix personal finances with those of your business. Best to keep business and personal finances separate. You’ll be able to keep proper tabs on your business’s cash inflow and outflow.
Then, set up an accounting system that suits you best. You need it to create and manage your budget, set prices, document cash flow, and file taxes. You can either opt to do it yourself or hire an accountant.
Choose & Register your business name
The business name is the company identity. It’s one of the most integral parts of a business. There are several guidelines to consider when choosing a name as per Companies Commission of Malaysia (SSM). This is the statutory body that regulates companies and businesses in Malaysia.
Explore your options and think of the possible implications the name could entail. Choose one that hasn’t been used or trademark. Also, choose one with an available internet domain name.
So, with a name or a few in mind, go register your company at any SSM branch or online through SSM e-Lodgement. You can look up the website for branch locations. SSM provides a detailed guideline for new business registration on its website. Read it if you need some insight into this process.
Bring along a copy of Identification card(s) (NRIC), suggested business name(s) and completed forms. The forms to fill are the Form PNA.42 (if you’re not using your own name) and Form A. They are available on the SSM website. A Private Limited company will have more forms to fill due to its more complicated legalities.
Upon successful registration, a Business Registration Certificate will be issued within an hour. Proper registration is integral as businesses without valid registration can be fined up to RM50,000 or face a maximum of two years of imprisonment.
If you’re a university student, register under the 1Student 1Business Registration Scheme. You’ll get a fee waiver. This is in lieu of the government’s initiative to proliferate young entrepreneurs.
Registration fees for sole propriertorship and partnership businesses are as below.
Acquire license & permits
If it’s a brick and mortar business, you’ll need a business premise and signboard license from your state authorities. Certain businesses are entailed to have special licenses, for example, the wholesale and retail trade license. A food business would need a food handler’s license and halal certificate (if halal).
Read up about licenses and permits to know the differences between the two. Also, do research on licensing requirements to know what you need for your business. You have to have all required licenses and permits before launching a business.
Be prepared for a rainy day. It’s always good in a risky business to be insured and protected. So, make sure you get insured before launching a business. Insuring your business will protect your business property and finances or income. You’ll be protected from business disruptions and public liability.
These disruptions include fires, burglaries or natural disasters. Some insurance companies even offer illness protection for you and your employees.
A good insurance company also provides business advice. They can help you figure out how to minimize obstacles. And, they tell you how to protect your business from unforeseen circumstances.
In Malaysia, there are a few companies that offer business protection insurance. Companies like AXA, Prudential, Pacific Prime and AIA all have special insurance packages for this.
Build a motivated and qualified team
To help in launching a business, you probably need manpower. Hiring the right employees is integral to your business’s success. First, outline all the positions open and their respective responsibilities. Then, make a guideline for what you seek or require in an employee. Use this guideline to shortlist and consider applicants.
If you’re a one-man show, you’d still need a support team. Have someone you can go to for advice, motivation, and reassurance. This helps you not burn out when things get rough.
Find a location
If your business is going to be a brick and mortar business, now’s the time to find a location. Choose one based on your style of operation, demographics, foot traffic (if you need it), competition. Proximity to other businesses and services may be required to aid your business operations. Building infrastructure, as well as rent, utilities, and other costs, matter too.
Even if you don’t need a storefront, you need a location to work out of. The operations center. You’d only need to consider a few things like comfort, proximity to other businesses and others.
Before launching a business, market it!
The process of launching a business is almost complete. Next, start marketing your business. As a new business its important to start attracting clients and customers. They’re essential to your business growth.
Be creative and explore various marketing ideas to put your business out there. You don’t need to hire an expensive marketing team. Working with what you have and can afford, could be as effective.
After all this, you should have your successful business launching. Understand success doesn’t happen overnight. You need strategy and thorough planning. Be consistent in updating and bettering your business to increase chances of success. Always listen to customer feedback and work with that.
Lastly, fully embrace the journey of learning on the go. Entrepreneurship’s biggest lessons come as you go on. Good luck in launching your business!
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