03 Dec 10 Important Steps for StartUp Business in Malaysia (Year 2020)
10 Important Steps for StartUp Business in Malaysia (Year 2020)
How do I start a new business in Malaysia?
In recent years, many people have been inspired by successful entrepreneurs such as Elon Musk (Tesla), Jack Ma (Alibaba), Mark Zuckerberg (Facebook), etc., having the goal of becoming an entrepreneur as successful as them.
Malaysia is one of the growing markets in Southeast Asia and provides a lot of business opportunities in Malaysia. In 2017, approximately 480,000 startups were registered in Malaysia. It has shown there are highly promising business opportunities in Malaysia due to the strong influence on entrepreneurship. Of these, 98.5 per cents are small and medium-sized enterprises or 36.3 per cent of GDP. Unfortunately, almost 80% of Small and Medium Enterprises (SMEs) do not survive in the first 3 years. (Source)
There are various factors that can cause a business to fail, but a new startup can survive in the early 3 years, following the guideline of – Top 10 Steps for Start Up Business in Malaysia (Year 2020) for startup preparation in Malaysia of year 2020! If you are university students in Malaysia, this article could support you to start a business with your awesome business ideas in Malaysia.
1 – Solution/Idealogy — Solve the problem statement
What is the pain points your new business idea addresses in Malaysia? You must conduct a needs analysis and market research to determine the validity of the current pain point in Malaysia. It would definitely help you to identify more business opportunities and understand the market in Malaysia. Preferably if your small business ideas resonate with your personal passion, interests, skills, resources and more. And market validation is your next step!
Starting a business in Malaysia with startup stories and being a niche is one of the advantages of penetrating the market in a shorter time. Stay on your initial benefits, and most importantly, you’re creating a positive impact for your community in Malaysia!
You may attend startup and business networking to share your small business ideas in Malaysia. Getting direct feedback from experienced startup business owners and serial entrepreneurs would speed up your process in setting your direction right!
Questions to ask yourself:
- What are sustainable positive impacts can be created in Malaysia from your small business startup?
- What are the methods to carry out market validation which obtain accurate assessments?
- Which tech businesses are within your startup ecosystems?
- What are the startups in Malaysia has the same business ideas with you?
- Why you, why now among businesses which similar to yours?
2 – Setting your vision and mission, a strategic boost-up plan from 3 to 5 years
The purpose of the vision and mission statement is to align and guide everyone, including yourself because sometimes we can make mistakes along the journey. (P/S: We always learn from mistakes)
A 3-5 year strategic boost-up plan has to be developed along with key performance indicators (KPI) to be achieved. In addition to using it for coordination purposes, you can use it as a tool to review and evaluate performance to keep your startup business in good shape.
Questions to ask yourself:
- What stage of your startup business are you at now?
- What do you want to achieve in the next 3-5 years? Breakdown on a yearly basis!
- What do you need to complete your business ideas in Malaysia?
- What is your horizontal or vertical expansion plan within Malaysia or outside Southeast Asia?
3 – Develop your Business Model, Financial Model and Marketing Plan
Mindmap your business model can be difficult to see how far you have in your startup business. You’ll have a better overview from the start of your business in Malaysia and expand horizontally or vertically, or both.
Financial modelling is a great tool to tell you how much you require and how you can leverage it in phases to ensure your startup business growth.
Chart out your marketing plan starting from nurturing your potential customers to closing them. You can refer to this video -> No 1 Product Tip presented by Vishen Lakhiani from Mindvalley, to understand your market better before deciding the direction of your marketing plan.
Now you can get a deeper understanding of your startup business ideas with a comprehensive plan while enjoying your favourite coffee drinks.
Simplify all the information of your ideas and turn it into a slide!
Questions to ask yourself:
- How many types of income are there? Is it recurrent or non-recurrent?
- Can you expand your startup business within Malaysia and regionally?
- How much do you require reasonably to grow your company?
4 – The Dream Team – Recruit your Co-founder(s) and Core Team in Malaysia
Never walk alone. Co-founders or core team members who share the startup business’s vision and mission will provide more positive momentum and motivation to each other. You should feel proud that when you start a business in Malaysia, it creates startup jobs in Malaysia which actually contributing to our national growth!
Business encompasses the areas of accounting, human resources, operations, marketing, business development, etc.
Choose the right team members to adapt to the right position and achieve sustainable glory!
Questions to ask yourself:
- What startup jobs are available?
- What personality and attitude does the person have to fulfil this role?
- What benefits and compensation for all their hard work and sacrifices?
5 – Company registration in Malaysia to start running your startup business
There are several options for establishing a legal entity in Malaysia: a sole proprietorship/partnership, Limited Liability Partnership (LLP) or Private Limited Company (Sdn Bhd). More detail comparison can be obtained HERE.
You can analyze each type of legal entity in Malaysia and to see which type of business registration is best to protect the interests of you and your team. You can start with an affordable approach, which consists of setting up a Malaysia sole proprietorship/partnership and convert to LLP or Sdn Bhd when your startup business reaches a certain size in Malaysia.
Questions to ask yourself:
- How many funds do you have at hand for setting up a new company in Malaysia? (find out the costs of configuration)
- How many shareholders/partners are involved?
- Is it protected by limited or unlimited liability?
6 – Operation with Lean Technology – Be tech-savvy
Cloud software technology can be used by startups and growing businesses to operate efficiently at the lowest fee. In addition to studying the wonderful features of cloud software, you should investigate what is the integration of particular cloud software throughout the world, using Integrated Cloud Software (ICS) will make your startup business easier and communicate internally.
Integrated Cloud Software will act as Enterprise Resource Planning (ERP) software. While it may take time to implement it, it will save a lot of money to increase startup business efficiency.
For example, you can have both project management tools and communication tools to integrate with each other for free in your startup business!
Another example is the use of Xero cloud accounting software and QuickBooks Online for your startup business in Malaysia. Can you imagine that you can access your Xero cloud accounting software and QuickBooks Online anytime, anywhere using any device? You don’t need to invest thousands of ringgit in online accounting software, which will affect your startup business cash availability. See here for more information on how cloud accounting software can help your startup business in Malaysia?
Questions to ask yourself:
- Which processes do you want to automate?
- How to increase productivity?
- Can I use Cloud Software to replace the tasks?
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7 – Engage outsource services to keep your expenses low
Outsourcing is an option for Malaysian startups that utilize cash effectively to boost their business. In the early stages, there are few areas in which outsourcing can be considered for smooth operation.
Accounting is an area that some business owners ignore. In fact, accounting is a cost centre for a startup or growing business, but it plays an important role in reflecting the performance of your business through profit and loss accounts and balance sheets.
Cloud accounting services are a forthcoming trend in Malaysia, helping companies obtain accurate and transparent financial information to make better decisions to grow their business.
Questions to ask yourself:
- Which service do you want to outsource more?
- Which area has pain points and can not solve it?
- What do you expect if you outsource?
8 – Understanding Policy Maker – Malaysia’s budget and policies by 2020
The Government of Malaysia announced its 2020 budget in October 2019. SMEs are one of the stakeholders in Malaysia and can benefit from digital transformation.
Malaysia provides a matching grant of up to RM 5,000 for companies adopting digital technology by investing in electronic markets, ERP and e-payroll software. The grant is limited to the first 100,000 SMEs in Malaysia. In other words, Malaysia promoting Malaysian business startups to transform into Cloud Technology, moving towards being fastest-growing markets in Southeast Asia.
Therefore, knowing Malaysia’s annual budget will help you develop your business roadmap and take advantage of the opportunities and tax incentives offered in Malaysia.
More importantly, a common tax rate of 17% applies to SMEs generating profits of MYR 600,000 or less. The definition of SMEs is redefined as 1) paying capital up to MYR 2.5 mil and 2) annual sales of MYR 50 mil.
Questions to ask yourself:
- What are the latest government instructions?
- What are the government policies, incentives and other criteria to be met?
9 – Get prepared to access funding
Whether you’re looking for funding or not, your business structure is critical over time.
Potential investors will be interested in a business with a strong business structure that is not limited to an impressive business idea but also looking for a management team, a comprehensive business plan, a solid financial model, a business roadmap, an exit plan and more.
Most importantly, you will be able to extract financial information in real-time through cloud accounting software such as Xero and quick manuals, which is one of the key points of choice for potential investors.
Currently, in Malaysia, in addition to venture capital, you can explore a variety of financing options. For example, Equity Crowd Funding (ECF), invoice financing, loans to Small and Medium Enterprises (SMEs), private equity, etc. each financing scheme has its own advantages and responsibilities. for your business.
Be ready to pitch to investors anytime and anywhere, as opportunities can be right in front of you!
P/S: Remember to open for a new bank account in Malaysia for receiving funds and starting your business operation. It is easy to apply in multiple office locations in Kuala Lumpur are available for you. Prepare all needed documents for the application of bank account opening!
Questions to ask yourself:
- What kind of financing is right for your business?
- What type of investor are you looking for? Monetary, business networks, etc.?
- Tell them honestly what you require to develop your business!
10 – Shine like a Star – It’s time to unleash Wow Factors to your customers!
Aiming to be the authority within your niche is one of the core competencies that can create WOW factors for your Malaysian customers. Show your strength and experience in this area to gain confidence and trust.
Do not forget to provide outstanding customer service for building long-term relationships with your customers to achieve sustainable business growth in Malaysia!
Overall, small and medium business sustainability is one of the keys to long-term advancement in building the country’s economy because SMEs are occupying for 98.5% in Malaysia. Finally, running a business in Malaysia is like doing business elsewhere. Promote your business as an authority in the chosen industry and successfully capture more users. If you pay attention to these 10 important steps in setting up your awesome ideas, you can enjoy a high level of sustained success in Malaysia.
Good luck and all the best on your new adventure trip in 2020 as an entrepreneur!