Thinking of starting a business in Malaysia? Take a peek on the market scene
Rated as the first emerging market by a recent Bloomberg survey, Malaysia is often claimed as one of the top testing ground by entrepreneurs worldwide (David Wong from Deemples). If you - just like many of other entrepreneurial minds - are thinking of opening a start-up business of your own, this article will provide you with a brief understanding on the environment and some supporting elements and key challenges of opening your very own start-up company in Malaysia.
External support might be one of the most prominent factors of the relatively high number of businesses being started in Malaysia (Ginny Truc To from Shoe Mo). Both government and private sectors encourage and harness a strong sense of entrepreneurship among individual. Noting the importance of technology-based services and products, numerous policies (from 10 year corporate tax break, MSC status to expatriates hires) are in place to ensure easier set up for companies that offers technology-based services and products. These policies are designed to overcome some of the challenges often found in starting up a new business and also to provide incentives for both local and foreign entrepreneurs to establish or expand their business in Malaysia.
Additionally, both government as well as private companies also provide numerous training and investment programs for emerging start-ups who are struggling to build and enhance their business. Programs and communities such as startupmalaysia.org, MaGIC Academy's Global Accelerator Program, LaunchPad Startups, RAVe Accelerator by MyNEF, Nexea Accelerator, Hong Leong's HLB LaunchPad as well as Digi’s Incub8 and Digi Accelerate provides start-ups with theoretical and practical skill sets, mindsets and few services from SEO formation, mentoring, human resource services, marketing services and many more. These companies are not only encouraging, but also continuously ensuring skill enhancement and continuous innovation within the start-up community.
Despite the high external support within the Malaysian environment, there are often great challenges faced by the Start-up community. One of the key challenges is the lack of sense of community among local entrepreneurs and the key players within the industry or sector. Although the community exists, the relationship between founders, investors and experts within the industry is not as strong compared to the global average (GSER 2018). Strong and close relationship between parties enables higher exposure between like-minded individuals. Therefore, a stronger sense of community and local connectedness might develop into higher interaction and exposure which might induce further innovation and common growth.
On top of that, multiple resources cite that hiring and retaining high quality talents as one of the most prominent hindrance among start-ups (Ginny Truc To from Shoe Mo). Start-ups are in even more crucial need of highly skilled talents who are able to wear multiple hats and work individually with a sense of ownership for the company. These talents are often valued highly, hence they are also higher in monetary value which might be a challenge for start-up companies with (no offense!) less stable finances. Thus, not only does the hiring process takes up much resources and efforts, obtaining and retaining a good talent for the company is rated as a facet that takes up quite a lot of expenditure percentage in both start-ups and larger corporations.
Lastly, one of the most notable challenge faced by start-ups is the limitation of the founders’ knowledge and expertise in the necessary facets of running a business. Although GSER 2018 suggested that Malaysian founders have more than adequate theoretical and practical knowledge on starting and running their own businesses, TeAM’s (Technopreneurs Association of Malaysia) Fadzli reportedly argues that the high index provided by the survey mentioned above represents the founder’s overconfidence or overestimation of their own capabilities whilst being underexposed to their peers. Similarly several other articles also press the importance of up-scaling expertise and knowledge in other facets of running and growing a start-up via mentorship, training and closer relationship among key players within the sector.
Deep knowledge of products or services might contribute to the quality, yet does not translate directly into adequate sales which is crucial to keep any company afloat (at least in the beginning stage of start-up). Outsourcing Human Resources functions and Marketing efforts to the experts might be your cost saving strategy, whilst letting you focus on what you are actually excellent in doing.