So how do you start a business in Malaysia? 🤔

Turns out it is super easy to start a business in Malaysia and we will guide you by the hand on how to do that.

Whether you’re starting a web design firm, an IT solutions provider for businesses like Kairos or even just a mamak shop, every business no matter how small or big has to go through this ten-step process to fulfill the government’s requirements as well get it up and running on a good foundation as quickly as possible.

This guide acts as a stepping stone to guide you as you delve deeper into starting your own business or if you have already have a business and you just want to make sure you’ve followed all the steps and procedures.

Let’s jump right in.

 

 

How to Start a Business in Malaysia: 10 Steps

 

Step 1: Craft your Business Plan. 📄

So what is the first step? Do you just decide on what to product or service to sell and start right away? Nope. Every successful business needs to have a well-structured business plan.

In your business plan, do the following:

  1. Evaluate and study the market for your product or service.
  2. How is your product or service providing “value” for the customer?
  3. Who are your competitors? Find out what they are doing as well as how they are doing it.
  4. Who will be your customers? Where are they located? What do they want or need?
  5. How are you going to price your product/service?
  6. How much principal money do you need?
  7. How much do you need to set aside to support your own lifestyle?
  8. How long can you give yourself in this business venture? Patience is key for any business.

 

Step 2: Choose the Right Business Entity. ♟️

Ask yourself this,

Is your new business a Private Limited Company (which is your usual Sdn Bhd) or a Sole Proprietorship (if you’re working alone) or a Partnership (where the ownership is shared between two, three or more co-founders)?

Which one is really better suited for you?

If you’re having trouble understanding what these type of business types mean, simply go through this wonderful guide on Understanding the Business Entities in Malaysia (Private Limited Company, Sdn. Bhd., Sole Proprietorship, Partnership, etc)

Check out what are the costs and benefits of having a different type of business entity and decide what is best for you.

 

Step 3: Prepare Business Budget & Projection. 📈

Although this is part of the business plan, we suggest using a separate spreadsheet to come up with at least 3 years budget & projection for all possible business inflows & outflows as well as personal needs and commitments.

We here at Kairos, mainly use Google Sheets as our primary spreadsheet tool since it allows for collaboration and allows everybody to work together. A great resource for understanding How to Use Google Sheets is the site called Sheetaki.com.

Target achievable goals in the budget & work along with the budget, make sure nothing goes out of hand, and always fine tune your budget according to the business progress.

By doing this, you can keep track of money flow within your business and also help you prevent any superfluous spendings.
Always start small to be on the safe side. By keeping your startup costs as low as possible is the fundamental key to succeed in your small business.

 

Step 4: Choose a Perfect Name for Your Business. 🏷️

Choosing a business name is one of the crucial parts of starting up a business. It is also one of the most tougher decisions you will need to make. Why? Because your business name is your brand, and brands are built on names. Imagine having a bad business name and then regretting it. So, spend some time to come up with a name that is short and catchy.

Your company’s name is a great unique way of associating the type of business with your target customers. Since it is also the entry point to your business, a good business name will help distinguish your business and your competitors instantly.

If you have shortlisted some names, run a name check by submitting a form with SSM with to make sure it is not already taken. It will cost RM30 for each name you apply.

 

Step 5: Choose a Business Office/Shop. 📍

Nowadays, it is common to start a small business by working from home. But, if setting up a workplace is fundamental to your business, then do some precise planning and scouting on strategic locations. The following are to be considered:

  1. How big is the space? How much space is really sufficient to get your business up and running?
  2. Is the location popular or is it located in a rural area?
  3. Is the office/shop located in a building that is premium? Is it a shop office or Soho?
  4. Are the rental rates within your budget?

Other factors you may want to consider as well:

  1. Are public transports like LRT, MRT, BRT or KTM easily available?
  2. Does the location have enough parking lots?
  3. Are there any amenities nearby? (restaurants, food stalls, convenience stores, etc)
  4. How is security like around the place?
  5. Enough space for future expansion?
  6. Does the place make it easy to attract and accommodate more staff in the future?
  7. How far is the place from your own house?
  8. How easy can the place be located? (you do not want a place hidden in a ladang somewhere)

 

Step 6: Finance Your Business. 💰

If you don’t have a family that is rich enough to support you to start a business easier, you will need to seek all available sources to get ready the necessary capital for your new business.

The following are usually considered when planning in starting a business:

  1. Personal savings
  2. Debt financing of existing personal assets
  3. Grants from government
  4. Borrowings from friends and family
  5. Angel investors
  6. Venture capitalists

 

Step 7: Get Your Business Licenses from Local Authorities or Governments. 🏢

Get a list of federal, state and local licenses and permits needed to run your business. Registering your business does not mean you can start right away. Usually, you need to request for trading & signboard licenses whenever you are running a shop, whether the shop is located at the conventional commercial building or within a shopping mall.

Steps to follow when registering a business in Malaysia:

  1. Prepare the incorporation documents
    • Memorandum and Article of Association / Constitution
    • Statutory Declaration By A Director Or Promoter Before Appointment
    • Declaration of Compliance
    • Company name approval letter from SSM (one copy).
    • Identity card of every director and company secretary (one copy each).
  2. Incorporate your company
    Within 3 months from name approval by SSM, you need to submit the Incorporation Documents to SSM. If you fail to do so you will need to apply for a new name search.
  3. Pay registration fees
    The Company registration fee is RM1,000.
  4. Issuance of a Certificate of Registration
    You will receive a new business Registration Certificate within one hour from the payment transaction of the registration fee is made.

 

Find all that too stressful? Fear not! We have written a complete step-by-step guide on how to register your business or company in Malaysia with SSM.

 

How to Register a Business in Malaysia with SSM

 

 

Step 8: Know Your Responsibilities as an Employer. 👨‍💼👩‍💼

This is an important step. Hiring employees is not as easy as you might think, we strongly suggest that you buy a concise handbook for employers in any Book Store. These books will normally state full details and all the tips and tricks on how to carry out your duties as an employer.

 

Step 9: Registering A Domain Name & Create A Website. 💻

As a small newbie in the business world, it is crucial to own a website. This will help you widen your business reach by giving your customers and potential customers details about your business and what products or services you are selling and offering.

A website that represents your business will be able to assist your customers 24/7, days and nights, no matter where they are as a website can be accessed from anywhere and anytime in the world provided the customers are connected to the internet.
Having a website for your business can help you interact with your customers via the website itself. This can be made possible by having a contact form at the Contact Us page or having an FAQ section to answer the frequently asked questions from your customers or even better by having an automated chat bot that replies customers instantly.
The key to a successful business is to provide something that attracts customers or enhanced value to your customers, you may consider the following:

  1. A good & short domain that is easy to remember
  2. Well designed & structured layout of the website pages
  3. Good website hosting provider
  4. Search engine optimization (SEO) practices
  5. Users’ expectation when browsing your website (user experience)
  6. Good security measures
  7. Helpful information and contents

 

Step 10: Start Promoting and Selling. 🚀

We’re almost done, finally, you need to spread the word to all your friends, relatives, ex-colleagues, ex-girlfriends/boyfriends (why not?) about your new business venture and let them know that you are selling or offering certain products or services now!

Find a way to identify out what is the best method to do so. In addition to that, you can use advertising services such as Facebook ads, Google or even Yahoo! and etc. Moreover, you can offer giveaways, contests and sales to attract more customers to your website.

Take your time and carefully carry out the steps stated above, because you want to start your business on the right path!

 

Share this guide with others who might benefit from learning to start a business in Malaysia.