““BEGINNING BEGINNING CONSIDERATIONS”CONSIDERATIONS”

BUSINESS PLAN:BUSINESS PLAN:

Strategic management Strategic management processprocess Step 1 Develop a clear vision and translate

it into a meaningful mission statement. A clearly defined vision helps a company in A clearly defined vision helps a company in

three ways: direction, decision, peoplethree ways: direction, decision, people The The mission statement addresses another mission statement addresses another

basic question of any basic question of any business venture: “What business venture: “What business are we in?”business are we in?”

Step 2 Assess the company’s strengths and weaknesses. Strengths are positive internal factors that a Strengths are positive internal factors that a

company can draw on to accomplish company can draw on to accomplish its its mission, goals, and objectives.mission, goals, and objectives.

Weaknesses are negative internal factors Weaknesses are negative internal factors that inhibit a company’s that inhibit a company’s ability to accomplish ability to accomplish its mission, goals, and objectivesits mission, goals, and objectives

Strategic management Strategic management processprocess Step 3 Scan the environment for significant

opportunities and threats facing the business. Opportunities are positive external options Opportunities are positive external options

that a firm can exploit to accomplish its that a firm can exploit to accomplish its mission, goals, and objectives.mission, goals, and objectives.

Negative external forces that inhibit a Negative external forces that inhibit a company’s ability to achieve its mission, goals, company’s ability to achieve its mission, goals, and objectives are referred to as and objectives are referred to as threatsthreats

Step 4 Identify the key factors for success in the business. KSF are the factors that determine a company’s KSF are the factors that determine a company’s

ability to compete successfully in an industry.ability to compete successfully in an industry.

Strategic management Strategic management processprocess Step 5 Analyze the competition.

Sizing up the competition gives a business Sizing up the competition gives a business owner a more realistic view of the market and owner a more realistic view of the market and his or her company’s position in it.his or her company’s position in it.

Direct competitors offer the same Direct competitors offer the same products and products and services, and customers often compare prices, services, and customers often compare prices, features, and deals from these competitors as features, and deals from these competitors as they shop.they shop.

Significant competitors offer some of the same Significant competitors offer some of the same products and products and services. services.

Indirect competitors offer the same or similar Indirect competitors offer the same or similar products or services only in a small number of products or services only in a small number of areas, but their target customers seldom overlap areas, but their target customers seldom overlap yours.yours.

Strategic management Strategic management processprocess Step 6 Create company goals and

objectives. Business Business goals are the broad, long-range goals are the broad, long-range

attributes that a business seeks to attributes that a business seeks to accomplish; they tend to be general and accomplish; they tend to be general and sometimes even abstract.sometimes even abstract.

Business Business objectives are more specific targets objectives are more specific targets of performance (specific, measurable, of performance (specific, measurable, assignable, realistic, timely, written down)assignable, realistic, timely, written down)

Step 7 Formulate strategic options and select the appropriate strategies. A A strategy is a road map of the actions an strategy is a road map of the actions an

entrepreneur draws up to achieve a entrepreneur draws up to achieve a company’s mission, goals, and objectives (cost company’s mission, goals, and objectives (cost leadership, differentiation, focus)leadership, differentiation, focus)

Strategic management Strategic management processprocess Step 8 Translate strategic plans into action

plans. Implementing a strategy successfully requires Implementing a strategy successfully requires

both a process that fits a company’s culture and both a process that fits a company’s culture and the right people committed to making that the right people committed to making that process workprocess work

Step 9 Establish accurate controls. Controlling plans and projects and keeping them Controlling plans and projects and keeping them

on schedule means that an entrepreneur must on schedule means that an entrepreneur must identify and track key performance indicators.identify and track key performance indicators.

The most commonly used indicators of a The most commonly used indicators of a company’s performance are financial measures.company’s performance are financial measures.

Many companies are developing a Many companies are developing a balanced balanced scorecard, a set of multidimensional scorecard, a set of multidimensional measurements (financial and non financial)measurements (financial and non financial)

““IDENTIFICATION, EVALUATION IDENTIFICATION, EVALUATION & SELECTION”& SELECTION”

BUSINESS BUSINESS OPPORTUNITIESOPPORTUNITIES

Business opportunities: Identification, Business opportunities: Identification, Evaluation and SelectionEvaluation and Selection

The process of identifying, Evaluating and The process of identifying, Evaluating and selecting the business opportunitiesselecting the business opportunities

Step 1:Identifying the needs and wants of customersStep 1:Identifying the needs and wants of customers

Step 2:Scanning the environment and evaluating of Step 2:Scanning the environment and evaluating of self and the communityself and the community

Step 3: Screening of business opportunitiesStep 3: Screening of business opportunities

Step 4: Selecting a business opportunity and Step 4: Selecting a business opportunity and preparing a business planpreparing a business plan

Step 1:Identifying the needs and wants of Step 1:Identifying the needs and wants of customers (pg 31)customers (pg 31)

A need is something that is A need is something that is basicbasic in life in life Wants is craving for something that is far Wants is craving for something that is far

better than basic itembetter than basic item When there is more human need and When there is more human need and

wants to be fulfilled, there will be more wants to be fulfilled, there will be more business opportunitiesbusiness opportunities

Step 2: Scanning the environment and Step 2: Scanning the environment and evaluating of self and the community (pg. 33)evaluating of self and the community (pg. 33)

Market research….Market research…. Environmental scanningEnvironmental scanning

Lead to an idea that can be converted Lead to an idea that can be converted into a business opportunity; micro and into a business opportunity; micro and macro perspectivemacro perspective

Structure of population, income and tastesStructure of population, income and tastes Study of import and export dataStudy of import and export data

Step 3:Screening of business opportunities Step 3:Screening of business opportunities (pg 39)(pg 39)

Entrepreneurs may found out that there will Entrepreneurs may found out that there will be two or more business opportunitiesbe two or more business opportunities

Screening business opportunities help to Screening business opportunities help to select the best projectselect the best project

Selection process involve 4 factorsSelection process involve 4 factors LegalityLegality Monopolistic power and level of Monopolistic power and level of

competitioncompetition Capital requirementCapital requirement RiskRisk

3 categories of business risk3 categories of business risk Transferred to another party.Transferred to another party. ControlledControlled Cannot be controlledCannot be controlled

Step 4: Selecting a business opportunity and Step 4: Selecting a business opportunity and preparing a business planpreparing a business plan

Entrepreneur will end up only one business Entrepreneur will end up only one business opportunity opportunity

Go through the next step…… preparing Go through the next step…… preparing business plan.business plan.

Preparing Business Plan: Things to Preparing Business Plan: Things to considers….considers….

Issue to considers before going into Issue to considers before going into businessbusiness Resource availability; capitalResource availability; capital The opportunity; franchising vs. new The opportunity; franchising vs. new

businessbusiness Choosing the form of business Choosing the form of business

organizations:organizations: Sole proprietorshipSole proprietorship PartnershipPartnership Private limited companyPrivate limited company

Preparing Business Plan: Things to Preparing Business Plan: Things to considers….considers….

Option for going into business:Option for going into business: Starting new businessStarting new business FranchisingFranchising Buying an existing businessBuying an existing business

FranchisingFranchising FranchiseFranchise: an arrangement whereby the : an arrangement whereby the

originator of business product or operating originator of business product or operating system permits another business owner to system permits another business owner to sell goods and/or to use the business sell goods and/or to use the business operating system on the originator’s behalfoperating system on the originator’s behalf

FranchisorFranchisor: A business or individual who : A business or individual who own the rights to a particular business own the rights to a particular business franchise system or productfranchise system or product

FranchiseeFranchisee: The business/ person given : The business/ person given contractual permission by the original contractual permission by the original owner to sell productowner to sell product

Business system franchiseBusiness system franchise: Arrangement : Arrangement where franchisor supplies the products with where franchisor supplies the products with guideline given on how the business is to guideline given on how the business is to be run be run

Advantages VS Disadvantage of Advantages VS Disadvantage of FranchisingFranchising

AdvantagesAdvantages Less learning by Less learning by

mistakemistake Lower failure rateLower failure rate Provide continuing Provide continuing

trainingtraining Purchase goods in Purchase goods in

discountdiscount Easy in raising Easy in raising

capitalcapital

DisadvantagesDisadvantages Not cheapNot cheap Restriction set by Restriction set by

franchisorfranchisor Agreement in Agreement in

contractcontract

Starting new businessStarting new business

AdvantagesAdvantages Ability to determine Ability to determine

business directionbusiness direction FlexibilityFlexibility Cost minimizationCost minimization New lifestyle goalNew lifestyle goal

DisadvantagesDisadvantages Raising capitalRaising capital Lack of an Lack of an

establishes establishes customer basedcustomer based

Cash flow Cash flow shortagesshortages

Learning curve Learning curve expensesexpenses

Purchasing an existing businessPurchasing an existing business

Market-based valuationMarket-based valuation Asset- based valuation.Asset- based valuation. Earning-based valuationEarning-based valuation

FORMS OF BUSINESS FORMS OF BUSINESS ENTITIES , REGULATIONS ENTITIES , REGULATIONS

& BUSINESS SUPPORT & BUSINESS SUPPORT SYSTEMSYSTEM

FORM OF BUSINESS FORM OF BUSINESS ENTITIES IN MALAYSIAENTITIES IN MALAYSIA

IBusiness Registration

Act (Amendment 1978) & Procedures of

Business Registration 1957

IICompanies Act 1965

IVParliamentary Act or State Government

Enactment

IIICooperation Act 1948

Sole Proprietorship

Business

Partnership Business

Unlimited Company

Limited Company by

Share

Limited Company by Guarantee

Private Limited Company

Foreign Owned

Company

Public Limited Company

REGULATIONS REGULATIONS

Entrepreneurs need to know & abide by the Entrepreneurs need to know & abide by the procedures & rules governing business procedures & rules governing business entities in Malaysiaentities in Malaysia

Procedures in RegistrationProcedures in Registration

Sole Proprietorship & PartnershipSole Proprietorship & Partnership At the Business Unit of the Companies At the Business Unit of the Companies

Commission of Malaysia (CCM), Commission of Malaysia (CCM), allowed up to 7 days after the start of its allowed up to 7 days after the start of its operation to be registered.operation to be registered.

Forms (page 53-54)Forms (page 53-54) Search for business nameSearch for business name FORM A FORM A FORM DFORM D FORM A1FORM A1 FORM BFORM B FORM CFORM C

Cont’dCont’d Private Limited Company, Private Limited Company, requiresrequires: (page 57-: (page 57-

61)61) Memorandum of associationMemorandum of association Articles of associationArticles of association The share capital of a companyThe share capital of a company Members of shareholdersMembers of shareholders Board of directorsBoard of directors SecretarySecretary AuditorsAuditors Registered officeRegistered office Company sealCompany seal Authorization letterAuthorization letter

Cont’dCont’d Registration for Private limited company Registration for Private limited company

must use the services of a company must use the services of a company secretary to deal with the Companies secretary to deal with the Companies Commission of Malaysia Commission of Malaysia FORM 13AFORM 13A Memorandum of Association & Articles of Memorandum of Association & Articles of

Association:Association: FORM 6FORM 6 FORM 24FORM 24 FORM 44FORM 44 FORM 48AFORM 48A FORM 49FORM 49 Registration feeRegistration fee FORM 9FORM 9

Among the legal aspects that relate to Among the legal aspects that relate to Malaysian business are:Malaysian business are:

LicenseLicense Business licenseBusiness license Wholesaling licenseWholesaling license Manufacturing licenseManufacturing license Food manufacturing licenseFood manufacturing license Sales tax licenseSales tax license Excise licenseExcise license

Cont’dCont’d

Permits Permits Foreign workers entry permitForeign workers entry permit Transportation permitTransportation permit

Letters of authorityLetters of authority

Other procedures to be considered Other procedures to be considered assembling of machinery & equipment:assembling of machinery & equipment:

Pollution controlPollution control Business rightsBusiness rights

Trademark protectionTrademark protection Patent protection Patent protection CopyrightCopyright

Standards & qualityStandards & quality Hire purchase actHire purchase act

Cont’dCont’d

Worker’s social needsWorker’s social needs Infrastructure needsInfrastructure needs Import & export regulationsImport & export regulations

BUSINESS SUPPORT SYSTEMBUSINESS SUPPORT SYSTEM

The assistance & services given by the The assistance & services given by the government/private agencies to help government/private agencies to help entrepreneurs to start a new business/to entrepreneurs to start a new business/to develop an existing onedevelop an existing one

Support Facilities in MalaysiaSupport Facilities in Malaysia

Technical Assistance

Courses, seminars & workshops

Extension Services

ENTREPRENURAdvisory Services

Marketing Assistance

Infrastructure Assistance

Financial Assistance

R & DInformation Assistance