PETALING JAYA: Malaysia’s 907,065 small and medium enterprises (SMEs) are living in very uncertain times with low visibility on what comes next.
Businesses across the country have barely hung on after the arrival and persistence of Covid-19.
In this regard, entrepreneurs need to live in a new normal, which would entail high adoption rate of technology as businesses have learnt their lesson well during the coronavirus outbreak, says an economist.
Bank Islam Malaysia Bhd chief economist Mohd Afzanizam Abdul Rashid said small businesses must be cognisant on how they should seek help to upgrade their business operation, sales and market segmentation by ensuring that technology will be embedded in every aspect of their business.
As such, he said, all SMEs should explore what assistance are provided by the relevant government agencies that can assist them in transforming their business in the most efficient and cost-effective manner.
For instance, matching grants of up to RM5,000 provided by the Malaysia Digital Economy Corp (MDEC) for digitalising the business should be fully utilised by SMEs in respect of technological adoption.
“In a way, the pandemic has become a wake-up call for SMEs that threats to businesses could come in various directions. Therefore, it is critically important to be ready for changes and to be swift in their response,” he told Bernama.
Mohd Afzanizam said that apart from digitalisation and technological adoption, the businesses must be open to diversify their revenue stream and this would mean they must explore other industries so that they would not be overly dependent on one revenue source.
“Perhaps, exploring for joint venture or partnering could be the options to safeguard the market share and to gain operational efficiency,” he suggested.
Explaining further, he said research and development as well as upskilling require time and money.
However, SMEs are not fully convinced that such investment would help to future-proof them from threats of intense competition and economic shocks.
“In order to bridge the gap between their fear factor and what is available to them, constant engagement with the relevant government agencies would help the SMEs to have a clear view on how they should capitalise the available measures and incentives provided by the government.
“This may include organising a workshop, conferences and exhibition to help allay their concern or misconception among the SMEs about the need to upskill their businesses,” he added.
Meanwhile, HSBC Malaysia country head of commercial banking Andrew Sill said SMEs should get the basics on cash management right and tight.
He said basic principles like preparing payments with the correct value date, collecting receivables with real time reconciliation and paying invoices on time will yield far bigger benefits than saving a few thousand dollars from having tough pricing discussions or negotiating the right tariff. ― Bernama