MALAYSIAN small businesses are celebrating their strongest growth since the onset of the pandemic, according to a recent survey by CPA Australia.
The survey revealed that 66% of small businesses experienced growth in 2023, and an even more optimistic outlook is projected for 2024, with 78% anticipating growth — marking the country’s best performance since 2012 and surpassing the regional average of 70%.
This buoyant sentiment is underpinned by a robust confidence in the economy, with nearly three-quarters of respondents expecting growth this year, exceeding the regional average of 65%.
However, amid this optimism, concerns linger over the rising cost of doing business.
Material costs, utility expenses, staffing and rental fees were cited as the most significant cost pressures faced by businesses in the past year, with nearly half reporting a negative impact on their operations.
A notable shift is observed in the investment landscape, with 59% of small businesses seeking external funding for growth initiatives in 2023, indicating a transition from survival mode in the previous year. Driving this growth trajectory are young entrepreneurs, who are leading the charge in innovation and technology adoption.
“Young entrepreneurs are driving the momentum on innovation and technology uptake.
“The survey results have shown over many years that small businesses with younger entrepreneurs are more likely to be growing, innovating, using emerging technologies and exporting,” said CPA Australia Malaysia Division president, Surin Segar in a statement.
Investments in mobile apps, alongside advancements in digital payment technologies and expanded social media presence, are yielding strong returns for Malaysian small businesses.
Approximately 50% of respondents reported improved profitability as a result of technology investments in 2023.
Looking ahead, 32% of small businesses plan to introduce new products, processes, or services in 2024, signalling a commitment to long-term growth and enhanced competitiveness.
“With many small businesses being risk averse, it is imperative for policymakers to support potentially inexperienced young people
owning or in key positions to seek business advice,” Surin said.
However, amid the rapid digitalisation, concerns regarding cybersecurity have heightened, with 52% of business owners conducting cyber-security reviews in the past six months, reflecting a proactive stance toward mitigating cyber risks.
“It is encouraging to see the increase in cyber risk awareness as the government continues to strengthen regulatory frameworks with the new Cyber Security Bill tabled in Parliament. This is aligned with the Communications and Digital Ministry’s call for collective action and global coordination to counter cyber threats,” said Surin.
In response to evolving business dynamics, there is a growing emphasis on environmental, social, and governance (ESG) practices among small businesses.
Focus areas include staff health and safety, supply chain sustainability and diversity and inclusion policies.
“We hope to see increased investment in advanced ESG practices such as renewable energy (RE) and the adoption of green and sustainable finance opportunities,” Surin added.
Source: https://themalaysianreserve.com/2024/04/09/malaysian-small-businesses-thrive-post-pandemic/