Not sure what kind of business your side gig falls under? Here"s a primer on SME businesses and what that might mean for you and your company. — Image courtesy of RInggitPlus

KUALA LUMPUR, Jan 22 — Starting your own business is something we talk about quite often here on RinggitPlus. We cover topics from how to get started with making money off of your hobbies, the different kinds of business entities you can register as, and even what to figure out before you even start a business of any kind.

Knowing the kind of company you have will not only affect your day-to-day operations, it would also affect how the government treats you and what sort of perks or pitfalls you should pay special attention to.

One category of enterprise that plenty of new businesses fall into would be SME businesses or Small Medium Enterprises. Not quite sure what that entails? Let’s explore this type of enterprise further then.

What qualifies as an SME business?

SME stands for Small or Medium Enterprises, which means their number of assets, number of employees, and amount of revenue have to be below a certain threshold to qualify. The thresholds depend on which industry the enterprise operates in, which country it’s based in, and several other factors.

SME businesses play an important role in most economies but particularly so for emerging economies like Malaysia. SMEs contribute 80% of new jobs in emerging economies and most people with formal occupations in these economies work for an SME.

The strength of SMEs is that they can innovate faster and come up with new solutions to existing problems in their industry. However, due to their modest size and relative volatility compared to larger enterprises, it’s harder for them to secure funding and capital. But since their continued growth is an essential contributor to developing economies like Malaysia, it bodes well for the government to provide some assistance to help them along.

Before they can do that though, they would need to determine the specific criteria that describes SME businesses in Malaysia.

SME definition according to Suruhanjaya Syarikat Malaysia

As we’ve mentioned above, different countries around the world apply different rules when deciding whether or not an enterprise counts as an SME. For Malaysia, the Companies Commission of Malaysia (Suruhanjaya Syarikat Malaysia) defines SME businesses like so:

Based on this, I think my business is an SME Business... Now what?

 

Now you can head over to SME Corp Malaysia’s official website and see the resources available to you. Their assistance programmes include, but are not limited to: