MARCH 14 — As Malaysia’s economy continues to recover from the Covid-19 pandemic, the survival and sustainability of micro entrepreneurs have become increasingly important. During the pandemic, many individuals who lost their jobs or experienced reduced income turned into small businesses such as home food production, catering services, street food vending and the sale of traditional snacks to support their families.

These small businesses have become a vital source of livelihood for many households, particularly those in the B40 income group. For many families, running a small business from home provides an important way to generate income and maintain financial stability.

However, sustaining a small business over the long term remains a significant challenge. Micro, small and medium enterprises (MSMEs) account for about 97 percent of all business establishments in Malaysia, making them the backbone of the national economy.

Among these, micro enterprises represent the largest share, accounting for around 70 percent of businesses nationwide. These enterprises play an important role in generating employment, supporting household incomes and sustaining local economic activities.

Despite their importance, micro enterprises are often more vulnerable than larger businesses. Many operate with limited capital, informal business structures and minimal access to professional business advice. As a result, entrepreneurs frequently rely on trial and error when making decisions related to pricing, marketing and financial management.

The challenges faced by micro entrepreneurs became particularly evident during the Covid-19 pandemic. Many micro businesses experienced a sharp decline in sales as movement restrictions and reduced economic activity disrupted business operations. At the same time, many struggled with severe cash flow disruptions, highlighting the financial vulnerability of micro enterprises during periods of economic uncertainty. While some businesses managed to adapt, others were forced to temporarily suspend operations or close altogether.

For many Malaysians, however, the pandemic also marked the beginning of their entrepreneurial journey. Individuals who lost their jobs or experienced reduced household income began starting small businesses within their neighbourhood communities. Selling homemade cakes, traditional snacks, cooked meals and other food products became a practical way to generate income during a difficult period.

While starting a small business can provide immediate financial relief, sustaining the business requires more than determination and hard work. Many first-time entrepreneurs begin their ventures without formal business training and often lack the knowledge needed to manage finances, market their products effectively or plan for business growth.

In Malaysia, the government has introduced various initiatives aimed at strengthening small businesses, particularly among the B40 community. Agencies such as Tekun Nasional and Amanah Ikhtiar Malaysia provide micro financing schemes that enable entrepreneurs to access capital that may otherwise be unavailable through traditional banking channels.

Additionally, programmes such as iTekad, led by Bank Negara Malaysia together with participating financial institutions, combine financial assistance with entrepreneurship training and financial management education. This integrated approach helps low-income entrepreneurs strengthen both their financial management skills and business capabilities.

During the Covid-19 pandemic, the government also introduced several economic stimulus packages designed to help micro and small businesses remain operational despite economic disruptions.

While these initiatives play an important role in helping entrepreneurs start or sustain their businesses, financial assistance alone may not be sufficient to ensure long term sustainability. Many micro entrepreneurs continue to face challenges related to limited business knowledge, weak financial management practices and a lack of strategic guidance.

This is where mentoring programmes and stronger financial management practices become increasingly important – helping entrepreneurs build the skills needed to sustain and grow their businesses.

Mentoring allows entrepreneurs to receive practical guidance from more experienced entrepreneurs who can offer advice on improving business operations, enhancing product quality and identifying new market opportunities. For many small business owners, particularly those operating businesses from home, mentoring also provides encouragement and confidence when navigating business challenges.

Mentoring programmes also encourage peer learning. Entrepreneurs who participate in these programmes often share experiences, exchange ideas and learn from one another.

These interactions can create supportive networks where small business owners discuss common challenges and discover practical ways to improve their products or services.

Equally important for sustaining small businesses is the adoption of stronger financial management practices. Many micro entrepreneurs operate their businesses without maintaining proper financial records. Instead, they rely on memory or bank account balances to estimate their earnings and expenses. Without proper financial management, entrepreneurs may struggle to determine whether their business is actually generating profit.

This makes it difficult to manage cash flow, plan for expansion or make informed decisions about pricing and costs.

Simple practices such as recording daily sales, tracking expenses, monitoring cash flow and separating personal and business finances can significantly improve the way entrepreneurs manage their businesses. These practices provide entrepreneurs with a clearer understanding of their financial position and enable them to make better business decisions.

Supporting micro entrepreneurs also contributes to broader efforts to reduce poverty and strengthen economic resilience among vulnerable communities. When small businesses are able to sustain their operations, they provide more stable sources of income for households, particularly within the B40 community.

In this way, mentoring initiatives and financial capability programmes can play a meaningful role in improving livelihoods and strengthening community resilience. These efforts are closely aligned with the United Nation SDG 1, which emphasises the importance of expanding economic opportunities and supporting vulnerable populations in building sustainable livelihoods.

Micro entrepreneurs may operate on a small scale, but their collective contribution to the economy and society is significant. With the right support systems in place, including mentoring, stronger financial management skills and supportive business networks, these small businesses can become more resilient and sustainable.

Empowering micro entrepreneurs is not simply about supporting small businesses. It is about strengthening communities, improving household livelihoods and building a more inclusive and resilient economy for Malaysia’s future.

* Associate Professor Mazni Abdullah and Associate Professor Noor Sharoja Sapiei are academics at the Faculty of Business and Economics, Universiti Malaya, and can be reached at mazni@um.edu.my and noorsharoja@um.edu.my

** This is the personal opinion of the writer or publication and does not necessarily represent the views of Malay Mail.