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Sme in Malaysia

In: Business and Management

Submitted By scaw
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INTRODUCTION

Generally, there are two categories of small and medium enterprise (SME) in Malaysia. The first category comprises agriculture, services, information and communication technology (ICT) with less than 50 full-time employees or annual sales turnover fewer than RM 5 million. The second included manufacturing and agro-industries with less than 150 full-time employees or annual sales turnover not exceeding RM25 million. Small and medium sized enterprise (SME) is the engine for economic growth. Development of SME brings technology development and employment creation. Michael and John (1998) have noted that relative to larger firms, SMEs are well prepared for facing the challenges of increasing competition and globalization of markets. Planning is usually done first by entrepreneur when decided to start a SME. This is because everything else will be depends on the planning makes by the entrepreneur. A business plan plays an important role in obtaining funds and as a blueprint for the enterprise operates towards success. As Peel and Bridge (1998) and George and Jonathan (2002) reported, there is a strong connection between the success of a SME and its long-term planning. In Malaysia, National SME Development Council (NSDC) was established in June 2004. It acts as the highest policy-making body to chart the direction and strategies comprehensive and coordinated development across all sectors of the economy. Some examples of successful SMEs in Malaysia are Unico Holdings (Unico) and Hockpin Precision Sdn Bhd (HP). A SME have better potential in creating new jobs faster than a larger firm. SME also able to eliminate faster when there is a relatively high failure rate.

IMPORTANCE OF PLANNING IN SME

According to Maureen (1998), as SMEs grow, they must accommodate their enterprise from aspect...

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