Information Availability on Entrepreneurial Creation Among Malaysian Youths

A research I done quite some time ago for one of my “business content” ventures but scrapped the idea and convert it into information for those that want to target youths as their customers, etc.

Information Availability on Entrepreneurial Creation Among Malaysian Youths

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Project Management Foundation: The Triangle & Quality Control

Project Management. What is so important about it? It’s simply creating something out of nothing.

For seasoned entrepreneurs in large organizations, this is a common term and practice in business. For newcomers in the field of entrepreneurship, this can be an entirely new thing.

The meaning of project management is simply to manage projects initiated and agreed upon by the company. In fundamental terms, PMI (Project Management Institute) defined project mgmt as : “a temporary endeavour to create product or service“.

My understanding of project management is simply this: to create something which would give returns to the company be it monetary or non-monetary value.

What kind of projects are involved in project management?

1. Starting up a new business (aha.. got your eyes interested suddenly?)
2. Starting up a new venture (products, subsidaries, market development, promotion, marketing)
3. Routine tasks (improvement of production of an equipment)
4. Any other things that is temporary and needs teamwork effort

So what’s the big deal?

Well just like starting up a new business, you need to get everything carefully planned, implemented & executed to ensure that you can create a business. It’s not just like today you wake up, “eh i wanna start a business and just do it”. Compare it like building a house, you need all the expertise, due diligence and everything settled to get a good house built. It’s not like you just wake up and say, let’s build!

The basics of project management is the triangle.

Your scope is your vision. Any company got to have a vision. Just like when you start a business, you got to have an aim. Whether your aim is getting money, passion, interest, etc, it’s still a vision.

Scope can be derived from this: Your Objective / Aim -> Company Vision -> Project Scope

The cost is of course your budget to start the project.

The time is the duration needed to start the project. Some of the constraints you’ll face about ‘time’:

• Limited time given by your senior management on project completion
• Pressure of ‘time-to-market’ rush by other departments for New Product Development (NPD)
• Project activity failure and you need to speed up other activities to meet your deadline

And then comes quality. Why is quality so important?

In my perspective, there’s no compromise on quality. If it’s a product we’re developing or systems for the organization, quality is what we want.

Think of it like this: if you have a child and you ask him to complete his colouring homework. Would you accept it if your child just finish the homework by colouring everything from the trees to the bench in blue. Or would you like your child to colour everything in the right colour? It’s the same as quality. The people who are expecting you to complete the project are expecting something which is what they pictured (their quality).

So how do you ensure quality is met?

Embed quality plan into the project culture right from the first day. Remember the first meeting where you discuss the deliverables (be it participatory mangement style or defined by you the project manager), embed quality as the “acceptance criteria” of a completed activity. That means your team members would have to complete their work according to the quality to get it accepted or rejected. (This method can also be used for employee appraisal)

What is the contents in the quality plan?

• Standards (your standards, government requirements, industry acceptance)
• Quality assurance methods (TQM, etc)
• Responsibilites (who will check the work, who does the work)

How do you integrate the quality plan with project management practices?

In my perspective, it’s better to draft the whole quality plan separately and then integrate it into the “Work Breakdown Structure”. The WBS already has milestones, activity, who’s responsible and the duration, therefore the acceptance criteria derived from quality plan can be inserted in.

For more information you can read from other websites:

• Quality plan by British Computing Systems
• Work Breakdown Structure
• Project Management

Tabung Usahawan Siswazah @ Graduate Entrepreneurs Scheme

I’ve attented a course months back organized by INSKEN (Institut Keusahawanan Negara) under the Skim Usahawan Siswazah to be eligible to ask for loan under tabung usahawan siswazah or called graduate entrepreneurs scheme.

So what is Tabung Usahawan Siswazah?

It’s a loan for graduates venturing into entrepreneurship be it startups or company expansion.

Who administer the fund?

It’s being administered by SME Bank. If you would like to know more about this fund, call them up at 1-300-88-3131 or visit their website: SME Bank.

What is the eligibility of applying for Tabung Usahawan Siswazah?

• Have finished the Skim Usahawan Siswazah seminar or Kursus Asas Keusahawanan Siswa or other approved seminars equivalent.

How do I apply for the seminar to be eligible for TUS?

• Previously I just applied online under the Ministry’s website. But since the ministry is disbanded, try and keep yourself updated through INSKEN website at : http://www.insken.gov.my or call them at : +603-8880 5711

What is the loan amount and interest rate?

The loan amount is from RM20,000 to RM250,000 and the interest rate of 4% (without BLR ok!)

Do I need a collateral or guarantor?

For below RM50,000 it works like micro loan where you need a guarantor with a specified income while for RM50,001 above, you need to have at a percentage of collateral and guarantor.

What are the allowable expenses for the fund?

• Fixed assets and working capital
• Maximum payback period of up to 10 years with grace period of 2 years (grace period depends upon their discretion)

What are the indsutry allowed for the funds?

All industries as long as it’s profitable and approved by the panel during your business presentation.

What is the application process? (based on my experience with my friend)

• Send your business plan for review to INSKEN
• INSKEN submit your plan to SME Bank
• SME Bank call you up for an interview
• Results would be notified after interview

Note: During the seminar I was notified that application process is around 2 months. They have a tight ISO therefore they should complete your application on time.

Please take note that I was notified by SME Bank that all applications for the fund is on hold but the funds are there for us, graduates. It’s being put on hold because the Ministry of Entrepreneur and Co-operative Development is no more and they are now under the directions of MITI (Ministry of International Trade and Industry). I hope Tok Pa and Dato’ Mukhriz speed up the process as lots of us graduates are anxious to apply for the fund:)

Tips: My friend is a wedding planner (sole proprietorship) and she applied for the fund. Given her experience in doing business and a good business plan, she managed to secure the funds and had a good interview. T0 increase your odds of getting the fund:

1. Start your business in micro terms: kecil-kecilan. Ask for micro loan 1st to get experience on your business first.
2. Gain working experience in the industry. Say you wanna open up an IT business, work with a company which is similar to your business idea and apply from there.
3. Get a strong and experienced management team. Recruit experienced people into your team to do the business. This would lower the risk of the bank and hence easier for you to secure funding.
4. Do your homework. Don’t ask silly questions, always research throughly about the fund before applying.

Cost of Doing Business for Startups – Complete pricing list!

Ever wondered the cost of setting up your business in Malaysia? There’s a free book for you published by MIDA (Malaysia Industrial Development Authority). In da book are all the data needed to form your business plan, marketing plan, etc.

What is the contents of the book? (In Bahasa Malaysia)

1. Permulaan Perniagaan (Sewa tanah, register syarikat di SSM, etc)
2. Percukaian di Malaysia
3. Sumber Manusia (gaji, kwsp, socso,etc)
4. Utiliti (air, elektrik, bahan api, telefon)
5. Kos Pengangkutan (fret udara, laut, kontainer, etc)
6. Kadar Hidup di Malaysia (harga hidup harian, beli belah, etc)

Where can I download the book? (very large size)

• Download in Bahasa Melayu
• Download in English

This book is useful for:

• Entrepreneurs preparing their business plan for presentation to anyone to secure loan, etc.
• Those who want to have an accurate measure of their costs for the 3 years cashflow projection

MSC Technopreneur Pre-Seed Funding (Grant)

Multimedia Super Corridor Technopreneur Pre Seed funding is specialy tailored for technopreneurs at the pre seed level stage. Pre-seed means you have an idea but you do not have a product as of yet. Therefore this grant is given to you to change your idea into a product.

Please do not get confused with business loan which is focused directly on business expenditure, this grant is for you to create your product (product focused expenditure).

Again, this is a conditional grant, therefore you must make sure you complete the deliverables you agree (example: build software until the functional stage, etc). If you violate the deliverables or don’t complete the project as agreed you can be liable to pay. Please take note that if you receive investment, loan or grant worth RM1 million and above, you have to pay back your grant. If you don’t get such investment or grant, no need pay.

Who is eligible for this funding?

• Malaysians and applicants must be individuals of at least 2 person (aged 21 years old and above)
• One project member must work full time
• For university students and employees, you need to get your head of department to sign letter of consent

Your business idea must be within this qualifying category to get the funding:

• Creative multimedia and content development
• Software development
• Internet based businesses
• Support services
• Shared services outsourcing
• Hardware design

Funding amount?

RM150,000 maximum with a 12 months duration of completion.

What is the qualifying expenditure?

• Consultancy, Research & Development Services-Outsource (20%)
• Development Materials-Components and devices
• Company Incorporation-(RM2.5k)
• MSC Malaysia status application-(RM2k)
• Market Feasibility Testing-Travel & Accommodation (10%)
• Laptops/desktops/printers/software (10%)
• Allowance-Max RM1.5k per member (RM90k & Max 5 members)

How do I apply?

Please take note that the pre seed funding application is open in batches. Refer to the website for the opening dates to apply.

How do I contact them?

MSC Malaysia Technology Commercialization Centre
c/o Secretariat, Technopreneur Pre-Seed Fund Programme
Technopreneur Development Division
Multimedia University (MMU)
63000 Cyberjaya
Selangor Darul Ehsan

You can call them at +603-8313 8000 or e-mail:   techpreseed@mdec.com.my

You can visit the site at Technopreneur Pre Seed Funding – Technepreneur development website or download the documents below:

• Application Form and Guide
• FAQ

Failure of Obtaining Business Loan from Bank for Graduate Entrepreneurs

I’ve read lots of posts in forum where Malaysians would complain that obtaining loan is not as easy as promoted by banks for graduates. Although the Malaysian government have prepared banking facilities such as “Tabung Usahawan Siswazah”, pembiayaan mikro or anything else, there are still problems in getting the funds to start the business.

What is the problem really?

Before I start putting down into words, please take this analogy:

Mr. X approach you to request for funds (pinjaman) for his business. Mr. X talks about his idea to you but he has no business documents prepared. You request for the information on the business he is doing but it seems that Mr. X does not understand the nature of his business in economic form, etc. Sensing a problem with his idea, you replied no to Mr. X request.

Now change “Mr. X” as yourself and you as the “bank”. Would you lend him some money to start his business except out of curteosy? Remember banks are not charity institutions.

What are the factors that would make you fail to get the loan?

• Not understanding the business loan application process. You need to know the documents required, the guidelines and standards on paper presentation by the bank, disclosures, etc.
  (I have an experience of such an embarrassment when I to the bank and request to open up a partnership account. We forgot our company stamp, we don’t even did our homework on what documents to prepare for the application. The bank officer laughed and it was not funny but it did teach me a lesson. Do this for bank loan application, you create a very bad impression.)
• Incomplete business plan (Rancangan Perniagaan tidak lengkap @ buat cincai). Business plan is the most important aspect where the officer would look through and decide on first sight whether your business is viable or not. You must make sure that every detail is based on facts, for example your potential market size must be based on the demographics obtained from the Majlis Perbandaran. If you take it easy, you assume, then they’ll make an assumption of your loan too.
  (Another experience of mine: We did not prepare our business idea well for the pre-seed funding application under MSC Technopreneur Funding. Although it looks nice but during the interview the panel asked us about our biasness of just listing 2 competitors. Indirectly, he means we are not doing our homework. So our application got turned down)
• Your loan payback attitude. Make sure you are the type who is eager to pay back your loan. Usually before getting this kind of loan you would have to answer a series of tests. This test would determine whether you wanna pay back or not. If you are the type who is “liat nak bayar”, change your attitude.
• Your business in the economic situation. A bank would be likely to have funded a similar business like yours, therefore they understand the economy better. You must convince them through your reasearch and papers that your business is better and would guarantee you can pay back their loan. Some people drop dead when the officer asks: “bisnes ni tak boleh dik, ekonomi tak bagus, bank tak nak.” If you give up on this first sight, then you must consider what is the meaning of “entrepreneur”
• Collateral and guarantor (penjamin & cagaran). Remember this: the more the amount you ask for loan, the more collateral and guarantor needed. You must secure guarantor and collateral in any way if you want the loan. This has and always will be the problem of getting loan. Be smart, if you can’t get loan, go for pre seed funding first or a different industry.
• Inexperienced management team. Let’s face it, no experience, no loan. But remember, as an entrepreneur, you can afford to search for people who are experienced and offer them a job in your startup. What you need to do is to secure their funding once they agree to join you with the salary you offer him/her.
• Being an idiot. Simply asking stupid questions where the answers are clearly on the papers or not doing your research before presenting something is darn stupid. Avoid being labelled as one, because being a graduate, experienced people would have a perception that you are not knowledgable therefore you need to capture them by talking in their own business language and being knowledgable.

Hopefully that helps, based on my own experience and some of my friend’s experience while helping her getting a loan successfully for the Tabung Usahawan Siswazah.

All da best!

PUNB Prosper Scheme : Siswazah

I love this post the most! I am a graduate as well therefore opportunities given to graduates to start up their own business are lots! I’ll post on Graduate Entrepreneurs Fund by SME Bank in the next few days.

What is SKIM Prosper Siswazah?

It’s for graduates who aspires to be trained as an entrepreneur and to startup their own business. Focus is mainly on retailing (peruncitan) but I was informed during Skim Usahawan Siswazah that it is open to any type of business approved at the discretion of PUNB.

What is punb?

Permodalan Usahawan Nasional Berhad. You can go to their website at : http://www.punb.com.my

Who is eligible?

For individuals:

• Bumiputera graduates with at least a diploma
• Aged not more than 33
• Cost of investment is RM500

For companies:

• 100% bumiputera owned
• New startups or company expansion

What is the interest rate?

It is charged at 3% (during the time i was informed). Without BLR. That means 3% flat with a negotiated grace period. Grace period is the time where you don’t have to pay the loan. For example, you have to pay back in 5 years, the 1st year no need pay and the rest must pay.

What is the financing method:

Package A

• Loan amount of Rm5,000 – RM50,000 for sole proprietorship & sdn bhd (1 person or company)
• Payback period is 3-7 years

Package B

• Loan amount of RM50,001 – RM100,000 for partnership & sdn bhd (2 person or company)
• Payback period is 5-7 years

For both packages you get advisory services which includes, per operation, accounts management and training during the financing period.

What is the process?

It’s just like SKIM Prosper Peruncitan I posted earlier:

• Register and pass the competency test,
• Go for Kursus Rancangan Perniagaan Prosper Siswazah for 3 days,
• Present your RP, Rancangan Perniagaan or Business Plan as you call it
• Approval
• Go for Kursus Asas Keusahawanan Siswazah for 4 days

If you are interested, You can get the form by registering online at PUNB E-Borang or contact the secretariat at:

Sekretariat PROSPER
PERBADANAN USAHAWAN NASIONAL BERHAD
Tingkat 10, Blok 1B
Plaza Sentral
Jalan Stesen Sentral 5
Kuala Lumpur Sentral
50470 Kuala Lumpur

Alternatively, you can email prosper_siswazah@punb.com.my or call +603 2785 1515

FREE Net Present Value Calculator (For Asset Acquisition)

For those not in finance, you would ask, what is the purpose of Net Present Value (NPV) for your business? Well it has many usage. Let me translate NPV in easy understanding:

• To measure the profitability of acquiring an asset or investment. (example: how do you determine whether the premix plant you purchase today will give you profit or loss?)
• Difference between cash inflow and cash outflow (example: the cash you get from your premix plant less the maintenance cost needed,etc)

What is the formula of Net Present Value?

The following formula is taken from wikipedia in which R = cash inflow – cash outflow, i = discount rate (rate of return), t= time period.

So where is the NPV calculator?

You can download it here (click on the download now button). I made this in excel file for one of the clients we consult when I was in wesolve.info.

How do I use the calculator?

You only need to key in these 2 items:

• Cost of Technology Acquisition (the cost you wanna buy that property, plant or equipment)
• Recurring Cost Per Year (the cost you have to maintain that property,plant or equipment)

What information do I get from the calculator?

• Net Present Value of All Costs for 5 years
• Decision factor whether you want to invest or acquire the asset or not through (NPV > 0)
• Cash flow analysis for break even (when you get all your money back after purchasing that asset)

For advanced users, you may ask about the discount rate. You may notice that I set here 12% discount rate and for every year there is a formula in terms of 0.812. This is a tabulated formula. Should you wanna change the discount rate %, just key in the amount into the “Discount Rate” column.

What is a discount rate?

Interest rate Bank Negara charges to the financial institution from the amount it borrows.

How does it effect me, purchasing an equipment then?

The higher the interest rate, the more you gotta pay, hence it could be riskier and your cash flow NPV can be less.

How do you determine discount rate for your OWN NPV? (depends on your value judgement entirely)

• Weighted average cost of capital which is after tax is used for companies to make management decision
• Direct comparison. For example: you want to buy photostat machine A and B. Use the discount rate from B to compare whether A gives you better return or not.

When do I decide whether I should purchase the equipment or invest in something?

When your NPV>0, it shows positive return. If your NPV=0 it’s breakeven. If your NPV<0, then better dont buy buat rugi jer.

For more information on NPV, check out these sites:

• Investopedia – NPV
• Wikipedia – NPV

List of Micro Loans / Microfinance / Pembiayaan Mikro in Malaysia

Whatever the terms maybe in Malaysia, micro loan has one sole purpose which is to provide financing for those that do not possess collateral or guarantor. My first encounter and research on micro loan was during my Islamic finance class. I came to know about Grameen Bank and its activities which provided such services and its contribution so significant, the founder Muhammad Yunus received the Nobel Prize!

So what is micro loan for?

I’ve posted a post related to micro loan but here I will be more specific. Micro loan has the following features:

• Short disbursement time than other loan application
• Loan amount is usually less than RM50,000
• No guarantor needed or guarantor with minimum income of RM1,000 below (penjamin)
• No collateral needed (tiada cagaran ke atas aset persendirian, tanah ke ape, etc)

If you need information on previous posts about micro loan, you can click the links below:

• Skim Tabung Ekonomi Belia

So what are the available micro loan from Malaysian private banks? You can click the link below to go to their site for more clarification but the above characteristics still apply.
(P/S: for complete comparison table and contact number, you can download here from SMEINFO: Comparative Table on Pembiayaan Mikro)

• Modal Usahawan Tani – Agrobank (For expansion of agriculture projects)
• AmMikro – AmBank (For entrepreneurs)
• CIMB Express Cash Financing-i (for self employed and entrepreneurs)

What you need to keep in mind when applying for micro loans?

• Micro loans are not for the purchase of fixed assets! Usually it’s in the form of working capital or capital expenditure. Don’t expect to buy machinery with this loan.
• Be ready with your previous audited financial statement or your bank statement accounts (3 months)
• Be sure to check the micro loan is for business expansion or startup. If startup, try Skim Tabung Ekonomi Belia as above.
• Of course, you have to be Malaysian and usually 21 years old above.