The Malaysian Market offers a lot of attractive opportunities to foreign investors. Because of the exciting growth opportunities, it is the top choice of foreign Entrepreneurs. But sometimes they make some costly mistakes when starting a business in Malaysia. Are you also thinking about how to open a company in Malaysia for foreigners?
Before you proceed, you should know about those costly common mistakes foreign entrepreneurs make when entering the Malaysian Market. It will keep your business safe from potential losses. At the same time, you will stay ahead of other competitors who don’t know about those mistakes.
Top 5 Common Mistakes Foreign Entrepreneurs Make When Entering the Malaysian Market
- Lack of Market Research
- Lack of Planning and Specific Objective
- Lack Of Flexibility
- Poor Marketing Strategy
- Investing in a Business Without Experts Consultancy
1. Lack of Market Research
It’s true that there are huge possibilities for business in Malaysia for foreign entrepreneurs. For example, Penang generated around $12.8 billion through Foreign Direct Investment (FDI) in 2023. Oracle has announced they are going to invest over USD 6.5 billion to open a public cloud region in Malaysia. Those investments are related to the IT sector.
If you start investing in the IT sector just by hearing some news like that, most probably you will have to struggle in the future. Before you proceed to register a company in Malaysia, you have to do proper research about the market. You have to find out the gap and pain points of the market. If you can provide the solution, it’s only a matter of time to make your business shine.
2. Lack of Planning and Specific Objective
You should enter the Malaysian market with proper planning. Also, you should have a specific objective. Set a specific time frame to achieve those goals. It will give you a better idea about how you are progressing. If there is any improvement needed, you will be able to identify it through the growth report.
Otherwise, you won’t be able to generate a good return. Investing in a business without having proper goals is like riding a boat in the deep ocean. You won’t have any idea about what’s going on. You should keep the goal simple, specific, miserable, and achievable. It will give you a clear roadmap on how to proceed.
3. Lack Of Flexibility
The business industries are changing constantly. The market trends and consumers’ purchasing behavior are also changing. So, you should enter the Malaysian market with a dynamic business model. Your business should have the flexibility to adapt to those changes. Otherwise, your business will be lost in the crowd because of a lack of flexibility.
Many businesses have failed because of that costly mistake. 40.1% of internet users in Malaysia discover brands through social media advertisements, 37.1% via search engines, and 34.2% through retail websites. Your product should have the x-factor to attract those audiences. Your business should be able to cope with the latest business trends.
4. Poor Marketing Strategy
Poor marketing strategy is such a costly mistake that can single-handedly damage your business. This is not only applicable for foreign entrepreneurs entering the Malaysian Market but also it is a common mistake in any business field. New Entrepreneurs often make this big mistake and have to pay costly penalties.
According to Statista, Digital Advertising is the main contributor to business marketing with a 61.51% market share. Out-of-Home (OOH) Advertising holds the 2nd position with a 12.57% share. If you are thinking about company registration in Malaysia, you have to plan a marketing strategy based on what’s working in the Malaysian Market. Based on the stats, you have to consider digital advertising.
5. Investing in a Business Without Experts Consultancy
This is a common mistake foreign entrepreneurs make when entering the Malaysian Market. Particularly, when you are comparably new to entering the Malaysian market, you will face more challenges with that. Getting business experts’ consultancy would make things easier for you. With proper guidelines and information, you will be able to make informed decisions.
That will increase the chances of making the right decision. As a result, there will be higher chances of making a profit. You can get multiple business consulting firms online. SFM Consulting Firm is a trusted business consulting firm in Malaysia. You can think about getting their expert consultancy to make the path easier for you.
Sum Up
All those mistakes can cause your business financial losses. If a business continues making those mistakes repeatedly, it could even cause the business to get shut down. Thankfully, your business will be safe as you already know about common mistakes foreign entrepreneurs make when entering the Malaysian Market.
Before you start investing in a country, you need to have proper knowledge about the common mistakes to avoid and tips to follow. On that note, SFM Consulting Firm will be the best solution to guide you through the entire process of company registration in Malaysia.
FAQ
What are some common mistakes that a company can make when entering a foreign market using its home market’s business model?
A. Choosing the wrong sector, investing in multiple businesses at a time, investing without proper knowledge about the current market, lack of planning, and lack of local contacts are some common mistakes that a company could make when entering a foreign market.
What are the challenges of entrepreneurship in Malaysia?
A. According to the report published by the British Council Malaysia, lack of cash flow (55%), lack of awareness of social enterprises (36 %), and recruiting staff or volunteers (33% percent) are the top 3 challenges of entrepreneurship in Malaysia.
What are the risks of doing business in Malaysia?
A. Business opportunities are high in Malaysia. At the same time, you may have to face several risks. Complex procedures of approval can delay the acquisition of licenses, permits, and regulatory clearances. Besides, different regions may have different regulations. It can create confusion.
What are 3 of the biggest mistakes entrepreneurs make?
A. Starting a business without proper market research, investing in a business that doesn’t have any proper goals, and continuing to invest in a business without having enough resources to succeed are the top 3 biggest mistakes entrepreneurs make.
Sources:
- https://www.mida.gov.my/mida-news/global-spotlight-on-malaysia-as-it-emerges-as-semiconductor-powerhouse/
- https://www.statista.com/statistics/1550523/malaysia-media-advertising-market-share-by-platform/
Author Bio:
Writer:
Content Is Written By:
Mia Biajid – Business & Finance Content Writer
Mia Biajid is a professional content writer with six years of experience in writing informative content in the business sector. He has a deep understanding of market trends, entrepreneurship, and financial strategies. Mia specializes in delivering insightful articles that help businesses to grow. His expertise covers business development, investment insights, and corporate strategies. Having that much experience makes him a trusted voice in the business industry.
Reviewer:
Article Reviewed By
Md Forhad Hossain
(BA-Hons, MBA, LL.B, LL.M)
Meet Md. Forhad Hossain – is an expert in company registration with over 14 years of experience. He has helped more than 400 businesses in Malaysia and over 7,000 clients from around the world start their journey successfully.
Forhad is passionate about making business registration simple and stress-free. His knowledge and dedication have earned him the trust of entrepreneurs worldwide.
If you’re looking for someone to guide you, Md. Forhad Hossain is the name you can Rely on.
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