According to the long-running accounting body, CPA Australia, Malaysia’s SMEs, especially the smaller businesses, have entered the COVID-19 crisis in relatively decent financial health. They state that over 67.7 percent of small businesses have grown in 2019.
These findings were from a recent survey on small businesses across the APAC region by CPA Australia. In addition, the survey showed that only about 16.3 percent of businesses found it difficult to pay debts in 2019.
Malaysia’s small businesses reported both reasonably strong finances and use of digital technology last year, it said.
“They are well-placed to manage through the Covid-19 crisis and recover fairly quickly.
“The businesses are well placed to offset at least some of their lost sales from traditional means, and to respond to significant shifts in consumer behaviour to online sales that the Movement Control Order (MCO) is driving, which is likely to continue well after the MCO is lifted,” CPA Australia said.
Additionally, the report also stated that up to 51.7 percent of Malaysia’s small businesses managed to generate more than 10 percent of their sales via online means in 2019.
While this provides some well needed hopeful news for the SMEs of Malaysia, CPA Australia general manager of external affairs Paul Drum cautioned that past performance is not a guarantee of future success and that these businesses should remain vigilant. Drum expects the small business to have little margin for error during the crisis. He also mentions that SME survival will depend on prudent management that focuses on the changing needs of customers and a greater adoption of technology. These will also serve as important factors for the recovery process post-crisis.
“The business you had before this pandemic hit will not be the same as the business you have after the pandemic abates and economic activity recovers. Small business owners face the challenge of adapting their businesses to ‘a new normal’ at a time when finances are tight, although stimulus measures by the government are easing that particular challenge,” said Drum.
The survey results also show that Malaysian SMEs are heavily customer focused. While it is wise to focus on cash flow and financial health at this time, Drum notes that businesses should also be looking to how they can meet the fast-changing needs of customers, especially through increasing online sales.
“Given that nearly all Malaysian businesses invested in technology in 2019 and that 45.7 percent stated that such investment was already profitable, it looks as if many of Malaysia’s small businesses have the digital capability to expand their online sales in 2020,” Drum added.