Sole Proprietorship

If you want to start a business, be sure to understand the type of business registrations available in Malaysia. Sole Proprietorship is one of the business registrations available. What is Sole Proprietorship? Let us have a look at the variable meanings.

There is a long list of explanation available but here is a few descriptions:

Sole proprietorship is the most simple form of business registration in Malaysia.

There is only one owner but there might be many employees to run the business together. You should understand the advantages and disadvantages before you proceed with your registration to make sure you fully understand sole proprietorship. There is no way you want to jump into business without proper research.

Advantages:

  • You have the freedom to make decision for your business.
  • All profits will be your own personal income.
  • You don’t have to appoint your own accountant to keep your account record.
  • When it comes to tax, you only need to pay personal income tax and not business tax.

Disadvantages:

  • You will carry all the responsibility for your debts and risks in the business.
  • Your personal property will also be your business property. That means your liability is unlimited.

Whether you want to start your own design business, sewing business or hosting business, you can register for sole proprietorship before you start your business. It is very important to make sure you register your business before you commence the business to avoid penalty (usually RM 50).

To find out how you can register your sole proprietorship online, refer to Malaysia.gov.my for details.

Starting a Business While Still Working Full Time

Starting a business may likely be a better track for you to achieve financial freedom than staying in your current full time (read dead end) job. However, only few out there have the courage to ditch their day time job and plunge into the business world right away. Just think of the financial obligations you’re shouldering now and imagine the chaos and the whatnot if suddenly the business you embarked on hit a bumpy ride.

If the fear of venturing the business on full time basis is hampering your goal to build a successful business, there is one, less risky way to go about it. The solution is simply to nurture the business while you’re still employed, working for other people. It sounds like a pretty viable choice considering you can benefit from the gain of the both worlds. Also, your steady income as a worker can be the cavalry and may just be able to prevent apocalypse when your business appears to be sinking.

In addition to this, with a back up income, you have the advantage to continually fine tune your business until it hits the right track and once it does, you can safely look forward to tendering your resignation and focus on your business full time. If you are good in identifying business opportunities that can leverage on other people’s time and skills, then you can minimize your involvement in daily operation, and you’re well on your way to reaching your end goals.

While growing your business and at the same time working as an employee sounds like a marriage made in heaven, the undertaking does not come without its own problems and risks.

One scenario that frequently occurs whenever an employee starts a business while being employed is this: every time they face problem, the tendency to quit the business altogether is so great that the likelihood of them going out of the business becomes very real. You don’t want to make the same mistake like those folks who ambitiously kick start their business and eventually end up going back to where they are most comfortable at, which is their 9 to 5 job.

In the Cashflow Quadrant book, the author Robert Kiyosaki divided the business world and employment world into two different quadrants – the right quadrant and the left quadrant. Someone in the working world is categorized into the left quadrant and another who owns a business belongs to the right quadrant. Each quadrant requires a completely different mindset and you can’t simply solve a problem in the right quadrant while still thinking as if you’re in the left. Make no mistake about it.

Weigh up all the options, the pros and the cons, and draw a plan how you’re going to begin your business, be it on full time basis or part time while you’re still working for other people.

How to Open a Restaurant

Opening a restaurant is the pipe dream of many people who think they can make it with a clutch of their grandmother’s precious recipes, or a unique concept.

And it is no longer only the dream of retirees who think a restaurant is the best investment to for their EPF savings; more and more young people want to jump onto the bandwagon as well.

Thanks to the popularity of food shows, being a restaurateur or chef is now cool.

But heartache and financial disaster await the unwary. The reality of the food and beverage industry is that “for every restaurant that opens, another closes”, says hospitality consultant Jean-Michel Fraisse of HTC in Asia, who is running a three-day workshop on How To Open Your Own Restaurant from Nov 6-8 in Kuala Lumpur.

This unique course, first drawn up for an education programme for the University of Toulouse, is being adapted for Malaysia.

“Many people have a romantic idea of running a restaurant and are not aware of the inherent pitfalls of going into the business without proper planning. This course is designed to bring the reality home,” he says.

In a career that spans two decades, Fraisse has held various positions in the F&B industry including that of executive chef and lecturer in France and Asia.

The former director of the School of Hospitality and Tourism of Taylors College in Kuala Lumpur holds a Master of Science degree in Hotel, Tourism and Spa Management and has operated several restaurant and catering businesses. He draws his case studies from his experiences.

“People are just not prepared enough to succeed in the business,” stresses Fraisse. “You have to be a professional but that doesn’t guarantee success. The most successful restaurant operators seem to be the non-professionals as they are more creative and are able to think out of the box. The professionally trained operators may have the technical skills but sometimes they may be too afraid to try something new.”

In his opinion, many restaurant failures stem from ignorance of accounting.

“You need to be good in cost analysis,” says Fraisse. “Many restaurant owners don’t even know how to calculate the break-even point of the business.

“The break-even point is the ABC of the restaurant business,” he stresses. “Each business has a different equation, and if you don’t know basic accounting, you can’t do the calculation.”

Fraisse points out, however, that only simple arithmetics is required to run a restaurant business.

“It is not at all difficult to learn to do the simple accounting needed to manage a restaurant,” he says. “In fact, you can learn it in two hours — if I show you how!”

One of the mistakes made by restaurateurs is to price their products (menu) based on guesswork, says Fraisse.

“You are taking a big risk when you use such an arbitrary method to do your pricing; under-pricing or over-pricing your products will have a negative impact on the business and cause it to lose its com-petitiveness.”

He also cautions against basing pricing on so-called “industry norms” as the same formula does not work everywhere.

“The right formula is the one that provides a palatable price for the market and a decent profit for the company,” says Fraisse, who will give the participants of his workshop the formulas to calculate the selling price of each item on the menu.

The first day of the course covers restaurant concepts and trends, citing success and failure stories, and explains the complexity of licensing requirements in Kuala Lumpur and current rental rates for prime properties in the Klang Valley which are based on a survey of 300 F&B establishments in the Klang Valley.

Music copyright tariffs, EPF and Socso requirements, employment letter and insurance coverage — some of the vital bits of information that a would-be restaurant operator will need to know — are also touched on.

Interestingly, the course also covers the psychology of the eating habits of the people besides menu planning, the consequences of an ineffective menu, kitchen planning, equipment needs and working out the bottom line

Although the three-day course may not cover everything you want to know about opening a restaurant, it covers the essentials and gives a novice the necessary direction as to where to begin. Past participants have praised the course, which Fraisse tries to run once a year, as being practical, useful and empowering.

Patrick Teo, who attended the first workshop, said he came to the workshop to find out if his business approach was on the right track. Teo had quit his job as a tax consultant to pursue his ambition of owning a restaurant.

“I find the course most useful as Fraisse is very experienced and practical. The course content is also very relevant. Having gone through the course, I can say this course is a must for those intending to go into the restaurant business.

“Of course I have done my own research and the necessary reading before this, but books only gave me the theoretical knowledge. Most books on the subject are general and do not consider the Malaysian business environment.

“Fraisse’s course gave me instant working knowledge of the restaurant business. I already had a business concept before attending the course but I dared not firm it up; with Fraisse’s tips and teachings, I am better able to make a decision,” said Teo.

For Karen Gan, who wanted to open an Argentinian beef grillhouse, the course has given her the big picture of the business.

“When you have passion, you tend to have tunnel vision. The course has been very good for me as I have a concept but no experience in the business. The course has helped put me in the right direction and helped me to see if I am ready for this commitment. I need to rethink my business plan now that I know the scientific approach to arrive at my pricing and the bottom line.”

o For course registration and enquiries, call (03) 2026 9188 or e-mail: professional@htcinasia.com

Source: The Star

How to Choose the Right Franchise

How to choose the right franchise for you

Making the decision to purchase a franchise is the easy part. Now you have to choose from the thousands of successful franchise options in front of you. It can be difficult to narrow down what is the best investment for you but there are several steps you can take to ensure you make the right decision for your present and your future.

There are resources and professionals such as franchise consultants that can help you narrow down your search but ultimately you are the only person who knows the answer to this question.

A franchise consultant will let you in on the fastest growing franchises that have not yet caught on with the mainstream public and they can help you find franchises that are extremely profitable as well. The problem with this method of decision making is you are not considering your own personal interests.

As a business owner the first thing you think you should consider is profit margin and popularity within the brand name. Of course these two factors are important but you will find it hard to make your chosen franchise successful if you are not interested in the field.

The average person today hates their job and the beauty of being a franchise owner is you are in charge of what your future career will be. It would make no sense to purchase a pet store franchise if you hate pets just because it is successful.

Today’s retail industry is made up of thousands of different franchises and what this means for you is you are more likely to find a career you love than be forced to buy something your heart is not in. It is best to narrow your options down to two different industries. From here you can view your options more closely and create the pro and con list to help you make the final decision.

One last important factor to consider before making your final decision is popularity does not always mean the franchise is profitable. Just because you see the franchise on every corner or on TV commercials a dozen times a day does not mean this is the right franchise for you. You want to take a look at the business model of the franchises you are considering and look closely.

Don’t allow yourself to get caught up in a fad because as you know fads don’t last; you should be looking towards the long term not the short term. Delayed gratification is the name of the franchising game.

Once you have looked at the business models and had meetings with the franchise consultants representing your top considerations you can make an informed decision. Your new career has just begun! Now you can meet with those in charge of selling you the franchise and ask as many questions as you can think of.

Asking questions is the key to ensuring you have made the right decision. It is not easy to turn back after you own a franchise and you don’t want to make a mistake right from the beginning. Take your time and do not let anyone rush you into a decision you are not comfortable with.

The best thing to remember when you are “franchise shopping” is that you are in the driver’s seat. You can walk away from a deal at any time, so take control of your business future today!