 Hai, selamat datang ke Unit 1, Introduction to Small Business. Nama saya Uzairi, Instructor untuk Unit ini. Dalam unit pertama ini, anda akan belajar tentang 1. Definisi Small Business 2. Sementara sektor bisnis. 3. Rol dan kontribusi Small Business. Dan akhirnya, nombor 4. Challenges Facing Small Business 4. Independent and small grocery stores, laundry shops, restaurants, and other business operators that we patronise in our neighbourhood are example of small businesses. So, what is small business? Small business in general is independently owned and operated business establishment. It is not a subsidiary of larger business entities and most of the time the manager and the business owner is the same person. Many small businesses are also run by families. A small business may popular in its local neighbourhood but not dominant in its business sector at a larger area such as at country level. Small business also sometimes refers to Small and Medium Enterprises or SMEs. The definition of SMEs is made based on the size of business operation. However, the criteria may differ from country to country. In Malaysia, a business entity is considered as an SME if it meets one of the following criteria whichever is lower. The first one is the amount of sales turnover and the other one is the number of full-time employees. Based on this criteria, SMEs in Malaysia are defined according to their nature of business. In manufacturing sector, a business that have sales turnover below than 50 million ringgit or have fewer than 200 full-time employees is considered as an SME. In service or other sectors, an SME must have sales turnover not exceeding 20 million ringgit or have full-time employees not exceeding 75 workers. A detailed definition of SMEs by the size of operation are shown in the figure. A business is considered as micro-business when the sales turnover is less than 300,000 ringgit or have less than 5 full-time employees whichever is lower. This definition is applicable across all business sector. In manufacturing sector, a business is considered as a small business when it has sales turnover between 300,000 ringgit to less than 15 million ringgit or has full-time employees between 5 to 74 workers whichever is lower. A medium-sized business in manufacturing sector has sales turnover between 15 million ringgit or less than 50 million ringgit or has full-time employees between 75 to 199 workers whichever is lower. In service or other sector, a small-sized business has sales turnover between 300,000 ringgit to less than 3 million ringgit or has full-time employees between 5 to 29 workers whichever is lower. A business is considered as a medium-sized business when it has sales turnover of 3 million ringgit to less than 20 million ringgit or full-time employees between 30 to 75 workers whichever is lower. Take note that small business in the definition is referring to the size of business operation while small business management use throughout discourse refers to SMEs as a whole. As mentioned earlier, the definitions of SMEs in Malaysia is made according to the business sector. Therefore, we must also establish the definitions of type of business sector. There are three categories of business sector that is used to define SMEs in Malaysia. The first one is manufacturer. Manufacturing refers to business sector in which a transformation of material or components into new products is taken place either by physical or chemical transformation. Companies that manufacture furniture, automotive parts, fertilizers and other products are considered as manufacturing companies. Meanwhile, businesses that involve in service industry such as hotels, mobile phone operators private tuition centers, banks and logistics companies are categorized as being involved in service sector. The third sector is categorized as other business sector consists of three main sectors which is primary agriculture construction cleaning and quarrying. Here, primary agriculture includes businesses that involve in the productions of crops and livestock forestry and logging and fishing and aquaculture. Despite its size, small businesses play an important role and have significant contributions. Among contributions of small businesses is in the development of economy. In the context of Malaysia, SMEs contribute more than 35% of Malaysian total gross domestic product or GDP. Besides, more than 17% of Malaysia total export came from SMEs. In addition, SMEs also contributes through the creation of job opportunities. In Malaysia, Malaysian SMEs employ about 6.6 million workers in 2050 or about 65.5% of total employment in Malaysia. Small business also create competitive business environment with more than 90% of total establishment in this country is in the form of SMEs. It establish an environment in which businesses regardless of their size need compete. This competition will create a healthy business climate. Large companies such as multinational corporation also needs SMEs to support their business activities. Many suppliers and vendors of large corporation are in the form of SMEs. In addition, small business also encourage innovation. Because of its size, small businesses are more flexible and can adapt to changes in market or technology faster than larger corporations. In order to respond to the change, they will create new ideas, processes or services and this will lead to new innovation. Besides, SMEs also play a significant role in reducing poverty especially in developing countries. Through involvement in business, low income household are able to be financially sustainable and at the same time create job opportunities to others. Eventually, this will lead to the transformations of community. Although the number of SMEs is growing, it does not mean small business do not have any challenges. There are some significant challenges for being small business. The first one is lack of resource, especially financial resource. Most of small business cannot compete or expand due to financing problem. From the point of view of vendors such as banks, SMEs are riskier compared to larger enterprises. Therefore, SMEs are more likely to face difficulties in raising money. Other than that, other resources that may hinder SMEs are technology, skill labour and market access. Because of its size, small businesses do not have the capacity to buy or produce in large quantity compared to larger corporations. Therefore, they are at disadvantage of not being able to get economies of skills. In addition to the large corporations, there are huge number of SMEs that might compete with a small business within a market. Furthermore, the advancement of globalization have made competition stiffer and challenge their ability to survive. For more details on SMEs in the context of Malaysia, you can refer to the website shown in this video. You also may refer to other source of information both printed and online. That's all for Unit 1 Introduction to Small Business. Thank you for watching.