How To Start A New Business and Esential of Traits

There are three methods to starting a new business which is sole proprietorship, partnership and limited company.

1) Sole Proprietorship

• Can be registered under Business Registration Act 1956. Biz is owned by a single individual. Most businesses in Malaysia are registered as Sole Proprietorship. From aspect of law there is no differentiation between the owner & his biz.
• Registration: at the Registrar of Business at the office of Commission of Companies Malaysia (CCM) or at any of CCM branches.  
• Fill up “Form A”, pay RM30 if the biz use your own name as in Identification Card (if use other name, pay RM60). If registration is approved you will be given certificate called “Form D”. Renewal fee, RM30 per year.
• Advantages of sole proprietorship are :

1. Cheap, easy to create & easy to close down. Very lenient & does not have to comply with a lot of rules.
2. Freedom in control; absolute power in actions & decision making.
3. Prompt & fast decision making.
4. Confidentiality assured.
5. Profits are for the owner -no need to distribute.
6. Not subjected to corporate tax.

• Disadvantages of sole proprietorship are :

1. Difficult to get capital & loans.
2. Unlimited liability (not limited to biz assets but also the owner’s personal assets)
3. Heavy work load.
4. Business continuity is not guaranteed (if owner die or retire, sole proprietorship is dissolved)
5. Limited skill & capability (managing the biz alone)

2) Partnership

• Membership between 2 - 20 persons. Registered under Business Registration Act 1956. (RM60, Form A).
• Members must make agreement (Partnership Deed) to operate a biz in the form a partnership. Any changes to agreement, must inform CCM by using Form B with a fee of RM30.
• Agreement can be unwritten, but for future reference in case of dispute in the partnership, written agreement is recommend. Details of the agreement as shown below :

1. Date, names & addresses of members
2. Nature of biz, name & address of the biz.
3. Period of deed & members responsibilities 
4.  Contribution of capital for investment & way to appropriate/distribute profit/loss.
5. Accounting procedure, salary & limitation of members spending 
6. Restriction (if any) to any members.
7. Way to dissolve the partnership.

• Partnership is run by a committee consisting of:

1. Manager
2. Assistant Manager
3. Secretary
4. Treasurer

• Members of this committee are responsible for the operation of the business, - be paid salaries in accordance to the biz performance.
• Advantages of Partnership are :

1. Easier & quite cheap to register. 
2. More capital can be derived from members (max 20).
3. Responsibilities can be spread among members.
4. More ideas, capabilities & skills from pool of members.

• Disadvantages of Partnership are :

1. Unlimited business liability.
2. Profit has to be shared among other members.
3. Partnership life is not guaranteed should a partner or member passed-away.
4. Growth potential is limited to capital from 20 members.
5. Conflict always happen between partners.

3) Limited Company

• Under the jurisdiction of Companies Act 1965. min 2 & max 50 people. Can be divided as following types:

1.      Limited Company by Shares – member’s liabilities are limited to unpaid shares owned. Once paid no more liabilities. Can be divided into two categories:-1) Private Limited Company & 2) Public Limited Company.

2.      Limited Company by Guarantee – member’s liabilities are limited to amount guaranteed should there be any loss and dissolution.

3.      Unlimited Company – unlimited liabilities as those of partnership companies, but liabilities will stop after a period of one year from the date he/she leave the company.

• A limited company can be registered with the Registrar of Companies at CCM. If approved, the co. will be given ‘Certificate of Incorporation’ in the form of ‘Form 8’ for Public Limited Co. and ‘Form 9’ for Private Limited Co.

• The characteristics of private limited company as shown below :

1. The law consider that the company & its owners are separate entity.
2. A company has its own; name & address.
3. A company can sue & be sued.
4. A company can own assets under its name.
5. A company will continue its existence even if its owner or founder passed away or leave the company.

• Limited company can divide to private limited company and public limited company.

Private Limited Company

• Must put Sdn Bhd at the end of it’s name.
• Should have at least 2 directors, 1 secretary, the highest authority is Board of Directors led by its Chairman.
• Governs by its constitutions; 1) Memorandum of Association (procedures regarding co’s dealings with outside parties; 2) Article of Association (procedures regarding co’s dealing with parties inside the company)
• Advantages of private limited company are :

1. Business liability is limited to member’s contribution only.
2. Continuity is guaranteed even in the demise of a member.
3. Easier to get loans.
4. Shareholders are protected by laws.
5. Ease of ownership transfers.
6. High potential of growth.
7. Shareholders are not burdened by managerial responsibilities.

• Disadvantages of private limited company are :

1. Difficult to manage and shares cannot be bought through the share market.
2. Lots of taxes example corporate tax, income tax, sales tax.   
3. No information confidentiality.    
4. Founder can loose control of the company.

Public Limited Company

• When a private limited company wants to increase its members to more than 50 persons so that it can raise more capital, it has to change its status to Public Limited Company.
• It has to prepare a ‘Prospectus’ to be advertised to the general public. It has to register with the authority of the share market.
• Under Companies Act 1965; minimum of 7 members. No limitation to how many members
• Advantages of public limited company are :

1. Shares can be bought in share market.
2. Can invite others from the public to buy shares
3. Easier to get capital.

• Disadvantages of public limited company are :

1. Hard to maintain relationship between management and workers, shareholders and management.
2. Too many members, do not know each other.
3. Stringent laws protecting the shareholders (Companies’ Act 1965).
4. Various taxes (corporate tax, income tax, sales tax).

Conclusion

We can said that entrepreneur traits is an important element to enable an entrepreneur to success in their business venture. During the venture there are many severe situation and circumstances that entrepreneur need to face. The traits possess by the entrepreneur will help them to overcome this all trouble and business challenge. Several important or fundamental traits are proactive, networked, open risk taker, observant, visionary, failure is an option, open culture, outcome oriented and team oriented.

There are many way to start a business. We have three way to starting a business here which is starting-up a new business, buy and take over an existing business and buying a franchise business. 3 form of business can be registered in Malaysia which is sole proprietorship, partnership and limited company. This 3 form of business have their own advantage and disadvantage. The entrepreneur should choose the better or appropriate form to ensure future success.

International Successful Entrepreneurs

 

Stan Shih

Stan Shih, founder of Acer returned as chairman in November 2013 with the main objective of the company through a third corporate transformation and return to profitability. Having completed the tasks set for the transition six months, in June 2014, Shih resigned from the post of chairman but remains as Honorary Chairman of Acer.         

Open Culture

''Open Culture '' is a concept by which knowledge should be freely and growth must come from the developing world, change or enrich the work already existing on the basis of partnership and cooperation, without being bound to the rules relating to the protection of the law intellectual property.

Acer Group has an open culture of entrepreneurship. Stan Shih thinks most entrepreneurs will prefer to run his own small business than working for a large company. The key to recruiting entrepreneurs is a management philosophy that respects the independence, coupled with the company's employee ownership. In the company of really effective, each worker must be a shareholder in a big way. Shih often said: "Acer can grow rapidly, from tangible assets of view, is to raise the majority of funds invested by the staff; from the point of view of intangible assets, is highly centripetal force and close colleagues combined strength of the company and colleagues, is the corporate culture. "

Early on, the corporate culture from the edge of Acer founder common belief, though already a consensus among the staff, but there is no comparison system. Acer was founded in the first 10 years, they summed up four point, “Open, level of practice, contribute their wisdom and respect for customers.” Huang Shaohua, vice president, said: "Shih never force you to do anything unless you agree or willing to do."

Shih describe: "Acer is known for the manufacture of computer, are also well known for manufacturing millionaire." Shih said: "Acer starting from collective entrepreneurship to promote employees who shares, there is a very important intention is, I want my colleagues to know, although I was 'leading', but not the boss, I and everyone else are all guys" This is the key of Acer to building trust basis.

Jonney Shih

Jonney Shih is a successful entrepreneur in Taiwan. He was born in Lukang township, Changhua on 12 Angust 1952 from family civil servants. Jonney Shih graduated from Taiwan University Department of Electrical Engineering. He once was Acer vice president, director of computer systems. On 1992, Jonney Shih was leave from Acer with reason bleeding. Then he go to the United States to rest for six months. After he rest and he was returning to Taiwan on November 1992 and joined ASUS officially.

But actually on 1989, have four person Acer engineers under departmant Jonney Shih were plan to started them entrepreneurial. The four person engineers request Jonney Shih leave from Acer and to join and leading them. But Jonney Shih was no leave because at the time Acer was coincided with low tide. So Jonney Shih was subsidize 60% funds to they. On 1992, Acer change loss to profit, Jonney Shih was leave from Acer with reason bleeding. After he rest then he joined to Asus officially.

Team oriented

Jonney Shih is very attach importance to team oriented. From Oxford dictionary, team is meaning a group of people who work together at a particular job and oriented is meaning tailor or adapt something to specified circumstances. Jonney Shih was founding a team to management Asus. The team members were Ted Hsu, M.T. Liao, Wayne Tsiah and T.H. Tung, the four engineers and leader been Jonney Shih. In the team, each person to management different department. But the all decide must been discuss after approval with all team members. Because the team oriented is importance.

But on December 2003, the team was appear something conflict. After then Wayne Tsiah was leave the team and Asus. Jonney Shih was no do anything to impede Wayne Tsiah to leave them although Wayne Tsiah is a talented person and good leader. This is because Jonney Shih know if the team appear something conflict will be bring many trouble such as can’t make a accurate decide.  And now the team only left Jonney Shih, Ted Hsu and T.H. Tung. M.T. Liao was already retirement on 1997.

With leader by Jonney Shih, ASUSTeK Computer Inc. was become a most popular in globe with aspect computer. In addition, Jonney Shih was founding Da Vinci Innovation Lab. Under Da Vinci Innovation Lab. have two group. One group responsible for disruptive innovation, and another group responsible for continuous innovation. Because Jonney Shih know innovation can be divided into undermine innovation and continuous innovation, these two parts have distinct concepts. And Asus EeePC was the successful product research been  Da Vinci Innovation Lab. So this is show the team oriented is important to a leader.

 

David Filo

Filo was born in Wisconsin. At the age of six, he move to Moss Bluff, Louisiana, a suburb of Lake Charles, Louisiana. His graduation is from Houston High school and then he earned a B.S in computer engineering at Tulane University. Filo is estimated to be worth US 3.8 billion, which ranking him to the 580^th richest person around the world.

Networked

Network is a social economy business activities by the like-minded group of entrepreneurs recognize, create, or conduct business opportunities. Filo is founder of Yahoo and is a very successful entrepreneur, he highly show traits of networked. Filo's success story began at Stanford University, where he and Yang involved in a project, create one using computer-aided design computer chips, he found this work is so exciting, he decided to take his own a little vacation. Discard their academic work, they began to spend a lot of time surfing the net. In early 1994, they started their own list posted on the Web, "David and Jerry's Guide website," so that their friends can visit an informal guide to "cool" sites. Later that summer they re-dubbing system Yahoo. By November 1994, 17 million people a day visited the site. By 1998, Internet users of Yahoo  fall into more than million a day rate.

Power of the network will determine new joint ventures or existing business success and survival. It is believed that the potential benefits obtained from the network include better information, new credibility and exchange relations. Networks can also help Filo in obtaining a variety of resources and opportunities for business growth.

By 1999, not only by charging Yahoo advertising space in its pages, it may also involve online retailers make money through special cooperatives. The device, called Yahoo fixed fees and commissions to clients Yahoo guide to any transfer made on their website. Yahoo is also working with MCI and become an Internet service provider and information provider. This indicates that Filo is networked,this traits help him to become a successful entrepreneur. With the entrepreneur traits networked Filo are able to success which highly needed and applied to operate the business by the entrepreneur. 

 

Asa Griggs Candler

Asa Griggs Candler born on 30 December 1851 in Villa Rice, Georgia. He was uneducated because The Civil War happened during some of his youth. After the war ended, he did spend some time in high school, but he was anxious to get started in the outside. So that, he left his school and became a trainee from a pharmacy. After few years, he entered into business deals with his partner and had his own company in 1886. In 1888, he had built up one of the largest pharmacy businesses in Atlanta.

Open Risk Taker

Definition: A person who brave to do or make change something that could be dangerous or have a bad result.

Although Asa Griggs Candler had his own business but he still bought the recipes of coca cola from John Pembleton by 2300 dollars because he saw opportunity from this soda drink. Coca cola is the first soda drink in the world and no other product had been marketed before. It is quite challenging because he needed to promote Coca cola to others and not everyone will feel interest on trying new things. In advertisement, he hired salesmen to pass out the coupons for a free Coca cola to let the people try the drink, like it, and buy it later on. Besides that, he also decided to use the word of Coca-Cola by plastering logos on calendars, posters, notebooks and bookmarks as an advertisement to make Coca Cola became a national brand and not a regional brand. So that, he spent enormous sums on coca cola advertising. Although he could not be sure the success rate of Coca Cola, but he still spent a lot of money on it. If he fail, he would lost his money and time but he did not give up. Besides, he also use his knowledge about the pharmacy to add in the Coca cola. He sold the Coca-Cola  as a medicine, claiming it would get rid of fatigue and headaches. It was too difficult to produce a tasty and sweet syrup by combine a soda drink with medicine but he tried his best and became the first successful entrepreneur in soda drink. From this, we can know Asa Griggs Candler is an open risk taker who had courage, innovation and visionary.