AUGUST 7 — Every small business begins with hope. For some, it is the hope of earning a better income. For others, entrepreneurship is a way to support a family, escape unemployment or build a future beyond salaried work.
Yet starting a business and sustaining one are two very different achievements.
Across Malaysia, many entrepreneurs work long hours, promote their products online, respond to customers late at night and carefully manage limited resources. Despite these efforts, some businesses continue to grow while others gradually disappear. This raises an uncomfortable but important question: if entrepreneurs are working equally hard, why do their outcomes differ so greatly?
The simple explanation is often that unsuccessful entrepreneurs lack discipline, financial knowledge or determination. However, this interpretation is incomplete. Hard work certainly matters, but it does not protect a business from rising operating costs, unpredictable demand, digital disruption, supply-chain difficulties or sudden changes in household circumstances.
In an uncertain economy, effort alone may not be enough.
Starting a business is easier than surviving one
Entrepreneurship is frequently promoted as a pathway out of poverty and economic vulnerability. Training programmes teach participants how to prepare products, develop brands, calculate prices and market through social media. Some initiatives also provide equipment, start-up capital or short-term mentoring.
These forms of support are valuable. However, the success of an entrepreneurship programme is sometimes measured by how many businesses were created rather than how many remained sustainable after the programme ended.
A participant who begins selling food, clothing or services may initially appear successful. Sales are being made and money is entering the business. Nevertheless, sales do not necessarily indicate financial stability.
The entrepreneur may not separate business and household finances. Product prices may cover the cost of materials but fail to account for transportation, electricity, packaging and personal labour. Revenue may be used immediately to meet household needs, leaving insufficient capital to purchase the next round of stock.
The business is operating, but it is not yet resilient.
This distinction is especially important for low-income and informal entrepreneurs. Their businesses are often closely connected to household survival. When a child becomes ill, a vehicle requires repair or the cost of essential goods increases, business capital may become the household’s emergency fund.
Unlike larger companies, microenterprises usually have limited financial buffers. A relatively small disruption can therefore threaten both the business and the family depending on it.
Financial literacy matters — but it is not the whole answer
Financial literacy is an essential entrepreneurial capability. Business owners need to understand cash flow, costs, pricing, savings and responsible borrowing. Bank Negara Malaysia’s financial-inclusion and financial-literacy strategies appropriately recognise financial capability as an important foundation for resilience and well-being.
However, knowing how to manage money does not automatically ensure a business's survival.
An entrepreneur may keep accurate financial records but still lose customers when consumer preferences change. Another may produce a high-quality product but struggle to access a larger market. A rural entrepreneur may understand digital marketing but face unreliable logistics or limited internet connectivity.
Entrepreneurial survival therefore depends on a wider collection of capabilities.
These include the ability to identify changes in the market, adjust products and prices, use digital platforms effectively, maintain relationships with customers and suppliers, obtain reliable information and make difficult decisions when resources are limited.
It also requires the ability to recover after setbacks.
Survival is a capability
We often discuss entrepreneurial success through visible outcomes such as profit, growth and expansion. Less attention is given to the capabilities that allow entrepreneurs to continue operating during difficult periods.
This can be understood as Entrepreneurial Survival Capability: the combined ability of an entrepreneur to anticipate challenges, adapt to changing conditions, mobilise available resources and sustain the business through uncertainty.
Such capability is not a single personal characteristic. It emerges from several interconnected strengths.
Financial capability enables entrepreneurs to manage limited resources and prepare for disruptions. Adaptive capability helps them change products, prices or business methods when circumstances shift. Digital capability allows them to reach customers and operate within an increasingly technology-driven marketplace.
Social capability is equally important. Entrepreneurs rarely survive entirely by themselves. Family members, customers, suppliers, mentors, community organisations and fellow entrepreneurs can provide information, emotional encouragement, referrals and practical assistance.
Survival is therefore shaped not only by what entrepreneurs know, but also by the support systems they can access.
This is why two entrepreneurs with similar products and equal determination may experience different outcomes. One may have access to mentoring, affordable financing, reliable transportation and a supportive business network. The other may be attempting to solve every problem alone.
Their differences in survival should not automatically be interpreted as differences in effort.
Entrepreneurship programmes must look beyond business creation
If entrepreneurship is to function as a meaningful pathway towards poverty reduction, support cannot end when a business is launched.
Short-term training may help participants begin, but sustainable development requires continued support during the vulnerable stages that follow. Entrepreneurs may need different forms of assistance as their businesses evolve, including advanced training, market access, digital guidance, mentoring and appropriate financing.
Programmes should consequently monitor more than participation and business registration. They should examine whether entrepreneurs remain active, generate stable income, retain customers, build emergency reserves and become less economically vulnerable over time.
The objective should not be to create as many entrepreneurs as possible. It should be to develop entrepreneurs who possess the capabilities and support systems necessary to survive.
This also means recognising that not every difficulty can be solved through individual motivation. Entrepreneurs operate within wider economic environments. Access to infrastructure, financing, childcare, transportation, digital technology and social protection can influence whether a viable business continues or disappears.
Policies that celebrate entrepreneurship without addressing these structural conditions may place too much responsibility on individuals while overlooking the environment in which they are expected to succeed.
Hard work needs an ecosystem
Small entrepreneurs are often praised for their hard work and resilience. They deserve that recognition. But resilience should not mean repeatedly struggling without adequate support.
A sustainable entrepreneurial ecosystem allows effort to produce meaningful progress. It connects entrepreneurs with markets, financing, knowledge, technology and networks. More importantly, it provides them with opportunities to learn and adapt before a temporary setback becomes a permanent closure.
As economic uncertainty continues, the most important question may not be how many people are willing to become entrepreneurs. Malaysians have never lacked initiative, creativity or determination.
The more important question is whether our entrepreneurship ecosystem enables their hard work to become sustainable.
Because when a business disappears, it does not always mean that its owner failed to work hard enough. Sometimes, it means that determination was present, but the capabilities, resources and support needed for survival were not.
If entrepreneurship is expected to reduce poverty, strengthen communities and create economic mobility, then helping people start businesses is only the beginning. The real measure of success is whether those businesses and the people behind them are equipped to survive what comes next.
* The author is a Research Fellow Post Doctorate at the Ungku Aziz Centre for Development Studies (UAC), Universiti Malaya, and can be reached at [email protected]
