Factors That Influence the Business Success of Young Entrepreneurs in SMEs In Malaysia

Abstract

This study examines the factors influencing the business success of young entrepreneurs in Small and Medium Enterprises (SMEs) in Malaysia. Despite the growth of SMEs in Malaysia, limited research has specifically focused on young entrepreneurs as a distinct group with unique challenges and capabilities. The study aims to determine the influence of financial literacy, innovation, business networking and entrepreneurial attitude on business success. A quantitative research design was employed. Primary data were collected using a structured questionnaire distributed via Google Forms to 200 young entrepreneurs aged 18-30 operating SMEs in the Klang Valley. The sampling technique applied was simple random sampling. Data were analysed using SPSS version 27 including descriptive statistics, reliability analysis, Spearman correlation and multiple linear regression. The findings indicate that financial literacy is the most significant predictor of business success (β = 0.35, p < 0.001), followed by innovation (β = 0.29, p = 0.002), networking (β = 0.21, p = 0.015), and entrepreneurial attitude (β = 0.18, p = 0.032). The model explains 62% of the variance in business success (R² = 0.62). The results highlight the importance of strengthening financial capability and innovation skills among young entrepreneurs. The study contributes to entrepreneurship literature by focusing specifically on young SME entrepreneurs and offers practical implications for policymakers and support agencies.