Academy of Entrepreneurship Journal (Print ISSN: 1087-9595; Online ISSN: 1528-2686)

Research Article: 2021 Vol: 27 Issue: 3

Business Recovery of Small Business Affected By Flood Disaster in Kelantan Malaysia

Siti Nurulaini Azmi, Universiti Malaysia Kelantan

Mohd Rafi bin Yaacob, Universiti Malaysia Kelantan

Muhammad Khalique, Universiti Malaysia Kelantan and Mirpur University of Science and Technology

Khushbakht Hina, National University of Modern languages Islamabad

Noorshella Che Nawi, Universiti Malaysia Kelantan


The main objective of this study was to display the data on the effect of direct and indirect effect of flood on small business in Kelantan Malaysia. To achieve the selected objective of this study, primary data were collected through structured survey form. A purposive sampling technique was used to select the sample size of the research. In this study, 380 samples were used for the purpose of data analysis. Statistical Package for Social Sciences (SPSS) version 23 was use to conduct the descriptive analysis of the selected study. In addition, the gathered data has the possible to re-analyse for full empirical research relating to post flood disaster recovery of small business in Kelantan Malaysia.


Post Disaster, Flood, Direct Effect, Indirect Effect, Small Business, Malaysia.


Small business plays a very important contribution in the development and growth of Malaysian economy. In Malaysia approximately 95% business units are based on small and medium scale businesses. Kelantan is one of the most importantstates of Malaysia having plenty of natural resources and human capital with entrepreneurial mind-set. Despite the competitive edge this state is mostly hit by natural disaster for example in 2014 many small business were closed due to the flood. Few small businesses were able to recover their business. The data of small businesses are very important to examine the business recovery. In this research, the data is very crucial to comprehend the effect of direct and indirect impact of disaster and business recovery of small business in Kelantan Malaysia. In contemporary business environment organizational resilience is recognized as one of the most vital assets for the success and sustainability of the business recovery of small business in every sector in the world (Khalique, et al., 2020). There is great need to explore the direct and indirect effect of disaster on small business and their business recovery potentials. This study is very useful to the research community to examine the post effect of flood disaster on the business performance of small business.

Literature Review

This is a comprehensive study accessible for examining the influence of disaster on the business recovery of small business in Kelantan Malaysia. This is very useful for potential researchers who intend to execute comparative research related to flood disaster and its impact on the business recovery in other small business operating in emerging or developed economies around the world. This study is also valuable for future researchers to conduct their studies in others sectors such as manufacturing, agriculture and services sectors. This study is beneficial for investigators who intend to reprocess or reanalyse it to examine the likely association between the direct and indirect effect of flood disaster and business recovery of small business in developing economies.

This study required to expose various avenues to understand the effect of flood disaster on the business recovery of small business in Kelantan Malaysia. This study attempt to examine the comparative impact of post flood disaster in respect of direct and indirect effect on business recovery (Asgary, Azimi, & Anjum, 2013). In addition, the study can be used to examine the impact of post flood effect on ethnicity background, education and income basis also.

Research Methodology

In this study a structured survey method was used to collect the from 380 small business owners from different area of Kelantan Malaysia. A purposive sampling technique was used to pick the targeted respondents. A structured survey form was employed to grab the perception of the respondents about the constructs. The structured survey form consists of two sections namely demographic profile and employed constructs. Regarding demographic information there were three parts for demographic information, which are the general information of the owner/manager, the company profile, and the past-disaster experience. All items of the demographic survey were adapted and adopted from various resources and scholars (Asgary, et al., 2012; Runyan, 2006; SME Corporation, 2015). Furthermore, the determinant-choice question type of scale was used for this part, which is respondents have to choose and select only one from the several possible options given in the measurement (Zikmund, et al., 2013). Table 1 shows the items in Part A of the questionnaires survey form.

Table 1
Demographic Profile of Respondents and their Business (n=380)
Item Frequency Percentage
Male 249 65.5
Female 131 34.5
Total 380 100
Malay 232 61.1
Chinese 143 37.6
Indian 3 0.8
Others 2 0.5
Total 380 100
Marital Status    
Married 350 92.1
Single Mother/Father 14 3.7
Unmarried 16 4.2
Total 380 100
Types of Industry    
Agriculture 8 2.1
Retail 155 40.8
Wholesale 88 23.2
Manufacturing 44 11.6
Services 74 19.5
Tourism 2 0.5
Education 2 0.5
Transportation 1 0.3
Others 6 1.6
Total 380 100
UPSR 13 3.4
PMR/SRP 27 7.1
STPM/Diploma 76 20
Degree 47 12.4
Master and Above 8 2.1
Others 11 2.9
Total 380 100
My income only comes from this business 320 84.2
My income domes from this business and others 60 15.8
Total 380 100
Ownership Status (Premise)    
Rent 286 75.3
Own 94 24.7
Total 380 100
District of business    
Pasir Mas 66 17.4
Kota Bharu 193 50.8
Kuala Krai 1 0.3
Tumpat 93 24.5
Tanah Merah 21 5.5
Jeli 6 1.6
Total 380 100
Types of Business    
Small Enterprise 364 95.8
Medium Enterprise 16 4.2
Total 380 100
Business Hit by Flood    
Yes 380 100
How Many Times Hit Flood    
1-5 times 230 60.5
6-10 times 69 18.2
11-15 times 33 8.7
16-20 times 24 6.3
more than 20 times 24 6.3
Total 380 100


Part B, the disaster impacts consist of direct impacts and indirect impacts. The direct impacts involve two dimensions, which are the external/environmental impacts (5 items) and physical impacts (6 items). The measurement of the disaster was adapted and adopted from (Asgary et al., 2013; Brown, Stevenson, Giovinazzi, Seville, & Vargo, 2015; Kachali et al., 2015). The items, as shown in Table 2, Table 3, Table 4 and Table 5 for the direct and indirect impacts.

Table 2
Measurement Items of External/Environmental Impacts (direct impacts) (n=380)
No Items 1 2 3 4 5
1 Damage to local neighbourhood 51 69 95 103 62
2 Difficulty accessing premises/site 44 70 82 116 68
3 Damage to the ground surface 39 73 79 135 54
4 Damage to or closure of adjacent organizations of buildings 49 61 97 128 45
5 Damage to roads and bridges 40 75 105 115 45

Table 3
Measurement Items of Physical Impacts (direct impacts) (n=380)
No Items 1 2 3 4 5
1 Damage to roads and bridges 62 67 81 103 67
2 Non-structural damage (fittings etc.) 58 73 74 115 60
3 Damage to inventory or stock 54 72 72 126 56
4 Difficulty accessing IT data 62 59 85 119 54
5 Office equipment loss or damage 55 70 68 114 73
6 Machinery loss or damage 40 28 79 177 66

Table 4
Measurement Items of Human and Organizational Impacts (indirect impacts)(n=380)
No Items 1 2 3 4 5
1 Customer Issues 34 101 98 90 57
2 Changes in staff well being 16 102 134 82 46
3 Perceptions of building safety 49 102 107 83 39
4 Health and safety issues of staff 43 76 127 80 54
5 Supplier issues 48 83 111 80 58
6 Availability of staff 0 6 77 167 130

Table 5
Measurement Items of for Loss of Utility Impacts (indirect impacts) (n=380)
No Items 1 2 3 4 5
1 Electricity 8 21 67 154 130
2 Water  3 20 74 160 123
3 Transportation 2 16 67 186 109
4 Internet 3 16 66 177 118
5 Communications and roads 0 19 79 179 103
6 Gas 0 19 71 168 122

Discussion & Conclusion

This study is very valuable when it analysed by using inferential statistical analysis to examine the effect of the direct and indirect effect on the business recovery of small business in Kelantan Malaysia. Empirical findings of the inferential statistics are useable to increase entrepreneurs and policymakers mindfulness level expressing the prominence direct and indirect effect in order to increase business recovery of small business in developing economies. Findings of this study are also very useful for researchers, academicians, students, consultants, policymakers and practitioners for their research, practice and reference. This research adds contribution in prevailing knowledge of business recovery and the business resilience of small business in Kelantan Malaysia and other developing economies.

Limitations and Future Recommendations

In-spite of the significant contribution this study has some shortcomings. The data is cross sectional in nature and only descriptive analysis was performed. This study recommend more holistic and longitudinal studies for potential researchers to do empirical analysis for better understanding the concept of business recovery in affected small businesses


Asgary, A., Anjum, M.I., & Azimi, N. (2012).Disaster recovery and business continuity after the 2010 flood in Pakistan: Case of small businesses. International Journal of Disaster Risk Reduction, 2, 46-56.

Asgary, A., Azimi, N., & Anjum, M.I. (2013). Measuring small businesses disaster resiliency: case of small businesses impacted by the 2010 flood in Pakistan. International Journal of Business Continuity and Risk Management, 4(2), 170-187

Brown, C., Stevenson, J., Giovinazzi, S., Seville, E., & Vargo, J. (2015). Factors influencing impacts on and recovery trends of organisations: evidence from the 2010/2011 Canterbury earthquakes. International Journal of Disaster Risk Reduction, 14, 56-72.

Kachali, H., Whitman, Z.R., Stevenson, J.R., Vargo, J., Seville, E., & Wilson, T. (2015). Industry sector recovery following the Canterbury earthquakes. International Journal of Disaster Risk Reduction12, 42-52.

Khalique, M., Hina, K., Ramayah, T., & Shaari, J.A.N.B. (2020). Intellectual capital in tourism SMEs in Azad Jammu and Kashmir, Pakistan. Journal of Intellectual Capital, 21(2), 333-355.

Runyan, R.C. (2006). Small business in the face of crisis: identifying barriers to recovery from a natural disaster 1. Journal of Contingencies and crisis management14(1), 12-26.

SME Corporation, M. (2015). SMEs are important economic agents for Malaysia’s growth

Zikmund, W.G., Carr, J.C., & Griffin, M. (2013). Business Research Methods (Book Only). Cengage Learning.

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