How Much Rent Can My Business Afford in Malaysia?

Most business owners work backwards. They find a unit they like, fall in love with it, and then try to make the numbers work.

That's how you end up trapped in a lease you can't afford.

Here's the right way to think about it.

---

The 15% Rule

For most retail and F&B businesses in Malaysia, rent should not exceed 15% of your monthly revenue.

That means if you pay RM 3,000 per month in rent, you need to generate at least RM 20,000 per month in revenue just to stay healthy.

If rent is above 15% of revenue, you are subsidising your landlord's mortgage with your own money every single month.

---

The Formula

Maximum healthy rent = Monthly revenue target × 15%

Or flipped — if you already know the rent:

Minimum monthly revenue needed = Monthly rent ÷ 0.15

Examples:

Monthly Rent	Minimum Revenue Needed
RM 1,500	RM 10,000
RM 3,000	RM 20,000
RM 5,000	RM 33,333
RM 8,000	RM 53,333
RM 12,000	RM 80,000

---

Then Convert to Daily Customers

Revenue targets are abstract. Daily customers are real.

Customers per day = Monthly revenue ÷ average transaction ÷ 26 days

For a cafe with RM 3,000 rent and RM 15 average spend:

RM 20,000 ÷ RM 15 ÷ 26 days = 51 customers per day

Now go stand outside that unit on a Tuesday at 2pm and ask yourself honestly: will 51 people walk through that door every single day?

---

What Most People Get Wrong

They confuse turnover with profit.

RM 20,000 revenue at a cafe is not RM 20,000 in your pocket. After food costs (35%), labour (25%), utilities (10%), and rent (15%), you have maybe 15% left — RM 3,000 — before tax.

That is survivable. Not luxurious. Survivable.

The moment rent creeps above 20% of revenue, that margin disappears.

They forget ramp-up time.

Month one, you will not hit your revenue target. Neither will month two. Most F&B businesses take 3 to 6 months to build a regular customer base.

That means you need enough cash to pay rent at zero revenue for at least 3 months. Factor that into what you can actually afford.

---

The Real Question Before Signing

Before you sign any commercial lease in Malaysia, answer these two questions:

1. What is my realistic monthly revenue in month 6 — not month 1?
2. Is the rent below 15% of that number?

If the answer to question 2 is no, negotiate the rent down or find a different location.

---

Check Before You Commit

Zono estimates your daily break-even target based on your rent and business type. Enter the address, your rent, and your average transaction price and get the number in 60 seconds.

Run your free break-even check at zono.my/score →