The Influence of Business Capital, Changes in the Business ...ijens.org/Vol_19_I_02/190702-8484-IJBAS-IJENS.pdfPalasah District, Majalengka District, West Java Province has a positive

International Journal of Basic & Applied Sciences IJBAS-IJENS Vol:19 No:02 45

190702-8484- IJBAS-IJENS @ April 2019 IJENS I J E N S

The Influence of Business Capital, Changes in the

Business Environment, Entrepreneurship Character

and Company Performance on Corporations Small

and Medium Enterprises in Palasah Village, Palasah

District, Majalengka Regency,

West Java Province Suyanto

Doctoral Program of Economic Trisakti University – Jakarta

Email : [email protected]

Abstract-- Seeing the journey of small businesses as one of the

parts of the lower classes of society, has a role in national

development, which has prospects to be developed, it is very

necessary to get a better touch of development so that they have

more power to realize their goals, because in reality the sector

those who are very close to small people are still far from

"professionalism" and the continuity of their business is still in

place. Realizing the reality that exists in empowering small

businesses is very much needed, it is necessary to have an

empowerment process that aims to empower the community to

improve their standard of living, optimize local resources as well

as possible, both natural resources and human resources. The

basis of the empowerment process is the experience and

knowledge of the community about its vast and useful existence

and their willingness to be better. Furthermore, the hope of this

empowerment process is the realization of a dignified society and

increasing awareness of their rights and obligations, by adhering

to the rules regarding what is right and what is not, what is

permissible and what cannot be done, including developing

cultured behavior. The development of the number of small-scale

business units over the period of 2012 to 2015 showed an average

growth of 5.41% or grew 1.15 million units annually, from 42.40

million units (2012) to around 44.69 million units in in 2015. Even

though the average growth of small and medium enterprises

(SMEs) is 5.41%, which is slightly smaller than the growth of the

average medium business which reaches 6.64%, but

quantitatively small businesses greatly affect the economic

activities of many people because the amount is 99.8% of all

business people in the country. This research belongs to the type

of Descriptive Studies and analytic quantitative research.

Sampling used the proportionate stratified random sampling

technique with a sample of 488 or 100 populations and data

analysis with simple and multiple linear regression. The business

world that is now starting to develop following its civilization is

expected to be able to answer the challenges of the economy in

society that exist today, because society is a group of human life

that has a different role of diversity and culture in a

development, or follows the flow of times in a community that are

interconnected and mingling with each other, with all activities in

a tolerant manner and with a contradictory relationship that

daily can provide the sentences, as well as providing enthusiastic

applications-adaptations and as well as can minimize a good and

bad actions, and have interpretations the interpretation of

scientific knowledge and towards thinking of prosperity, peace,

and being able to think has a sense of peace and security, in the

solidarity of citizenship, nationality, and state relations, this

opinion was conveyed by Adi Suminto (2017. Pg. 16) Book: Social

Existence on Community Diseases In the Perspective of Human

Rights, says that "Society is an example in history by emphasizing a

process naturally in the character of science (Social) to answer

solving various problems of life". So with that economics is one of

the fractions in character and its social literature as a basis or

mother rather than other sciences. Conclusions: (1) The

Influence of Business Capital has a positive and significant

influence (76.8%) on corporations Small and Medium

Enterprises in Palasah Village, Palasah District, Majalengka

District, West Java Province, Influence of Business Capital is a

reinforcing factor of corporate. Small and Medium Enterprises

corporations in Palasah Village, Palasah District, Majalengka

District, West Java Province, (2) Changes in the Business

Environment for Small and Medium Enterprises corporations in

Palasah Village, Palasah District, Majalengka District, West Java

Province has a positive and significant influence (75.8%), because

Business Environment Change is a reinforcing factor of

corporations Small and Medium Enterprises in Palasah Village,

Palasah District, Majalengka District, West Java Province has a

positive and significant influence (72.2%), The corporations

Small and Medium Enterprises in Palasah Village, Palasah

District Majalengka Regency, West Java Province,

Entrepreneurship Character is the main factor of UKM

corporations in Palasah Village, Palasah District, Majalengka

District, West Java Province, (4) Company Performance of the


Palasah District, Majalengka District, West Java Province has a

positive and significant influence (90,6 %), Company

Performance is a supporting factor of the corporations Small and

Medium Enterprises in Palasah Village, Palasah District,

Majalengka District, West Java Province, (5) Influence of

Business Capital, Changes in Business Environment,

Entrepreneurship Character and Corporate Performance

together have a positive influence and significant (68.2%), for


Palasah District, Majalengka Regency, West Java Province. Key

Words: Business Capital, Changes in the Environment,

Entrepreneurial Character, Company Performance, and Small

and Medium Enterprises Corporations.



CHAPTER I PRELIMINARY

I.1. Background. Business people today must understand the

economic cycle of the region, for example in Palasah Village,

Palasah Sub-District, Majalengka District, West Java

Province, the community knows and recognizes economic

resources for economic sector development and bottom-level

welfare, starting with the creation of community employment

business or corporate business entrepreneurship "PT. Binhara

Inti Nusa" as a form of an individual limited liability company

(PT) with the category of "National Private" company

abbreviated as "PT. BIN" in order to build civilization in

people's welfare in the area of regional economy in

strengthening national resilience by realizing lower level

sectoral welfare. Basic suitability of Law Number 40 of 2007

concerning Limited Liability Companies. This company is PT.

Binhara Inti Nusa has a program in its vision and mission

including: 1. Creating jobs 2. Reducing unemployment 3.

Alleviating poverty 4. Realizing prosperity in the pillars of

national security 5. Building the people's economy. The five

programs owned by this company will be able to break the

spirit of business people / entrepreneurship in other limited

liability companies, to be able to practice social change,

develop civilization development work and work on the

pattern of each field that will be cultivated as the contact's

main goal itself. In principle, there are 3 conditions for

establishing a Limited Liability Company (PT) as stipulated in

Law No. 40 of 2007 concerning Limited Liability Company

(UUPT): First about the founders; second, about the basis of

establishment; and third, about capital. The description is as

follows: A. About the Founder. Limited Company (PT) must

be established by at least 2 people, and made by notary deed in

Indonesian. Because basically, the Company is established

based on an agreement, so that it must have more than 1 (one)

shareholder / founder. The definition of "person" here, is an

individual, both Indonesian and foreign citizens or an

Indonesian or foreign legal entity (see Explanation of Article 7

paragraph 1 of the Company Law). If the conditions of the two

people are not fulfilled, it will result in changes in the

responsibility of the company, which in fact is limited to

unlimited liability. This means that all commitments and

losses of PT are the responsibility of the founder personally.

B. About the Foundation. Limited Liability Company (PT)

must be established with an authentic deed before a notary.

This authentic deed contains the Articles of Association and

other information relating to the establishment of PT (see

Article 8 of the PT Law), and must be approved as a legal

entity from the Minister of Law and Human Rights, then must

be registered in the company list to the relevant department as

stipulated in Law No. 3 of 1982 concerning the Obligatory

Registration of Companies Jo Article 29 Paragraphs 1 to 6 of

the Company Law. C. About Capital. Based on Article 32

Paragraph 1, the Limited Liability Company (PT) Limited

Liability Company Law is Rp. 50,000,000 (fifty million

rupiah). But since the issuance of Government Regulation No.

29 of 2016 concerning Amendments to the Limited Liability

Company, the minimum authorized capital of the limited

liability company (PT) is deviated so that there is no minimum

authorized capital limited liability company (PT). So the

matter of the amount of authorized capital (PT), submitted to

the agreement of the parties (Founder of Limited Liability

Company) want to enter any capital, which is stated in the

Deed of Establishment of Limited Liability Company (see

Article 1 Paragraph 2 and 3 PP No. 29/2016). Examples of

Limited Liability Companies (PT. Binhara Inti Nusa). This

limited liability company was established on the 27th of

December of 2011 and received approval from the Minister of

Law and Human Rights of the Republic of Indonesia Number

AHU - 0010868.AH.01.09. 2012. On February 8, 2012. With

the classification of businesses in General Trade, Services,

Development, Transportation and Telecommunications as well

as Export and Import. As well as opening a branch office in

Majalengka Regency, based on the Certificate of Business

Domicile (Managing Director of the Company) Palasah

Village Number: 140/11 / Dec. April 2, 2012 and Registrar of

Palasah District Reg. No. 470/59 / Kec. And Certificate of

Business Domicile (Director of Company Branch) Palasah

Village Number: 140/96 / Des. November 8, 2012 and

Registrar of Palasah District Reg. No. 300/11 / Trantib. And

the Medium Trading Business License (SIUP) as the Head

Office of the Company is approved by the DKI Jakarta UKM

and Trade Cooperative Office Number: 03133 - 02 / PM /

1,824,271. February 28, 2012 Legalization of a Trading

Business License (SIUP) Branch that was approved by

BPPTPM Majalengka Regency Number: 517 / 37-PM.Cab /

II-BPPTPM / 2012. November 7, 2012. Company Registration

Number (TDP) Company Head Office Number:

09.01.1.82.37776. March 8, 2012. Permit for Company

Registration (TDP) as the Company's Branch Office approved

by BPPTPM Majalengka Regency Number: 102318209512.

November 14, 2012. Construction Services Business License

(IUJK) from BPTSP DKI Jakarta Province as Company Head

Office Number: 1-905597-3175-2-00683. May 26, 2015

(having experienced Her Register in 2012, 2013, 2014).

National Construction Services Business License (IUJK-N) as

a Company Branch Office that is approved by the Regent of

Majalengka Regency Number: Kep 018 / 2014-1-083032-

3201-0004. January 16, 2014. Registered Tax Company

NPWP Company Head Office Number: 31,445,531.2-

044,000, while Branch NPWP Number: 31,445,531.2-

438,001. and Disturbance Permit / HO by BPPTPM

Majalengka Regency Number: 536 / 1160.SK-IG / XI-

BPPTPM / 2012. November 14, 2012. Registered Majalengka

Regency Chamber of Commerce and Industry (KADIN)

Number: 20120-14000119 National Register Number: 140227

-005634. February 26, 2014. And KADIN as the Company's

Head Office Number: 20205-12094585 / 8-8-2012 National

Register Number: 150622-018290. July 31, 2015. The basics

of the permit are a sign of the official legality of a limited

liability company PT. Binhara Inti Nusa located in Palasah

Village, Palasah District, Majalengka Regency, West Java

Province, as a Branch Office of PT. Binhara Inti Nusa located

in the Unitary State of the Republic of Indonesia. Indonesia

needs many entrepreneurs to build economic strength and



improve people's welfare. To deal with the free market in

2010, entrepreneurs are expected to be able to strengthen the

national economic pillars (Media Indonesia, 2007). Seeing the

journey of small businesses as one of the parts of the lower

classes of society, has a role in national development, which

has prospects to be developed, it is necessary to get a better

touch of development so that they have more power to realize

their goals, because in reality the sector who is very close to

this little person is still far from "professionalism" and the

continuity of his business is still stagnant.

I.2. Identification of problems. Based on the background of

the problem, some problems can be identified, including: 1.

Changing the dynamic global business environment and the

knowledge capital of the business it runs, entrepreneurs have

not been able to innovate and be creative in order to maintain

their business well. 2. The tendency of productive age in

developing countries to become an employee is still high in

order to fulfill their needs, so that the entrepreneurial spirit is

still low. 3. Government policies that tend to be less

constructive in the regulation of developing business permits

for their citizens. 4. A business environment that is not

conducive, causing entrepreneurs to feel unenthusiastic and

less innovative in developing their business, so that the

production of entrepreneurial activities cannot be distributed

to the community of service users / goods, this has an impact

on business continuity. 5. The weak implementation of related

institutions to trigger the ability to find the best solutions is

influenced by the ability to think creatively (creative thinking)

for the executing companion of the success of small and

medium enterprises. 6. Entrepreneurs have not been able to

develop operational dimensions of business capital to achieve

business performance. 7. Entrepreneurs have not been able to

anticipate the operational dimensions of the business

environment to achieve business performance. 8.

Entrepreneurs have not been able to optimize their

entrepreneurial characteristics. 9. Not yet realized the

implementation of government policies in responding to the

challenges of small business competition in order to reduce

dependency on employment opportunities to the government.

10. Business owners have not been able to optimize business

capital, business environment, entrepreneurial character to

improve the company's performance in its business continuity

efforts.

I.3. Scope of problem. The limitation of the problem in this

study is how the study of the effect of business capital,

changes in the business environment, entrepreneurial character

and the performance of the company towards limited liability

small and medium enterprises in Palasah Village, Palasah

District, Majalengka Regency, West Java Province.

I.4. Formulation of the problem. Based on the limitation of the

problem, the problems in this study are formulated as follows:

1. What is the business capital of a small and medium-sized

business limited liability company in Palasah Village, Palasah

District, Majalengka Regency, West Java Province. 2. What is

the change in the business environment of small and medium-

sized business limited liability companies in Palasah Village,

Palasah District, Majalengka District, West Java Province. 3.

What is the entrepreneurial character of a small and medium-

sized limited liability company in Palasah Village, Palasah

District, Majalengka District, West Java Province. 4. How is

the company's performance in small and medium-sized limited

liability companies in Palasah Village, Palasah District,

Majalengka District, West Java Province. 5. How is the

continuity of a small-scale limited liability business in Palasah

Village, Palasah District, Majalengka District, West Java

Province. 6. How big is the influence of business capital,

changes in the business environment, entrepreneurial character

and performance of the company towards limited liability

companies in Palasah Village, Palasah District, Majalengka

Regency, West Java Province, both partially and

simultaneously. 7. How big is the impact of the company's

performance on the sustainability of a small-scale limited

liability business in Palasah Village, Palasah District,

Majalengka Regency, West Java Province.

I.5. Research purposes. The research aims to gain an

understanding based on empirical data regarding the model of

causality relationships between variables: 1. To find out and

examine how the influence of business capital on small and

medium enterprises limited liability companies in Palasah


Province. 2. To find out and examine how the changes in the

business environment of small and medium-sized business

limited liability companies in Palasah Village, Palasah

District, Majalengka Regency, West Java Province. 3. To find

out and examine how the character of entrepreneurship in a

small and medium business limited liability company in

Palasah Village, Palasah District, Majalengka Regency, West

Java Province. 4. To find out and examine how the company's

performance in a small and medium-sized limited liability

company in Palasah Village, Palasah District, Majalengka

Regency, West Java Province. 5. To find out and examine how

the continuity of a small-scale limited liability business in


Java Province. 6. To find out and assess how much the

influence of business capital, changes in the business

environment, entrepreneurial character and the performance of

the company towards limited liability small and medium

enterprises in Palasah Village, Palasah District, Majalengka

Regency, West Java Province. partially or simultaneously. 7.

To find out and assess how much the impact of the company's

performance on the continuity of small-scale business limited


Majalengka Regency, West Java Province.

I.6. Benefits of research

I.6.1. Theoretical benefits

The results of this study are useful for developing a study of

entrepreneurial economic theory that the continuity of small-

scale business limited liability companies in Palasah Village,

Palasah District, Majalengka Regency, West Java Province.

Influenced by the performance of the company and also

influenced by factors influencing business capital, changes in

the business environment, and entrepreneurial character.

I.6.2. Practical benefits. The results of this study are useful to

be developed into entrepreneurship development training



programs for prospective young entrepreneurs. They get the

provision of intensive training on the factors that support

entrepreneurial success. The results of this study will help the

government to provide guidance for entrepreneurs in order to

increase entrepreneurial achievement. The government can

utilize the results of this research by designing entrepreneurial

training and education for potential entrepreneurs in the

Palasah Village, Palasah District, Majalengka District, West

Java Province.

CHAPTER II

LITERATURE REVIEW, THINKING AND HYPOTHESIS

FRAMEWORK

2.1. Literature review

2.1.1. Understanding of Economics. In the category of the

nature of the economy at the level of people's welfare, the

most important review is its understanding, that the meaning

intended in it contains elaboration in the broad and narrow

sense, when the meaning contained in the form itself. This

aspect of meaning has the word "Nature" which is usually

intact in an abstract form which includes the meaning it

contains, for example the meaning is related to the theoretical

relation of the cycle of the economy possessed by the region,

its character, and the potential that exists. Whereas science in

philosophy is a knowledge that is dinalar by human reason, so

that humans can think good and bad with logic, and empirical

evidence in the attitude of its phenomenology. After yesterday

we learned about actions, motives, and economic principles,

we conclude that it is necessary to describe the economics and

its distribution, before we must understand what economics

really is. So, economics is a study of all human behavior that

aims to obtain and manage limited resources. Economics can

also be understood as an attempt to make an alternative goods

or services to satisfy the needs of unlimited human life, the

basic concept of economics is the role of intervention by

various parties including the government and the economic

level of the region itself, to develop a civilization through a

program based on a strategic plan, for example the application

of a network of Transaction and Electronic Information (ITE)

empowerment and so on in regions or regions that have

deceived their technology, technology areas are regions which

subsequently carry out development from a period of

companies in this area, then need to be based on ITE

technology (Information on Electronic Transactions) for the

sake of its smooth operation. 2.1.2. Understanding

Entrepreneurship. Etymologically entrepreneurship is the

equivalent of entrepreneurship, namely things related to

entrepreneurship or entrepreneurship. In Indonesian

Entrepreneurship is a combination of the terms Entrepreneurs

who come from Sanskrit and the word entrepreneurship means

the main, brave, brave, carrying out productive activities, to

produce goods and services for others and gain profits.

The term entrepreneur comes from entrepreneurial French,

which means pursuing opportunities, filling needs through

innovation and running a business. The term entrepreneur was

first introduced by Cantillon around 1755 an Irishman living

in France, in his work "Essai sur la nature du Commerce en

General". Furthermore, in modern terms the term entrepreneur

was reiterated by French economist Say. In Germany, people

translate the term entrepreneur as an unternehmer, who has

both run and run their own business. In English terms it is

called "owner-manager", where the word is generally used to

distinguish the word "Boss" which also has a company with

the word "Professional manager" or with a paid employee

(hired hand). The term entrepreneurship also cannot be

equated with the term capitalism. Smith as the founding figure

of economic theory places capitalism in its function as a

provider of capital. So even if Stuart Mill continues to

understand classical economics firmly separates the function

of entrepreneurship from capitalist functions, the function of

entrepreneurs refers to the description of Contillon is the risk

bearer, or in Schumpeter's opinion those who introduce

innovation.

2.2. Influence of Business Capital. The initial problem faced

by entrepreneurs (entrepreneurs) who are starting a business is

business capital. Business capital is the main source that can

drive business activities to run smoothly. Entrepreneurship

capital has 2 types, namely intangible capital (Suryana, 2006:

5). The limitations of business capital (tangible) will

significantly affect the business space, so that entrepreneurs

cannot yet increase production volume and it is difficult to

expand the market (Alma, 2007: 116). Entrepreneurship

requires adequate business capital, business capital is the

initial capital that supports a person to open an independent

business, such as intellectual, social, moral, mental and

material capital (Suryana, 2006: 5-7). Intellectual capital is

enhanced through education and training that enables actors to

engage in quality in entrepreneurial activities. Appeals about

efforts to improve entrepreneurial capacity driven by

entrepreneurship are indeed interesting to study carefully in

the development of Indonesia in the future. Intellectual capital

in the form of adequate intelligence capacity (smart) will

influence the mindset in the process of problem solving and

decision making. Those who are smart and creative will look

for business opportunities that can bring profit. Social capital

is a capital in the form of the ability to establish relationships

with other people. An entrepreneur seeks to develop

interpersonal competencies, communication skills, skills to

lead and manage his business. They involve relationships with

others who are led and coordinated to realize their business

goals well (Dewanti, 2008: 13). Suryana (2006: 6-7) says

moral capital in the form of competency to develop

personality integrity that can lead to trust in others. Therefore,

an entrepreneur always pays attention to entrepreneurial ethics

such as honesty, integrity, keeping promises, loyalty, fairness,

likes to help others, respecting others, being a good citizen and

law-abiding, pursuing excellence and responsibility. Every

speech, action, behavior and deed in making a business

decision will be based on moral values. According to Hendro

and Chandra (2004: 56) as entrepreneurs who think forward in

the long run, each business decision can be accounted for on

the basis of moral values and does not violate religious

teachings (social norms of society).



2.3. Changes in the Business Environment. Business

environment is dynamic. One factor influences the dynamics

of the business environment, namely the development of

information technology. Progress in information technology

contributes greatly to business people to obtain fast and

accurate information. Various information obtained through

information technology will be an important basis for

consideration in business decision making (Widoatmodjo,

2007: 34). According to Kinichi Ohmae in Widoatmodjo,

(2007: 35-36) changes in the business environment at the local

level are closely related to global business conditions. There

are 4 (four) dimensions globally that also influence the

dynamics of changes in the business environment, namely the

visible dimension, the borderless dimension, the cyber

dimension and the dimension of high multiplus. The visible

dimension is a business dimension that is characterized by the

stability of business people to maintain business space in the

business that has been controlled by the market and the

expertise in producing goods or services. If businesses already

feel well-established in obtaining a market that benefits their

business, then they will keep the business stable. For example,

those who have mastered the marketing of transportation, they

are trying to survive for the transportation sector and have not

considered other businesses. The borderless dimension is a

business dimension that knows no national borders due to the

formation of the WTO (World Trade Organization), a world

trade organization. The WTO influences State policies to

openly accept global markets (Widoatmodjo, 2007: 35).

Various countries can expand their business without

recognizing the boundaries of trade and government. Each

country realizes that trade between countries has entered the

era of globalization which has caused the marketing of a

product or service to have crossed the borders of the state.

Often a country is no longer able to protect domestic business

activities, because foreign businesses can freely compete by

entering domestic marketing (Supomo, 2007: 199-200). For

example Nokia handphone companies from Finland, Europe

dominates hendphone marketing in Indonesia (Robbins &

Couter, 2004, p. 90). The cyber dimension is a dimension of

advancement in communication technology and information

influencing changes in relations between producers and

consumers. Manufacturers can market their products to

consumers through internet media (Widoatmodjo, 2007: 35).

Consumers can also order goods or services through

information technology quickly without any obstacles. When

an agreement has been reached between consumers, the goods

or services are immediately sent to consumers and consumers

can make payments via credit cards (Ladish, Morgan &

Kalliapur, 2001: 83). 2.3.1. Environmental Assessment. The

ability of an entrepreneur to understand and recognize

business opportunities is proportional to the level of his

knowledge of political development, socio-cultural economy

and technology in his environment. Environmental

assessments that provide opportunities and risks are the basis

of opportunity recognition. Environmental research is a mental

exercise because an entrepreneur must do business equipped

with some physical effort. 2.3.2. Political Environment. A

political situation is a measure of the overall investment

situation that applies in a country or state. Prospective

investors must consider positive government actions that have

encouraged private investment. These actions include the

dissemination of free investment policies or unlimited

investment, the existence of investment development centers,

industrial land creation, free trade areas, and the availability of

low-cost loan capital for private investors. An example of a

positive government action taken by the Bangladesh

government is the issuance of an Industrial Investment

Schedule that shows the separation of allocations from small-

scale industrial and small-scale industries and investment

guidelines in Bangladesh to develop and attract industrial

activities. To achieve a balanced development of a country,

the government permits special privileges and tariff

concessions to industries that are located in Bangladesh's

Small and Cottage Industries Corporation (BSCIC), industrial

land, and developing industrial areas selected. Likewise

certain additional facilities, such as the provision of lower

interest rates for export-oriented industries. The government

maintains that facilities and concessions are given to

developed regions and relatively undeveloped areas or poor

areas in the country. 2.3.3. Economic Environment. Critical

assessment of the general state of the economy and its

prospects and providing meaningful information to potential

investors. This information is per capita income, current

national income, availability of credit savings, and income

distribution. The expanding economy means increasing

suitability in the number and extent of industrial, commercial,

agricultural, and service facilities. An analysis of the

economic environment will specifically help investment

decisions, market measurement, and estimate the ability to

recognize the types of patterns of economic growth. Soriano

and Neart in Wirasasmita (1994; 80) emphasize this problem

and argue: "The special interest outside the growth of GNP is

population growth. Usually, this is not considered so that there

is more consumption, less investment, slower growth, low per

capita income, and the income distribution pyramid is more

acute on a broader basis. All of this is critical to the demand

for different types of products and services and several other

environmental aspects. 2.3.4. Technology Environment. New

developments in the field of science and technology continue

to create new industry opportunities. As Kotler said, "Every

new technology is likely to develop a large industry."

Therefore, an entrepreneur must continually examine local

raw materials and existing products for possible utilization and

repairs. For example, Osborn submits a list of questions to

stimulate ideas about changing certain types of products.

2.3.5. Entrepreneurial Characteristics. Sukardi (Lupiyoadi,

2007: 7-9) mentions that there are 9 characteristics of

entrepreneurial behavior in the world, namely; instrumental,

prestative, flexibility, social work, hard work, self-confidence,

risk taking, self-control, innovation, and independence. The

instrumental nature is a trait characterized by the ability to be

observant in utilizing an opportunity in the living environment

to achieve business goals. Interpersonal relations, the presence

of community leaders, and experts in certain fields are always



used to help achieve goals in business. In other words,

everything in its environment is seen as an instrument of

personal purpose. 2.3.6. Characteristics of Entrepreneurship

Indicators. The theory of Zach's Star of Succes is used as a

variable to find out entrepreneurial characteristics, namely

Knowledge dimension, according to Jeff Olson (2004; 52)

found sources of knowledge are three things: Studied

Knowledge, read the development material that has been

written by experts according to your needs. Reading is an

escalator that allows to accelerate your understanding of

humans and the world. Once you have gained understanding

before other people, then that understanding can be a

competitive advantage for you. Activity Knowledge, it is clear

that life is a process, therefore the road to success is always in

a position of being improved. 2.3.7. Business performance.

Performance stands for work energy kinetics, where followers

as human resources have energy, mind, knowledge and skills

that if driven (kinetic) will produce work output. Performance

is a managerial process, the leader carries out functions, tasks,

and all of his potential abilities to create performance in

achieving organizational goals. Wirawan, (2003).

Furthermore, Bernadin & Russell (2002) defines performance

(performance) as a record of the outputs of the functions of a

particular job or activity over a certain period of time or in

other words performance is the level of success in carrying out

tasks as well as the ability to achieve set goals. Hawkins

(1979) performance is the ability of work to express the notion

of performance as follows: "Performance is: (1) the process of

performing, (2) a notable action or achievement, (3) the

performing of a play or other entertainment". In its

implementation, each generic size can be described with

certain guidelines so that it can show the value of each aspect.

In general, the relationship of the four perspectives can be

seen in the figure below.

Image: Relationship of the Four Perspectives

Source: Adi Suminto : 2017 Management Strategic of Admintrations Organization

From the chart, it can be seen that the manager's ability will

influence the production process more efficiently and

qualitatively so that it can satisfy consumers through

appropriate delivery on time delivery times and create

customer loyalty which in turn increases sales growth sales

growth and results in financial aspects of increasing earnings

opinion growth. 2.3.8. Performance Measurement Steps.

Today many companies or organizations examine the size of

their performance because existing performance measures are

considered ineffective. Some company leaders have made

improvements to their efficiency structures with little added

and shifting focus of attention, while other organizations are

refining some of the old performance measurement indicators

by building a series of new size performance indicators. Why

does management need attention focused on performance?

The leaders of the company and their staff have hopes to: 1.

Increase the performance target of the overall organizational

process. 2. More emphasis on employee empowerment and

management systems in accordance with company goals. 3.

Identify and improve performance that is not optimal. 4.

Motivating workers effectively, by providing rewards for the

success of achieving company goals. 2.3.9. Difficulties in

evaluating performance. Many companies do not have a

comprehensive and integrated performance measurement

matrix, while everyone knows how important effective

performance measurement indicators and large resources are

allocated to renew management information systems to

support the effectiveness of work monitoring systems. 2.3.10.

Planning

Consumen

ROCE

Return on Capital

Customer Loyalty

On-Time Delivery

Customer Loyalty Customer Loyalty

Customer Loyalty



Implementation of Performance Evaluation in Small

Industries. Looking at the elements assessed in the balanced

scorecard, then of course the items require accurate data and

documents that can be used as evidence of activities that take

place in a business organization. Thus, it must be admitted that

the concept of balanced scorecard performance measurement

is implemented initially in business organizations that have

applied the standard principles of modern business where in

their operations well-standardized, complete and scheduled

management functions are carried out. The problem is whether

small businesses in Indonesia have met the norms which can

be measured through balance scorecard.

2.4. Framework. The life cycle of an organization is one of

several theories that try to explain why businesses develop and

change over time. The life cycle model is based on the

recommendation that managers can change organizations to

adapt better to their environment in order to have the power to

survive.

Population ecology, The term ecology refers to the

relationship between humans and other living things with air,

soil, and water that support their lives. Wheelen, (2003: 8) is

based on the concept of natural selection in biology. The main

principle is that being an organism is the best choice to survive

in an ever-changing environment, while others die.

Organizational experts make two main assumptions, namely:

1. Organizations have a limited ability to adapt in a changing

environment. 2. The process of change is controlled by nature.

The basic argument is, in an industry, organizational

variations tend to develop because different strategies will

lead to differences in structure and process. Organizations that

are able to adjust well to environmental constraints will

develop well, while others will fail if they cannot. For

organizations that can survive, they tend to grow and become

a dominant part of the industry. Adherents to the theory of

resource dependence focus on the ability of organizations to

obtain important resources in the environment as a

determinant in the survival of their business. Growing up is

easy when the environment is rich in resources (all the

resources needed by the company are fully available) so the

company must appoint people who are responsible for

ensuring important resources that must always interact with

the group of providers through collaboration. Thus only

companies that can maintain continuity of access to resources

that are able to sustain their lives.

2.5. Research Hypothesis

The following are some of the research results that are

relevant to the study's research. Researcher Year Title of

relevant research results : 1 Mochamad Chabachib 2001 Effect

of quality management of member participation and business

environment on the implementation of management and

financial performance of KUD in Central Java The business

environment has a significant effect on company performance,

especially financial performance. 2 Dalimunthe 2003 Effect of

Individual Characteristics, Entrepreneurship, Leadership Style

on Business Capability and Success of Small Weaving and

Embroidery Industry Business in North Sumatra, West

Sumatra and Riau components of internal analysis which is a

series of competencies which then form core competency.

This competency enables small industries to increase business

capacity in an effort to create competitive advantage to

achieve business success. In addition, the Indonesian people

are a nation that has a diversity of cultures that gives birth to a

variety of different patterns of behavior between individuals. 3

Sumarsono 2003 Several factors that influence company

performance and satisfaction of internal stakeholders The most

dominant factors affecting business performance are

intellectual capital and entrepreneurial characteristics. 4

Yurniwati 2003 Effect of business environment and strategic

planning on the performance of manufacturing companies The

business environment influences company performance more

than strategic planning. 5 Anik Tri Sumarni 2004 Effect of

internal environment and macro external environment on

strategic relations and business performance of dairy cattle in

West Java The internal environment and external environment

have a significant effect on business performance belonging to

small and medium enterprises. 6 I Wayan Bagia 2005 The

influence of intellectual capital and job satisfaction on the

performance of district government officials in Bali human

capital has a significant relationship with economic capital.

This means that in the management, development and

supervision of human capital it is necessary to support the

strength of economic capital, so that human potential can be

optimized. 7 Sugito Effendi 2005 Effect of the Human

Resource Management strategy on training and intellectual

capital and its impact on company performance 1. The skills

and expertise of small entrepreneurs through training are not

only based on the experience of entrepreneurs,

2. increasing the entrepreneurial spirit through increasing

knowledge, abilities, and understanding of company vision,

planning, creativity, risk taking, and adaptation. 8 Setyobudi

2005 Analysis of the Effect of Human Capital, Economic

Capital, and Entrepreneurship Spirit on Member Participation,

Business Improvement and Remaining Business Results and

Its Impact on Member Welfare in Jakarta Family Teacher

Cooperatives 1. Business capacity through a strategy of good

linkage competency with suppliers (backward linkages) and

customers (foreward linkages) that can result in improvements

in the operational field; improvement of capital structure by

fostering relationships with capital owners. 2. The government

plays an important role in developing small competency-based

industries through mentoring activities. 9. Adi Suminto 2017.

Strategic Management in the Administration of Organizations

: 1. Management is a category in administrative attitudes to

produce innovative goals in learning performance.

2.6. For Small and Medium Enterprises Limited Liability

Company in Palasah Village, Palasah District, Majalengka

Regency, West Java Province. Entrepreneurship requires

adequate business capital, the influence of business capital is

the initial capital that supports a person to open an

independent business, such as intellectual, social, moral,

mental and material capital. Intellectual capital is enhanced



through education and training that enables actors to engage in

quality in entrepreneurial activities. Intellectual capital in the

form of adequate intelligence capacity (smart) will influence

the mindset in the process of problem solving and decision

making. Social capital is a capital in the form of the ability to

establish relationships with other people. An entrepreneur

seeks to develop interpersonal competencies, communication

skills, skills to lead and manage his business. Moral capital in

the form of competence to develop personality integrity that

can lead to trust in others. Therefore, an entrepreneur always

pays attention to entrepreneurial ethics such as honesty,

integrity, keeping promises, loyalty, fairness, likes to help

others, respecting others, being a good citizen and law-

abiding, pursuing excellence and responsibility. 2.6.1.

Research Descriptions. Based on the literature review, the

framework of thinking, the hypothesis in this study are as

follows: 1). There are mutual influences between business

capital, business environment and entrepreneurial

characteristics. 2). There is the influence of business capital on

business performance. 3). There is the influence of the

business environment on business performance. 4). There is an

influence of entrepreneurial characteristics on business

performance. 5). There is influence of business capital,

business environment, and entrepreneurial characteristics both

partially and simultaneously on business performance. 6).

There is an influence of business performance on business

continuity.

CHAPTER III

RESEARCH METHODOLOGY

3.1. Research design. The intended design is the method. This

method used in the research is the survey method. The survey

method is a research method used to obtain facts from existing

symptoms and to find facts in fact (Nazir, 1998). With survey

methods can dissect, discuss, and recognize problems, and get

justification for the circumstances and practices that are

ongoing. In addition, the survey method can also be evaluated

and comparisons of things people do in handling similar

situations or problems and the results can be used in making

plans and decision making in the future. In the survey research

method, data is collected from samples of the population and

uses questionnaires as a basic data collection tool

(Singarimbun & Effendi, 1995). In accordance with its

purpose, this research is to explain the causal relationship

between research concepts and hypothesis testing in order to

make decisions inductively or generalize, then this research is

explanatory or confirmatory research.

3.2. Research model

3.2.1. Research variable. In this study there were 5 (five)

latent variables that were used as research objects, namely the

Influence of Business Capital (PMU), Changes in Business

Environment (PLU), Entrepreneurship Character (KK),

Corporate Performance (KP) and Small and Medium

Enterprises Limited Liability Companies (UKMPT) . Each

latent variable cannot be measured directly but can be

measured through a manifest variable, that is an indicator of

each of these variables. The latent variable is symbolized by

the ellipse environment, while the manifest variable is a

square or rectangular symbol. In SEM analysis techniques

know the terms exogenous and endogenous variables. The

exogenous variables in this study were the Influence of

Business Capital (PMU), Business Environment Change

(PLU), and Entrepreneurship Character (KK). While

endogenous variables are Company Performance (KP) and for

Small and Medium Enterprises Limited Liability Company

(UKMPT). 3.2.2. Operational Definition of Variables.

Operational definitions for each research variable are as

follows: 3.2.2.1. The Influence of Business Capital is capital

that is used to build entrepreneurial businesses measured by

indicators: intellectual capital (X1), social capital (X2) moral

capital X3), mental capital (X4), and material capital (X5).

3.2.2.2. Changes in the Business Environment is the state of

the environment where business activities are carried out

measured by indicators: the visible dimension (X6), the

borderless dimension (X7), the cyber dimension (X8), and the

dimension of high multiplus (X9). 3.2.2.3. Entrepreneurship

character is the ability to create or provide acceptable new

ideas in solving entrepreneurial problems as measured by

indicators: knowledge (X10), network (X11), energy (X12),

commitment (X13), passion (X14). 3.2.2.4. The Company's

performance is measured by indicators: written commitments

and plans (Y15), product development (Y16), and strong

marketing teams (Y17). 3.2.2.5. Limited Liability Small and

Medium Enterprises are measured by indicators: low cost

(Y18), differentiation (Y19), and focus (Y20).

3.3. Sources and Methods for Determining Data. Sources of

data needed in the study consist of primary data and secondary

data. Primary data is obtained by conducting field research

through distributing questionnaires to leaders who are also

company owners in limited liability companies PT. Inti Nusa

Binhara, while the secondary data source is obtained by

conducting a literature review, namely studying literature

books, scientific journals, newspapers, scientific magazines,

seminar papers, information through the internet that are

relevant to the variables studied. In addition, data sources were

obtained from the relevant agencies and other papers which

had to do with the variables used in this study. Whereas the

target population is all small and medium-sized limited

liability companies in West Java that have received healthy

and halal certificates from the Food and Drug Monitoring

Agency (LPP POM). The technique of determining sample

locations using Cluster Random Sampling (CRS). With the

following steps: 1) Creating a sampling frame that is in the

form of a list of districts and cities in the West Java Province,

the results of which are as many as 16 districts and 9 cities. 2)

Selecting districts and cities that will be used as locations

(regions) of samples

3) For the distribution of sample units and the interest of each

city and district, then from 25 regencies / cities in West Java,

divided into 5 geographical regions with division of regions. Primary data is obtained by conducting field research through

distributing questionnaires to leaders who are also company

owners in limited liability companies PT. Binhara Inti Nusa,

while the secondary data source is obtained by conducting a



literature review, namely studying literature books, scientific

journals, newspapers, scientific magazines, seminar papers,

information through the internet that are relevant to the

variables studied. In addition, data sources were obtained from

the relevant agencies and other papers which had to do with

the variables used in this study.

Whereas the target population is all small and medium-sized

limited liability companies in West Java that have received

healthy and halal certificates from the Food and Drug

Monitoring Agency (LPP POM). The technique of

determining sample locations using Cluster Random Sampling

(CRS). With the following steps: 1) Creating a sampling frame

that is in the form of a list of districts and cities in the West

Java Province, the results of which are as many as 16 districts

and 9 cities. 2) Selecting districts and cities that will be used

as locations (regions) of samples. 3) For the distribution of

sample units and the interest of each city and district, then

from 25 regencies / cities in West Java, they are divided into 5

geographical regions with the following regions: a. Region I

(Western West Java), covering Bogor Regency, Sukabumi

Regency, Cianjur Regency, Sukabumi City, Bogor City and

Depok City, which are used as sample units are Cianjur

Regency and Sukabumi City. b. Region II (Central West Java)

Covers Bandung Regency, Sumedang Regency, Bandung City

and Cimahi City, which are used as sample units in Bandung

City and Cimahi City, which are used as sample units in

Bandung City and Cimahi City. c. Region III (Southern West

Java) covers Garut Regency, Tasikmalaya Regency, Ciamis

Regency, Tasikmalaya City, and Banjar City, which are used

as sample units in Ciamis Regency and Tasikmalaya City. d.

Region IV (Eastern West Java), including Kuningan Regency,

Majalengka Regency, Cirebon Regency, Indramayu Regency

and Cirebon City, which are the sample units of Cirebon City

and Indramayu Regency. e. Region V (North West Java),

covering Subang Regency, Purwakarta Regency, Karawang

Regency, Bekasi Regency, and Bekasi City which are used as

sample units are Subang Regency and Bekasi City. The

selection of sample regions in each region was considered by

the availability of sample units and those that had the largest

number of small industries and the second in the region. The

technique of determining sample units is done by using

random sampling techniques (sample random sampling). The

sample size determination for each sample region and regency

/ city is carried out proportionally. The sample size taken

according to Schumacker and Lomax (1996: 20) is about 100-

150 subjects for sample size. According to Kelloway (1998:

20) that in general the sample size is 100-200 observations

which are adequate minimum limits (Hair et.al, 1998).

According to Joreskog & Sorbom in Bachrudin & Tobing,

(2003; 12) the sample size of at least 100 samples is sufficient.

Based on this opinion, it is a reference for the minimum

sample requirements of the total 488 population, the selected

sample size of 133.05 is rounded up to 135. Determination of

the sample size is supported by calculations made by

Surakhmad (1994: 100), "Sampling is 15 % is used if the

population is more than 100 and sampling as much as 50% is

used if the population is less than 100. The following is a

small and medium business limited liability company which is

registered at the KUKM Office that has a healthy and halal

certificate in West Java In summary, the division of regions,

sample units and sample sizes can be combined with the area

of West Java Province, both City and Regency with a total of

488 samples and the population taken is 100 so that the

content can be seen.

3.4. Data collection technique. Data collection techniques for

the purposes of research analysis used data collection

techniques through questionnaire observation and interviews.

1. Observing, which is collecting data by observing the

activities of the company directly related to the problem that is

meticulous. 2. Disseminate Questionnaires, to respondents

using a list of questions submitted directly to respondents,

concerning the influence of business capital, changes in the

business environment, entrepreneurial character and to small

and medium enterprises limited liability companies and

company performance. 3. Conduct interviews with all parties

related to the problem under study, in order to be able to

reveal facts that occur in the field. Prime data obtained from

questionnaires are arranged in an ordinal scale based on the

Likert Summated Rating. Before the questionnaire was used to

collect primary data, a questionnaire trial was conducted to

test its validity and profitability.

Validity testing is testing the level of ability of a measuring

instrument to be able to measure what should be measured.

The purpose of testing the validity of the questionnaire is to

measure how carefully a test performs its size, two elements

about its target, and accuracy or the ability of a measuring

instrument to carefully measure the size of the symptoms or

parts of the symptoms being measured.

3.5. Research Instrument. In the field of research instrument as

a tool for collecting research data (Djamail & Mulijono, 2004,

7). The instruments in this study consisted of business capital

instruments, business environment, entrepreneurial

characteristics, business success and business continuity.

Instruments are very important in a study. This is because the

instrument as a data collection tool is used to answer the

research hypothesis. For this reason, an instrument must fulfill

certain conditions, namely valid and reliable. Anastasi and

Urbin (1998, 85) state that validity is concerned with what is

measured by the test and how well the test can measure. An

instrument is declared valid if it has a high validity coefficient.

Instead the instrument is not or less valid if it has a low

validity coefficient. In this research, testing validity includes

content validity and construct validity. In analyzing this

instrument, testing the validity and reliability using the

LISREL computer version 8.54. The technique used is

Confirmatory Factor Analysis (CFA). Confirmatory factor

analysis is a factor analysis whose latency variables (factors)

have been determined before the data are analyzed, the

purpose is to confirm the observed variables on the latent

variables (Sitinjak & Sugianto, 2006, 40). To determine

significantly by looking at the value of the results of the t test

and comparing it with the t table or 1.96. If the value of t

count is greater with t table or 1.96 then it is declared

significant. In addition to estimation and t-test calculations, it



is also based on the Goodness of Fit (GOF) test, which is

testing whether empirical data with the model is fit. If the

criteria for stating that data and models are fit are explained in

the decomposition of data analysis techniques. Fornel and

Larker in Wijanto, (2008, 66) stated that to measure

instrument reliability in SEM used a composite reliability

measure (measure of composite reliability) and variance

extracted measure (size of extract variant). The composite

reliability of a construct is calculated by the formula:

(Σ Standard Loading) 2

CR = ------------------------------------

(Σ Standard Loading) 2 + Σ ej

Information : CR = Construct Reliability. ej = Meanxurement

Error. Variance extracted reflects the total number of variants

in the indicators (the most variable variables) explained by

latent variables. The size of extract variance can be calculated

by the formula:

(Σ Standard Loading) 2

VE = -------------------------------------

(Σ Standard Loading) 2 + Σ ej

Information : VE = Variance Extracted. ej = Meanxurement

Error. Hair, et. Al (1998) states that a contract has good

reliability if: 1) the value of Construcct Reliability is greater or

equal to 0.7.2) Variance Extracted is greater or equal to 0.5.

3.6. Data analysis technique. To test the research hypotheses,

the stages of data analysis are carried out first, namely as

follows. (1) describing research variable data, (2) conducting

analysis requirements test, and (3) testing the hypothesis.

Descriptions of each variable include; calculation of average,

adequate, mode, variance, standard deviation, range,

maximum and minimum score. After descriptive analysis

followed by inferential analysis used to test the research

hypothesis. In the research the contents of the hypothesis test

are carried out by SEM (Structural Equation Modeling). SEM

is a multivariate analysis technique that is used to test the

relationship between complex variables to obtain an overview

of the overall model. SEM can test together structural models

and measurer models. The structural model is the relationship

between constructs or latent variables (variables that cannot be

measured directly and require some indicators to measure

them) independent and dependent (exogenous and

endogenous). Measurement model is a relationship (loading

value) between indicators and latent variables or constructs

(Ghozali & Fuat, 2005: 3). Bollen and Long (Schumacker &

Lomax, 1996: 63) state that the steps in SEM analysis include:

model specifications, model identification, parameter

estimation, fit and respensification tests. If in the assessment

phase the fit model is found that empirical data with the model

is not fit, modification of the model is carried out. Based on

the study of the theory underlying this research, the research

hypothesis and operational definitions of variables, the path

diagram of this study is described as follows:



1

3

2 1 2

X11

X12

X13

X14

X15

X21

X22

X23

X31

X32

X34

X33

X35

Y13 Y12 Y11

Y23

Y22

Y21

11

12

13

15

14

21

31

32

33

35

34

22

23

1

7

6

5

2

3

4

8

9

10

11

12

13

1

5

2

6

3

4 2 1

51

52

53

41 42 43

11

12

13

1

12 13

23

Figure : Structural Relationship Model for the influence of Business Capital, Changes in the Business Environment, Characteristics of Entrepreneurship in Small

and Medium Enterprises Limited Liability Companies and Their Impact on Company Performance in Palasah Village, Palasah District, Majalengka District, West

Java Province.

3.7. Model Specifications. Based on the path diagram, the

specification of the measurement model of the causal

relationship in this study is as follows, namely the

specification of the measurement model for each latent

variable or construct of the Exogenous Latent Variable. a)

Business Model Effect (ξ1). X1 = λx1ξ1 + δ1. X2 = λx2ξ1 +

δ2. X3 = λx3ξ1 + δ3. X4 = λx4ξ1 + δ4. X5 = λx5ξ1 + δ5. b)

Changes in the Business Environment (ξ2). X6 = λx6ξ1 + δ6.

X7 = λx7ξ1 + δ7. X8 = λx8ξ1 + δ8. c) Entrepreneurship

Character (ξ2). X9 = λx9ξ2 + δ9. X10 = λx10ξ2 + δ10. X11 =

λx11ξ2 + δ11. X12 = λx12ξ2 + δ12. X13 = λx13ξ2 + δ13.

Endogenous Latent Variable. a) Company Performance (η1).

Y11 = λy1η1 + ε1. Y12 = λy2η1 + ε2. Y13 = λy3η1 + ε3. b)

Small and Medium Enterprises Limited Liability Company

(η2). Y14 = λy4η1 + ε4. Y15 = λy5η1 + ε5. Y16 = λy6η1 +

ε6. Information : X1 = Variable (indicator) manifest of

exogenous latent variables. Y1 = Variable (indicator) manifest

of endogenous latent variables. Xxij = Factor of exogenous

loading latent variable towards manifest variable (indicator)

(Lamda). Xxij = factor loading endogenous latent variables on

the manifest variable (indicator) (Lamda). ξ1 = Exogenous

latent variables influence business model (Ksi 1). ξ2 =

Exogenous latent variables changes in business environment

(Ksi 2). ξ2 = Exogenous latent variables Creativity (Ksi 3). η1

= Endogenous latent variable achievement motivation (Eta1).

η2 = Entrepreneurial endogenous latent variable (Eta 2). δi =

Error measuring manifest (indicator) of exogenous variable

(Delta). εi = Error measuring the manife variable (indicator) of

endogenous variables. (epsilon). Conversion path diagram into

a series of structural equations and measurement model

specifications. a. Construct Measurement of the Influence of

Business Capital. The exogenous construct measurement

model The Influence of Business Capital is shown in Figure

3.2 below:



Figure : Exogenous Construct Measurement Model Effect of Business Capital. Based on figure 3.2 structural equations can be

derived as follows:

X11 = λ11 ξ1 + 1 ...................................................................................... 3-3

X12 = λ12 ξ1 + 2 ...................................................................................... 3-4

X13 = λ13 ξ1 + 3 ...................................................................................... 3-5

X14 = λ14 ξ1 + 3 ...................................................................................... 3-6

X15 = λ15 ξ1 + 3 ...................................................................................... 3-7

b. Construct Measurement of Business Environment Changes.

The measurement model for exogenous constructs of the

Business Environment is shown. And furthermore in the

measurement and translation described in detail.

3.8. Model Identification. The identification of the model is

done to get a picture of whether the covariance variant

information from the manifest variables is sufficient to

produce a unique solution (uniq solution) to obtain the model

parameters. Model identification is done to maintain that the

specified model is an Unidentified or underidentified model.

There are three possibilities that can occur in identifying the

model, namely: a) under-identified, which is where the

number of parameter values is not sufficient to estimate the

problem. This is because the estimated number of parameters

is greater than the number of known data (variance and

covariance of the manifest variables). b) Just-identified, which

is where the estimated number of parameters is the same as the

known data. In this model, only one information is used to test

the model (degree of freedom = 0), so that a single unique

solution can be estimated to estimate parameters. c) Over

identified, where the estimated number of parameters is

smaller than the number of known data. In this model, there is

a positive degree of fredoom, so that there is a number of

information that can be used to test the model (Byrne, 1998:

28-29). To determine whether the model in this study contains

under identified or not, the following assumptions must be

fulfilled and as a measure of whether the estimated number of

parameters is smaller, equal to or greater than the known data:

t ≤ s / 2. Information : t = Number of parameters

estimated. s = Number of data known (Amount of variance

and covariance of manasfest variables); s = (p + q) (p + q + 1).

p = Number of manifest variables of endogenous variables

(Y). q = Number of manifest variables of exogenous variables

(X). In this study, the number of parameters estimated (t) is

69, and the total number of variances and covariance of the

manifest variable (s) is 650, so that they are obtained: Then it

is concluded that the model is in a condition over-identified

with df (degrre of freedom) = 325-69-256. t ≤ s / 2. 69 ≤ (12 +

13 (12 + 13 + 1) / 2. 69 ≤ 650/2. 69 325.

3.9. Parameter Estimation. At this stage, it aims to obtain an

estimate of each parameter specified in capital that forms a

matrix of population covariance estimates (Σ), as close as

possible to the value of ang in the sample covariance (S). The

sample covariance matrix (S) is used to represent the

population covariance matrix (Σ), because the population

covariance matrix is unknown (Long, 1990, 56). There are

several estimation methods that can be used in SEM analysis.

3.10. Match Test. The main objective of SEM analysis is to

analyze the compatibility between the data and the

hypothesized model. The following are some indicators to test

the suitability of the model with data (Goodness of Fit).

3.11. Specification. This stage is based on the results of a

match test. The specifications depend on the model strategy

used. Wijanto (2008, 67) states that there are 3 (three) capital

strategies that can be chosen by SEM, namely: a)

Confirmatory modeling strategy. In this strategy modeling is

specified in one single model, then empirical data collection is

performed and significance testing is carried out. This test will

produce whether the model is accepted or not. This strategy

does not require respecification. b) Model competition

strategies (computing models strategy). In this capitalization

strategy, several alternative specification models and based on

an analysis of a group of empirical data, one of the most

suitable models was chosen. In this strategy respecification is

only needed if alternative models are developed from several

existing models. c) Model development strategy (development

strategy model). In this strategy an initial model is specified

and empirical data is collected. If the proposed model is not fit

with empirical data, then the model is modified and retested

1

X11

X12

X13

X14

X15

11

12

13

15

14

1

5

2

3

4



with the same data. In this study a model development strategy

was chosen, where if the tested model was not fit with the

data, modifications were made based on the underlying theory

until a model was found to be suitable with empirical data.

3.12. Location and Research Schedule

3.12.1. Research sites. This research was conducted at certain

points of the most influential in observations (observations) of

researchers in Palasah Village, Palasah District, Majalengka

District, West Java Province. The duration of this study runs,

requiring a time span of between 6 (six) months from

September 2018 to February 2019, from the beginning of the

activity including preparation time to the stipulation of

completion time in the form of research results and scheduled

times therein. In conducting this research the researcher made

observations, also the researchers came directly to the object

of this research both with community members and the local

government apparatus (APD) or local government work units

(SKPD), namely at the village level namely Palasah Village ,

Subdistrict namely Palasah Subdistrict, and Regency level

namely Majalengka Regency, West Java Province, to obtain

the available evidence and validity in the reality of

phenomenological field data. And the evidence is in the form

of data and documents in the form of official letters where the

documents of the data are original obtained by the researcher

directly from the object in this study, which is in the location

of the research which is used as one of the research objects for

researchers valid nature of its existence in a predetermined

location, namely in a limited liability company Inti Nusa

Binhara and community members in Palasah Village, Palasah

District, Majalengka District, West Java Province.

3.12.2. Research schedule. The research schedule is as follows

with the research time as shown in the table:

Research schedule Activities Sep

2018

Okt

2018

Nop

2018

Dec

2018

Jan

2019

Feb

2019

Mar

2019

Preparation V

Proposal V

Data collection V

Research proposal V V

Research result

Meeting :

1) Closed

2) Open

V

V

CHAPTER IV

RESULTS AND DISCUSSION

4.1 Analysis of Description. Observations or data to be

analyzed are collected primarily using a questionnaire. With

the number of respondents selected into the sample as many as

200 leaders (owners) of small and medium enterprises

throughout the districts / cities in West Java. The

questionnaire consisted of 70 questions regarding respondents'

assessment of the Influence of Business Capital, Changes in

the Business Environment, Characteristics of

Entrepreneurship, Company Performance on Small and

Medium Enterprises Limited Liability Companies in Palasah

Village, Palasah District, Majalengka District, West Java

Province. After the data was obtained then tabulated,

described and then analyzed to determine the effect of the

Influence of Business Capital, Entrepreneurship Character and

Changes in Business Environment and Company Performance

and its implications for Small and Medium Enterprises

Limited Liability Company in Palasah Village, Palasah

District, Majalengka District, West Java Province using

analysis of Structural Equations Modeling (SEM). The

following is a description of the description of the data

observed by respondents.

4.2. Questionnaire Testing

4.2.1 Test Validity. Validity test is used to measure whether

the measuring instrument used in this case is an item or the

questionnaire statement is the right measurement (valid) or not

at all. For a large enough sample size (n> 100) an item is said

to be valid if it has a positive correlation value and the

minimum is included in the category of weak correlation (r>

items have a value of t that is greater than the value of t-table

- 2. The

hypothesis of testi

measure the validity of the questionnaire items were Rank

Spearman correlation, which was formulated as: Where : r = j-

correlation coefficient in the variable concerned di = R (xij) -

R (tij). sample size used in the study. R (x.j) = ranking score

of item i-questionnaire in j-variable. R (tj) = ranking total

score of jth variable questionnaire items. Correlation values

obtained from calculations are compared with the critical

freedom dk = n - 2, or by using the following test statistics: ~

- 2). Criteria for testing the validity of

questionnaire items using provisions: a) Item question /



b) Item questions / questionnaire statements declared invalid if

tcount <t table. The following is a summary of the Business

Capital variable validity test consisting of 10 items or

statements submitted to 200 respondents. Test the Validity of

the Questionnaire Variable in Changing the Business

Environment.

Item 1-

10 -

488

rhitung Thitung Ttabel rkritis Conclusion

11 0,771 17,036 1,972 0,300 Valid

12 0,756 16,252 1,972 0,300 Valid

13 0,725 14,812 1,972 0,300 Valid

14 0,774 17,201 1,972 0,300 Valid

15 0,797 18,568 1,972 0,300 Valid

16 0,714 14,350 1,972 0,300 Valid

17 0,749 15,907 1,972 0,300 Valid

18 0,656 12,230 1,972 0,300 Valid

19 0,635 11,566 1,972 0,300 Valid

20 0,680 13,050 1,972 0,300 Valid

21 0,741 15,527 1,972 0,300 Valid

22 0,811 19,506 1,972 0,300 Valid

23 0,685 13,230 1,972 0,300 Valid

24 0,769 16,927 1,972 0,300 Valid

25 0,768 16,874 1,972 0,300 Valid Source: Data on Questionnaire Analysis Results, 2018.

4.3. Successive Interval Method. Observation data collected in

the field using a Likert scale or level of measurement is

ordinal scale. Because in this study, the magnitude of the

influence of independent variables (exogenous) on the

Influence of Business Capital, Changes in Business

Environment and Entrepreneurship Character on non-free

(endogenous) Company Performance and its implications for

Small and Medium Enterprises Limited Liability Companies

using structured equation modeling (SEM) ) with a minimum

scale interval, then the Likert scale data is first converted into

an interval scale. Increase the ordinal scale to the interval

using the Method of Successive Interval (MSI from Hayes

(1963)) for each valid item.

4.4. Data analysis

4.4.1. Analysis of Confirmatory Factors. Before assessing the

structural model of Influence of Business Capital, Changes in

the Business Environment and Characteristics of

Entrepreneurship on Company Performance that have

implications for Limited Liability Small and Medium

Enterprises, confirmatory factor analysis (CFA) is needed to

determine whether the dimensions which is used to predict the

latent variable is correct or not. By using Lisrel software

version 8.70, the estimated confirmatory analysis model is

illustrated as shown in the figure below.



Figure : CFA Model Effect of Business Capital, Changes in Business Environment, Characteristics of Entrepreneurship,

Performance of Companies and Small and Medium Enterprises Limited Liability Companies.

Because the CFA model all the latent variables are interconnected and the manifest variable is not allowed to predict more than

one latent variable, then the modification index of the addition of pathways does not need to be considered.

There are several error covariances that have a modification index value above 4, the largest between Y12 and Y21 of 32.5. This

means that by adding error covariance on the model it will reduce the Chi-Square value by 32.5 units. Modification of the CFA

model is done in stages by adding error covariance until the best model is obtained (fulfilling the goodness of fits criteria). The

modified results of the final CFA model as shown in the following figure.

The Modification Indices Suggest to Add an Error Covariance

Between and Decrease in Chi-Square New Estimate

X22 X21 8.1 0.07

X32 X31 17.1 0.05

X35 X31 15.8 -0.05

Y21 Y11 19.7 0.03

Y21 Y12 32.5 -0.05

Y23 Y11 17.2 -0.04

Y23 Y12 31.7 0.06



Figure : Final Modification CFA Model

By adding 6 (six) gradual error covariance pieces, namely Y12

-square value of

172,8204 (P- value = 0.0000) to 83.2666 (P-value = 0.2158) is

much smaller than the initial CFA model and the RMSEA

value becomes equal to 0.02509 (Appendix 7). So that the

CFA model of this modification can be said to be fit. Testing

the significance of parameter estimates for each dimension in

predicting latent variables and covariance (correlation)

between latent variables and error covariance is presented.

4.4.2. Data Evaluation. Data evaluation is done to find out

whether the data to be analyzed using a structured model

meets the specified requirements or not. In a structured model,

the estimated parameters (loading factor and or regression

weight) produced through SEM analysis are expected to be the

best estimate, that is, having an unbiased nature and a

minimum variance. This data evaluation consisted of a

conformity test of confirmatory factor analysis model,

normality test, outlier examination (outliers), multicollinearity

test and singularity.

4.4.3. Establishment of Structural Equation Modeling (SEM).

In the SEM analysis the next stage after testing dimensionality

of factors, checking normality, outliers is forming a structural

model based on the final results of the CFA model which is to

find out the Influence of Business Capital, Entrepreneurial

Characteristics on Corporate Performance and its implications

for Small and Medium Enterprises Limited Liability

Companies in the Village Palasah Palasah District Majalengka

Regency, West Java Province.

Based on the model compatibility test in the table above,

conclusions can be described as follows: 1. Chi-Square value

of SEM model is 86.9575 (P-value = 0.2051). By taking the

95% confidence level, H0 is accepted and the model is

declared good because it has Chi-Square <abel2 table =

98.4844 or P-value value greater than the value of 0.05. 2. The

RMSEA value (Root Mean Square Error Approximation) is

less than 0.08. Standarized value of RMR (Standarized Root

Mean Residual) of 0.01610 is smaller than 0.05. By taking the

95% confidence level, H0 is accepted and the model is

declared good. 3. GFI value (Goodness of fit index) of 0.9449,

AGFI (Adjusted Goodness of fit index) of 0.9142, NFI

(Normed fit index) of 0.9925, NNFI (Non-Normed fit index)

of 0, 9986 and CFI (Comparative fit index) of 0.9990. All

match index values are greater than 0.90. Taking the 95%

confidence level, H0 is accepted and the model is declared

good. 4. The value of PNFI (Parsimony Normed fit index) of

0.7279 is greater than 0.60, so the model is declared good.

From all the fit test indices, it can be concluded that the SEM

model has fulfilled the minimum goodness of fits

requirements so that the model is declared good and can be



used to answer the hypothesis in this study. The following figure is the result of SEM analysis for theoretical models.

Figure : Structural Model of the Influence of Business Capital, Changes in the Business Environment, Entrepreneurship Character on Corporate Performance and

Its Implications for Small and Medium Enterprises Limited Liability Companies.

The following table is a test of the structured model The Effect of Business Capital, Changes in the Business Environment,

Entrepreneurship Character on Company Performance and its implications for Small and Medium Enterprises Limited Liability

Companies. Table : SEM Model Regression Coefficient.

Variable

Laten

Endogen

Variable

Laten

Eksogen

Estimates

Parameter

Estimates

Parameter

standardized

Standard

node

thitung

Conclusion

Y1 X1 0,3164 0,3189 0,1021 3,0398 Significant

Y1 X2 0,2907 0,2879 0,06984 4,1628 Significant

Y1 X2 0,3356 0,3275 0,1104 3,0398 Significant

Y2 Y1 0,9398 0,9274 0,03643 25,8007 Significant Source: Data from Analysis Results, 2018 (Adi Suminto).

4.4.4. Measurement Model. Business Capital Measurement Model. Based on the SEM model in Figure 4.4 the measurement

model is for the latent variable Effect of Business Capital (X1) predicted by the dimensions of Tangible Capital (X11) and

Intangible Capital (X12).

4.4.5. Structural Model of Company Performance

Structured equation models from the Influence of Business Capital, Changes in Business Environment and Entrepreneurship

Character to Company Performance are stated.



X1 = Influence of Business

Capital

X2 = Changes in Business

Environment

X3 = Entrepreneurship

Character Y1 =

Company Performance

are stated

Figure : The Model of Company Performance Influenced by the Influence of Business Capital. Changes in Business Environment and Entrepreneurship Character.

4.4.6 Structural Models of Small and Medium Enterprises Limited liability companies. Hypothesis 5: Company performance

simultaneously affects the Small and Medium Enterprises Limited Liability Company. Structured equation model from the

Influence of Business Capital and Changes in the Business Environment on Company Performance.

Y1 = Business Performance

Y2 = Business development

Figure : The Model of Small and Medium Enterprises Limited Liability Companies Affected by Company Performance.

4.5. Discussion. Influence of Business Capital. This research

succeeded in showing the purpose of knowing and examining

how the influence of business capital in small and medium

enterprises limited liability companies in West Java. Business

capital used as a variable in this study uses the theory from

Suryana (2008) which states that the influence of venture

capital in small and medium enterprises limited liability

companies has dimensions of tangible capital and intangible

capital, where tangible capital is capital in the form of material

capital, and capital in the form of money , while intangible

capital in the form of intellectual capital, social capital and

moral as well as mental capital. Changes in the Business

Environment. This research succeeded in showing the purpose

of knowing and examining how the business environment

changes in businesses in West Java. The business environment

is dynamic, one of the factors that influences the dynamics of

the business environment, namely the development of

information technology. The results of this study refer to the

theory of Kinichi Ohmae in Widoatmodjo, (2007) that changes

in the business environment at the local level are closely

related to global business conditions. Entrepreneurship

Character. This research has succeeded in showing the

purpose of knowing and examining how entrepreneurial

character in a limited liability company in West Java. The

Zach's Star of Success theory is used as a variable to

determine entrepreneurial character, with the dimension of

knowledge (knowledge), by always updating business

development material / business theory to make its business

competitive advantage, this is demonstrated by business

people by always following the slightest developments

regarding the process procurement of raw materials, process of

making products and product distribution processes. Company

performance. This research succeeded in showing the aim to

find out and examine how the performance of companies in

small and medium enterprises limited liability companies in

West Java. Business performance is something that is

produced by the company in a certain period with reference to

the standard set. Measuring company performance is not easy,

in essence business operators in West Java are required for

example at PT. Binhara Inti Nusa measures balanced

performance between financial aspects and non-financial

aspects. Opinion Sinaga (2004) which states that performance

measurement can produce useful information, there are several

things that must be considered, namely the measurement

system must be in accordance with organizational goals,

describe key activities of management, can be understood by

employees, easily measured and evaluated and can used by the

organization consistently and efforts need to translate into

goals. Small and Medium Enterprises Limited Liability

Company. This research succeeded in showing the aim to find

out and examine how the development of small and medium

enterprises limited liability companies in small and medium

enterprises in West Java. The life cycle of small businesses is

analyzed by several experts to find out why businesses

X1

X2 Y1

0,3189

0,2879

X3

0,2279

0,3275

0,7223

0,7183

0,8296

Y1 Y2 0.9274

0.1399

Y1 = 0,3189 X1 + 0,2879 X2 + 0,3275 X3 + 0,2279

Y2 = 0.9274 Y1 + 0.1399



develop and change over time. This life cycle model is based

on the assumption that managers must be able to change their

business organizations to adapt better to internal aspects

(influence of business capital and entrepreneurial character)

and external aspects (changes in the business environment) in

order to have optimal performance and competitiveness to

sustain and develop his business. The effect of business

capital, changes in the business environment, and

entrepreneurial characteristics on the performance of the

company both partially and simultaneously in small-scale


District, Majalengka Regency, West Java Province. This

research succeeded in showing the magnitude of the influence

of venture capital, changes in the business environment, and

entrepreneurial character towards company performance both

partially and simultaneously in small and medium-sized


District, Majalengka Regency, West Java Province. Partially

this study shows that the influence of business capital has an

effect on company performance by 25.51%, while changes in

the business environment affect the company's performance by

21.74%, and entrepreneurial character influences the

company's performance by 26.16%. Simultaneously the

influence of venture capital, changes in the business

environment, and entrepreneurial character on company

performance have an effect of 73.41%. This study succeeded

in providing a theoretical description that the performance of

companies in small and medium enterprises limited liability

companies is influenced by optimizing and maximizing

utilization of business capital, both tangible capital and

intangible capital, as well as the readiness of business actors to

adapt to changes in a dynamic business environment to

maintain business and have strong business competitiveness. The impact of the company's performance on a small and

medium-sized business limited liability company in a small-

medium business limited liability company in Palasah Village,

Palasah District, Majalengka Regency, West Java Province.

This research succeeded in showing the magnitude of the

influence of the company's performance on small and medium

enterprises limited liability companies in Palasah Village,

Palasah District, Majalengka Regency, West Java Province, at

86.01%. The results of this study indicate that strong corporate

performance seen from the financial and non-financial aspects

will have a significant impact on business development. SWOT Analysis Development of a small and medium


District, Majalengka Regency, West Java Province.

Strength – Strength 1. Having a legal entity (in this case the

chosen respondent is a businessman in West Java who already

has a permit for a company registration issued by the

Department of Industry and Trade of West Java Province). 2.

Small and medium enterprises are businesses that have a

simple organizational structure so that they do not require

managerial aspects that advance only require managerial

aspects in accordance with the existence of Small and Medium

Enterprises only. 3. Various limitations in accessing

productive resources make small businesses independent,

strong and flexible. The flexibility of small businesses from

one sector to another, actually becomes its strength in survival

and developing its business. 4. Small and medium enterprises

Limited liability companies are the most promising vehicles

and mainstays for the creation of new entrepreneurs. Small

businesses are the closest level that can be reached by people

who want to start entrepreneurship. 5. Small and medium

enterprises Limited liability companies have the

characteristics of a large capacity for the realization of the

economic aspirations of the wider community to earn a living.

6. Small and medium enterprises Limited liability companies

have high flexibility and resilience in anticipating and

adapting to the dynamics of market changes. This is due to the

dominance of the domestic market, as well as the strong roots

in the use of domestic resource inputs. 7. Limited liability

small and medium enterprises are not affected by foreign

currency fluctuations, because they still use domestic raw

materials.

Weaknesses – Weaknesses 1. Low quality of Human

Resources, reflected in the lack of development of

entrepreneurship, low productivity, and competitiveness. This

weakness is influential in creating and utilizing business

opportunities, aggressively accessing markets (especially

exports), and access to capital sources. 2. Limited facilities

and infrastructure, especially in the transportation,

telecommunications, water supply and electricity sectors. 3.

The limited access of small businesses to productive resources

is an obstacle to business development quickly and

sustainably. This is due to the structure of the national

economy which is full of imbalances in control and allocation

of productive resources. 4. Efforts to accelerate small business

development have various limitations, namely a fair market

mechanism that has not been effective in functioning, limited

state finances for fostering small businesses, not yet optimal

Bank intermediary function, and not yet optimal

implementation of regional autonomy to support small

business development. 5. Low commitment, capability, and

quality of coaches from the government and the lack of

consistency in policy, and the spirit of integration of various

parties (policy makers) in developing small businesses. 6.

Limited use of information technology (such as the internet),

so that market reach is limited and business efficiency is low.

Opportunities – Opportunities. 1. The recovery of the national

economy from the economic crisis. 2. The creation of food

security and economic defense in people's welfare. 3.

Increased awareness, commitment and partisanship of the

government, business world and society on the importance of

small businesses in the economy. 4. There is a strong political

will from the government, and the growing demands of the

community to create equitable and transparent development,

as well as a commitment to build a populist economic system

(although its implementation cannot be seen and cannot yet be

felt). 5. Support constitutional institutions (small business

laws) that give priority to economic development in small

businesses in realizing a democratic economic system. 6.

Implementation of better autonomy, along with better

financial balance so that policy support from the local



government is expected to have an impact on the aspects of

equity prioritized by the government. 7. Changes in the

structure of the national economy from the agricultural sector

to the industrial sector and services. This creates opportunities

for small businesses to function as sub-contractors that are

strong and efficient for large businesses, with partnership

programs that are directly monitored by the government

through relevant agencies. 8. The increasingly rapid economic

cooperation between countries, especially in the context of

ASEAN and China, which provides greater opportunities for

marketing food and beverage products with borderless trade.

9. Availability of human resources in the workforce in large

numbers that are still not productively utilized. 10. The

potential of the domestic market continues to grow, along with

the development of the population and the level of consumer

purchasing power that is consumptive. 11. Development of

information and communication technology.

CHAPTER V

CONCLUSIONS AND RECOMMENDATIONS

5.1. Conclusion. Based on research carried out on small and

medium-sized entrepreneurs of limited liability companies in

Palasah Village, Palasah District, Majalengka District, West

Java Province, through observations, interviews and statistical

calculations, the results of the research can be concluded as

follows: 5.1.1. The Influence of Business Capital in this

research is in accordance with the formulation of the problem

and the objective can be concluded that the small-scale

business of limited liability companies in Palasah Village,

Palasah District, Majalengka Regency, West Java, assume that

tangible capital is a factor that determines business success,

business performance and business development , however, it

has begun to realize the importance of intangible capital as a

factor that determines the success of its business. The results

of the research and the findings of the above data can be

concluded that the small-scale business of limited liability


Regency, West Java Province have been able to optimize the

influence of business capital both tangible capital and

intangible capital with maximum effort to obtain and balance

business objectives inner satisfaction in managing and running

its business. 5.1.2. Changes in the business environment in this

research are in accordance with the formulation of the problem

and the goal can be concluded that the limited liability small-

scale business actors in Palasah Village, Palasah District,

Majalengka Regency, West Java, consider readiness from

various aspects to deal with dynamic environmental changes,

one of the factors the dominant one influences the dynamics of

the business environment, namely the development of

information technology. The small and medium-sized

businesses of limited liability companies in Palasah Village,

Palasah District, Majalengka Regency, West Java Province

have anticipated changes in the business environment by

preparing themselves by maintaining stability and maintaining

business space in the business they have mastered, both

markets and skills and expertise in producing goods or

services. The small and medium businesses of limited liability

companies in Palasah Village, Palasah Subdistrict, Majalengka

Regency, West Java Province in responding to changes in the

business environment have been characterized by not

recognizing the market trade limits of their products. These

provinces and countries are also supported by the entry of

Indonesia in the ACFTA members on January 1, 2010. Thus,

the free market has 2 (two) impacts for limited liability small

and medium businesses in Palasah Village, Palasah District,

Majalengka Regency, West Java Province, the first impact is

the positive impact of business actors can market a variety of

products without recognizing the boundaries of the region, it

can be known a variety of diversification of similar products

to improve the characteristics or specificity and uniqueness of

the products produced, but on the other hand the negative

impact of small and medium businesses s in Palasah Village,

Palasah Subdistrict, Majalengka District, West Java Province,

in terms of sales volume boosted by borderless trade, due to

competition from outside products in terms of display

packaging. The results of the study and the findings of the data

above can be concluded that the small-scale business of


District, Majalengka Regency, West Java Province must try

harder to be able to compete and compete in the business

environment, because the competitors are no longer between

boundaries in one country but it has crossed the country,

thereby requiring guidance and assistance from the

government to win the competition. 5.1.3. Entrepreneurship

character in this research is in accordance with the formulation

of the problem and the goal can be concluded that the limited

liability small-scale entrepreneurs in Palasah Village, Palasah

District, Majalengka Regency, West Java, assume that the

dominant aspect of the key success of small businesses is the

entrepreneurial character of the business actors. , because with

a high and unique spirit and character of business, business

people will always update technology information, add

business networks, strive to consistently carry out their

commitment to entrepreneurship, have strong mental and

physical readiness in facing the era of trade and free

competition, and have enthusiasm and high fighting power in

maintaining its business. The results of the study and the

findings of the data above can be concluded that the small and

medium-sized entrepreneurs of limited liability companies in


Java Province have strong entrepreneurial characteristics in

order to win business competition, by sharpening all

dimensions of entrepreneurial character. 5.1.4. The company's

performance in this research is in accordance with the

formulation of the problem and its objectives and it can be

concluded that the limited liability small-scale businesses in


Java, assume that business performance is something that is

produced by the company in a certain period with standards

set. Small-scale business actors measure balanced

performance between financial and non-financial aspects. The

results of the study and the findings of the data above can be

concluded that the small and medium-sized businesses of




District, Majalengka Regency, West Java Province must try

harder to maintain their business from the financial aspects

including management of various financial needs plans,

financial resources for realize business continuity and

development, as well as sorting profits as small business

actors, as well as non-financial aspects which include

evaluating the growth of product marketing and improving the

quality and quantity of products to be able to maintain

business continuity and business development. 5.1.5. Small-

scale business limited liability company in Palasah Village,

Palasah Subdistrict, Majalengka Regency, West Java

Province, in this study is in accordance with the formulation of

the problem and its objectives and it can be concluded that the

limited liability small-scale business in Palasah Village,

Palasah District, Majalengka Regency, West Java must be able

to change its business organization to adapt better to internal

aspects (the influence of business capital and entrepreneurial

character) and external aspects (changes in the business

environment) in order to have optimal performance and

competitiveness to maintain the continuity and development of

its business. The strategy of a small and medium-sized


District, Majalengka District, West Java Province, which has

been carried out by respondents in this study includes; aspects

of increasing access to productive assets, especially tangible

capital and intangible capital, the use of technology,

continuous improvement and management processes; aspects

of increasing access to the market, which includes a

comprehensive activity starting from business design and

reserve, information on market fluctuations, information on

effective and efficient production assistance, and marketing

infrastructure and facilities. And aspects of business

partnership, which are important and strategic pathways for

the development of people's economic businesses. The

partnership has proven to be successfully implemented in

developed countries, and has proven to be profitable for rapid

economic development and industrialization. The results of

the study and the findings of the data above can be concluded

that the small and medium-scale entrepreneurs of limited


Majalengka District, West Java Province have begun to

explore backward linkages (the linkage of large businesses

with local small businesses). Optimization of the three

dimensions made in this study must be understood as a

learning process for small and medium-sized businesses of


District, Majalengka District, West Java Province to maintain

business continuity and business development. 5.1.6. This

research succeeded in showing the magnitude of the influence

of venture capital, changes in the business environment, and

entrepreneurial character on company performance both

partially and simultaneously in small-scale limited liability


District, West Java Province. Partially this study shows that

the influence of business capital has an effect on company

performance by 25.51%, while changes in the business

environment affect the company's performance by 21.74%,

and entrepreneurial character influences the company's

performance by 26.16%. Simultaneously the influence of

venture capital, changes in the business environment, and

entrepreneurial character on company performance have an

effect of 73.41%. This study succeeded in providing a

theoretical description that the performance of a small and

medium-sized limited liability company in Palasah Village,

Palasah District, Majalengka Regency, West Java Province

was influenced by optimizing and maximizing utilization of

business capital, both tangible and intangible capital, as well

as business adjusting to changes in the dynamic business

environment in order to maintain business and have strong

business competitiveness. Likewise, the results of this study

prove that the small and medium businesses of limited liability


Regency, West Java Province have strong entrepreneurial

character, with the proven dominance of entrepreneurial

character variables influencing company performance.

5.1.7. This research succeeded in showing the magnitude of

the influence of the company's performance on the

development of a small-scale business limited liability


Regency, West Java Province, 86.01%. The results of this

study indicate that a strong corporate performance seen from

the financial and non-financial aspects will have a significant

impact on the development of a small-scale limited liability


Regency, West Java Province.

So that researchers can provide strong findings that business

performance influences business development, in accordance

with the theoretical opinion expressed by Prieto and Revilla

(2006) that the success indicator of the performance of small

and medium-sized enterprises is characterized by market

growth and quality improvement in product improvements.

This opinion is reinforced by the opinion of Kartasasmita

(2008) that small business actors can make observations,

imitate and modify products or packaging as a result of

partnership programs.

The performance of a small and medium-sized business

limited liability company can affect the development of a

small-scale business limited liability company in Palasah


Province, if the government really bridges between small

businesses and large companies to partner in various matters,

especially making small business producers product sub

elements from large companies. If this has already been

realized, the small business actors will try to evaluate the

performance of their business to create partnerships with large

companies as new opportunities to get their own market

segments.

5.2. Suggestion

In this section the researcher gives suggestions, departing from

several weaknesses that have been found:

5.2.1. The small-scale businessman of a limited liability


Regency, West Java Province, has a dilemma regarding



business capital because they always assume that the influence

of business capital is money or material, whereas theoretically

business capital is related to intellectual, social and moral, and

mentally, departing from the findings, the researchers

suggested that small and medium-sized businesses limited

liability companies to further increase their participation in

associations that were established or bring information closer

to the local District / City Industry and Trade Office. 5.2.2.

Small-scale entrepreneurs of limited liability companies in

Palasah Village, Palasah Subdistrict, Majalengka Regency,

West Java Province, are generally ready for changes in the

global environment, but the government needs to prepare

technology information infrastructure as a bridge to be able to

compete with external products, both from product aspects and

marketing aspects. 5.2.3. The small-scale businessman of a

limited liability company in Palasah Village, Palasah District,

Majalengka Regency, West Java Province has a good

character of entrepreneurship, this is evidenced by the many

small business actors who are able to survive with the

competitiveness, creativity and innovation of business actors,

so that entrepreneurial characteristics are only needed

increased commitment to decisions taken to secure the

decision that is being carried out as a limited liability small

and medium business in Palasah Village, Palasah District,

Majalengka District, West Java Province 5.2.4. The small-

scale businessman of a limited liability company in Palasah

Village, Palasah Sub-District, Majalengka District, West Java

Province already has quite a proud business performance both

from financial and non-financial aspects, the researcher

suggests that business people improve non-financial

performance aspects related to growth, improvement and the

quantity of the product to survive and even win competition

with foreign products, this also requires the role of the

government to provide protection to small-scale entrepreneurs

of limited liability companies in Palasah Village, Palasah

District, Majalengka District, West Java Province. 5.2.5.

Business development for small and medium businesses in


Subdistrict, Majalengka District, West Java Province has

begun to show a desire to start the partnership process, but the

role of the government in this department is not optimal to

support the movement of partnership programs. whereas one

of the dominant indicators of business development is a

partnership program. This research requires seriousness and

concrete steps from the government to assist business

development. 5.2.6. The performance of the small and

medium-sized company of a limited liability company in


Java Province is influenced by business capital, changes in the

business environment, and entrepreneurial characteristics in

this study recommending related agencies in the district / city

to pay more attention to aspects of entrepreneurship and

intrapreneurs to prosper their society by paying more attention

to understanding business capital assistance, helping

information about changes in the business environment and

assisting the character of entrepreneurship starting at an early

age, for example by incorporating entrepreneurship programs

in the school curriculum at the primary and secondary

education level. 5.2.7. If the performance of a limited liability

small-scale business in Palasah Village, Palasah District,

Majalengka Regency, West Java Province is optimal, for

example in the company PT. Binhara Inti Nusa this

Majalengka Branch. So business development programs in the

form of partnerships as a dominant aspect in business

development must be escorted and supervised by the

government so that a mutual symbiosis process continues,

because partnership programs are found that are only carried

out and run when there are government elements but cannot

continue because they feel partnership programs are only

stimulant assistance.

BIBLIOGRAPHY [1] Sunoto. 2018. Effect of Implementation of Electronic Transaction

Information Policy, Strengthening People's Economy, Public

Perception and Entrepreneurship Community Participation on GIS

(Regional Research) Strategy Plans, Tangerang: PT. Bestari Putra Rajawali.

[2] Adi Suminto. 2018. Leadership style motivated by job satisfaction:

regional research method, Tangerang: PT. Bestari Putra Rajawali. [3] Adi Suminto. 2018. Supervision of performance: research method,

Bekasi City: Inti Nusa Binhara Foundation. [4] Adi Suminto. 2017. Social Existence of Community Diseases in

the Perspective of Human Rights. Bogor: CV. Sela Kencana.

[5] Ahadiat, Ayi. 2007. Entrepreneurship. From: http://deveindo.wordpress.com/ 2007/05/02 / entrepreneurship in

various perspectives (Accessed, March 19, 2008).

[6] Alma, 2007. Entrepreneurship for students and the public. Bandung: Alfabeta.

[7] Anton Cozijnsen and Willem Vrakking "Handbook of innovation

management" (Basil Blackwell Ltd, 1993) [8] Atkinson, John. W. 1997. Motive in Fantacy Action and Society.

New Jersey: D. Van Nordstrad Company.

[9] Aysegul Ozsomer, Roger J. Clantone and Anthony Di Benedetto

(1997) ‘What Makes Firms More Innovative? A Look at

Organizational and Environmental Factors', Journal of Business &

Industrial Marketing. [10] Azwar, Saifuddin. 2003. Reliability and validity. Yogyakarta:

Student Library.

[11] Bagia, I Wayan, 2005, Influence of intellectual capital and job satisfaction on the performance of District Government employees

in Bali; Dissertation, Padjadjaran University Bandung

[12] Begley, M. W., and D. P. Boyd (1987) "Psychological Characteristics Associated with Performance in Entrepreneurial

Firms and Small Businesses," Journal of Business Venturing 2, 79-

93. [13] Bird, Barbara (1988), "Implementing Entrepreneurial Ideas: The

Case for Intention," Academy of Management Review 13, 442-

453. [14] Boberg, A. L. (1988), "Changing Pat of Demand: Entrepreneurship

Education for Entrepreneurs," in Frontiers of Entrepreneurship

Research. ed Bruce A. Kirchhoff,

[15] Bygrave, William D. 1994. The Portable MBA in

Entreprenuership. New York: John Willey & Son., Inc.

[16] Carlos, M. Zamralita & Nisfiannoor, M. 2006. Relationship between Self-Efficacy and Marketing Employee Performance.

Phronesis, Industrial Psychology Scientific Journal and Untar

Psychology Faculty Organization, 8 (2), 1996-206. [17] Carol M Sanches. (1997) "Environmental Regulation and Firm-

Level Innovation", Business & Society.

[18] Chabachib, Mochamad, 2001, Effect of quality management on member participation and the business environment on the

implementation of management and financial performance of KUD

in Central Java; Dissertation, Padjadjaran University Bandung. [19] Dalimunthe, Rita, 2003, Effects of Individual Characteristics,

Entrepreneurship, Leadership Style on Business Capability and

Success of Small Weaving and Embroidery Industry Businesses in



North Sumatra, West Sumatra and Riau; Dissertation, Padjadjaran

University Bandung.

[20] Djali & Pudji Muljono. 2004. Measurements in the Field of

Education. Jakarta: Postgraduate Program in Jakarta State

University. [21] Decay, J.S. and Lennon, K.H. 1999. Understanding Creativity. San

Francisco: Jossey-Bass Pub.

[22] Dewanti, R. 2008. Entrepreneurship. Jakarta: Mitra Wacana Media.

[23] Dewi S.P. 2003. Transition of Indonesia's organizational structure

in the Era of Globalization. Management Journal of FE Unpar, VII (01) 33-38.

[24] Effendi, Sugito, 2005, Effect of Human Resource Management

strategies on training and intellectual capital and their impact on company performance; Dissertation, Padjadjaran University

Bandung.

[25] Fred J. Heemstra, RobJ. Kusters (1996) "Dealing with Risk: a Practical Approach" Journal of Information Technology, Issue

333-346.

[26] Firdausy, C. M. 2007. Effects of Post-Economic Crisis Globalization on the Development of the Manufacturing Sector.

Economics Journal FE Untar XII / 01. Thing 1-14.

[27] Franken, Robert E. 1998. Human Motivation. Fourth Edition. California: Brooks Cole Pub. Co.

[28] Geofferey Squires "Management as A Professional Discipline"

"Journal of Management Studies", June 2001. [29] Ghozali, Imam & Fuat. 2005. Structural Equation Modeling:

Theory, Concepts and Applications with Lisrel 8.54. Semarang: Diponegoro University Publishing Agency.

[30] G. T. Lumpkin, and Gregory G ... Des "Clarifying the

Entrepreneurial Orientation construct and Linking It to Performance" "Academy of Management Vol. 21 1996.

[31] Hendro and Candra, 2004. Be A Smart and Good Enterpreneur.

CLA Pub. And Bina Nusantara University. [32] Hisrich, Robert D. & Poters, Michael P. 2002. Entrepreneurship.

Fifth Edition. New York: McGraw-Hill Com. Inc.

[33] John Coopey, "Managers' Innovations and the Structuration of Organizations" (Journal of Management Studies May 1998.

[34] Joreskog, Karl & Sorbom, Dad. 1993. Lisrel 8: Structural Equation

Modeling With The Simplis Command Language. Chicago: Scientific Software International.

[35] Kao, J.J. 1995. The Entrepreneurial Organization. New Jersey:

Prentice Hall Int. Inc. [36] Kerlinger, Fred N, 2004. Principles of Behavioral Research.

Yogyakarta: Gajah Mada Univ. Press.

[37] "Hisrich (1985)," Intrapreneurship Strategy for Internal Markets - Corporate, Non-profit, and Government Institution Cases,

"Strategic Management Journal 6, 181-189.

[38] Hisrich, Robert D .; Peters, Michael P .; Shepherd, Dean A, 2005. Entrepreneurship. New York: McGraw-Hill.

[39] Lachman, R. (1980), "Towards Measurement of Entrepreneurial

Tendencies," Management International Review 20 (2), 108-116. [40] Ladish, L.M., Morgan H.L. & Kalianpur, A. 2001. Entrepreneurial

marketing. New York: John Wiley & Sons. Inc.

[41] Long, J. S. 1990. Covariance Structure Models. Newbury Park: Dage Pub.

[42] Lupiyoadi, 2007. Entrepreneurship from mindset to strategy:

handbook on entrepreneurship courses. Jakarta: LPFEUI. [43] Managerial behavior, entrepreneurial style, and small performance

Journal of Small Business Management; Milwaukee; Jan 2003.

[44] McClelland, David C. 1960. The Achiving Societe. Pinceton, NJ: Van Nostrand.

[45] McClelland, David C., J. W. Atkinson, R. A. Clark, and E. I.

Lowell (1976), Motive Achievement. New York: Irvington. [46] _____________, 1999. Motivational Productivity Management, A

Practical Handbook. Geneva: ILO.

[47] Meredith, 2000. Entrepreneurship: Theory and Practice. Jakarta: Binaman Presindo.

[48] Mill, J. S. (1984), Principles of Political Economy with Some

Applications to Social Philosophy, London: John W. Parker, 32. [49] Written on the profession of Management by Peter F. Drucker,

published by President and Fellows of Harvard College, 1998.

[50] Patric M. Kroiser, Louis D. Marino, and K Mark Weaver

"Assessing the properties of entrepreneurial orientation scales: a

multi-country analysis" Entrepreneurship Theory and Practice,

2002.

[51] Peter F. Drucker. (1998). On the profession of Management, President and Fellows of Harvard College, Massachusetts.

[52] Professionals and Paraprofessionals written by Michael J. Austin,

published by Human Sciences Press, 1978. Pre-session edited by Howard M. Vollmer and Donald L. Mills, published by Prentice-

Hall, Inc., Englewood Cliff, New Jersey, 1966.

[53] Raphael Amit, Lawrence Glosten and Eitan Muller "Challenges to Theory of Development in Entrepreneurship Research" Journal of

Management Studies "September 1993.

[54] Rosanna Garcia, Roger Calantone, "A Critical Look at Technological Innovation Typology and Innovation Terminology:

a Literature Review" (the Journal of Product Innovation

Management 2002). [55] Ritha F. Dalimunthe. 2004. Entrepreneurship Culture Development

Program. Faculty of Economics, University of North Sumatra.

From: http://library.usu.ac.id/download/fe/manelola-ritha7.pdf (accesed, March 19, 2008).

[56] Robbin, Steven P. & Coulter, M. 2004. Management, Jild.1 (7th

edition) Jakarta: Indejs Gramedia Group. [57] _______________________. 2008. Management, Jild.1 (7th

edition) Jakarta: Indejs Gramedia Group.

[58] Santrock J.W. 2008. Educational Psychology. (3rd. Ed.) Boston: McGraw-Hill.

[59] Schumacker, Randal E. & Lomax, Richard G. 1996. A Beginner Guide to Structural Equation Modeling. New Jersey: Lawrence

Erlbaum Associates, Inc.

[60] Schneier, Robert, Miccilis et al. (1998) ‘Enterprises Risk Management 'Strategy & Leadership' Risk and management, Mar /

Apr98, Vol. 26, Issue 2.

[61] Segal, Elizabeth E. and Brzuzy, Stephanie. 1998. Social Melfare Police, Program and practice. Itaca, Illinois: F.E. Peacock Pub. Inc.

[62] Setyobudi, Agustin. 2005. Analysis of the Effect of Human

Capital, Economic Capital, and Entrepreneurship Spirit on Member Participation, Business Improvement and Remaining

Business Results and Its Impact on the Welfare of Members in the

Family Teacher Cooperative, Jakarta. Dissertation. Borobudur University.

[63] Sumarni, Anik Tri, 2004, Influence of internal environment and

macro external environment on strategic relations and performance of dairy cattle business in West Java; Dissertation, Padjadjaran

University Bandung.

[64] Singarimbun, Masri & Effendi, Sofian. 1989. Survey Research Methods. Jakarta: LP3ES.

[65] Sumarsono, 2003, Several factors that influence company

performance and satisfaction of internal stakeholders; Dissertation, Padjadjaran University Bandung.

[66] Supomo, 2007. Position of Indonesia in the era of Free Trade and

Direction of Technology Policy. Economics Journal FE Untar XII / 02. H. 198-212.

[67] Suryana. 2006. Entrepreneurship: Practical guidelines for tips and

success towards success. Jakarta: Salemba Empat. [68] Wangxiang. (2001) Technology Innovation Management, Qinghua

University Press, Beijing.

[69] Winardi, 2004. Entrepreneur and entrepreneurship. Jakarta: Kencana.

[70] Yurniwati, 2003, Influence of the business environment and

strategic planning on the performance of manufacturing companies; Dissertation, Padjadjaran University Bandung.

[71] Zhan Jun and Dirk Deschoolmeester, "How to gauge the innovativeness held by an entrepreneur: a conceptually explanatory

framework", Conference proceedings, ICSB 2003, Belfast, UK.

[72] Supporting Documents : Company Letters PT. Binhara Inti Nusa (Complete).