Analysis of the Selection of Starting a Business Method for Small and Medium Business Actors Associated with the Profitability of New Businesses for the Period of 2020

Abstract

This study aims to determine the preferences of entrepreneurs in starting new businesses, namely whether to use the causation approach or the effectuation approach that occurs in 2020 and henceforth the choice of the method of starting a business is associated with business profitability. The research method used in this study is a survey research method of 250 SME’s respondents who obtained People's Business Credit (KUR) from State’s own Bank (Bank BUMN). The variables examined in this study are the method of starting a business approach, business motivation (necessity entrepreneur and opportunity entrepreneur), capital adequacy, business opportunity analysis, market potential analysis, management team, business profitability. The results show: First, small and medium business, which became the research sample, preferred the effectuation approach when starting a new business in the era of the Covid pandemic. approach when starting a new business. Third, better business profitability in the group using the causation approach is thought to be caused by capital adequacy, a more in-depth analysis of business opportunities and market potential analysis, and having a management team to run the business.