The Quality of Small and Medium Enterprises Performance Using the Structural Equation Model-Part Least Square (SEM-PLS)

Abstract Improving the quality of performance of Small and Medium Enterprises (SME) requires an entrepreneurial behavior approach, so this paper aims to explore, analyze and test Entrepreneurship behavior on the performance of small and medium enterprises and find the role of moderating entrepreneurial knowledge of small and medium business owners in Medan, to overcome the dynamics of the Revolution 4.0 is a threat to SME in the city of Medan, so that SME can increase the potential of entrepreneurial behavior in moving businesses to survive in a malicious era. The research approach used is the analysis of case studies on SME, which operate in the city of Medan. This study used a sample of 210 as SME owners, with a data analysis approach using the Structural Equation Model Part Least Square (SEM-PLS). The results of this study indicate that entrepreneurial behavior has a positive effect on the performance of SME, indicators that have the potential to be improved are work ethic, motivation, business instincts, unyielding creativity, initiative, energetic, and entrepreneurial knowledge are very important benchmarks to strengthen SME performance, The originality of this research is one model of quality of business performance with a behavioral approach and the role of moderating entrepreneurial knowledge is very important for SME owners, so it is important for small and medium entrepreneurs not to understand the concepts and practices of entrepreneurship to improve SME Human Resources.