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The Government of Indonesia is currently working to develop small and medium enterprises (SMEs) in order to be used as a prime mover in accelerating the recovery of the economy Indonesia. Furthermore SMEs are also very beneficial to the entrepreneur himself where he can improve his prosperity. Therefore need to be excavated factors what factors can determine the SMEs. This research aims to know the factor that can determine the development of SMEs. The factor being measured include individual characteristics factors, SMEs characretistic factors and contextual variables, where the factors described in 39 variable. The population in this study was small and medium business owners in the area of Surabaya with characteristics that correspond to the category of SMEs. The technique of sampling purposive sampling technique was done. From 100 respondents planned, only 78 questionnaires to be tested further. This research used discriminant analisys in order to test the researh hypothesis. The results showed that 39 of the variables analyzed, it turns out there are only 13 variables that significantly influence the development of SMEs in Surabaya. The variable is the Willingness of hard work (hardworker), confidence, Willingness to learn, ambition to go forward, the intelligent to communicate, the proximity of the location with the industry, the ease of obtaining new markets, information on competitors, business opportunities, product development information, ease of access to capital, support the Government's policy, and the ability to manage financial.
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