The Success of Small Craft Businesses Depends on Motivation, Business Skills, and Product Innovation

Abstract

Business success is one of the key indicators for assessing the sustainability and competitiveness of Micro, Small, and Medium Enterprises (MSMEs). However, craft MSMEs in Bogor City still face various challenges related to business capabilities, motivation, and product innovation, so business success is not yet optimal. This study aims to analyse the impact of business capabilities and motivation on business success through product innovation as an intervening variable in craft MSMEs in Bogor City. The research uses a quantitative approach with descriptive and verificative methods. The research population is all craft MSMEs registered with the Bogor City Cooperative and MSME Office, with a sample of 142 respondents selected using purposive sampling. Data was collected through questionnaires, interviews, observation, and document studies, then analysed using path analysis with the help of IBM SPSS Statistics and a Sobel test to examine mediation effects. The research results show that business capability and business motivation have a positive and significant impact on product innovation. In addition, business capability, business motivation, and product innovation also positively and significantly affect business success. The Sobel test results proved that product innovation can mediate the influence of business capability and motivation on business success. These findings suggest that improving business skills and motivation, supported by product innovation, can enhance the success of MSME craft businesses in Bogor City