Effect of Business Capital and Family Environment on Entrepreneur Decisions to Open a Pawn Business in Medan City

Oct 13, 2025 by thesweetdesigns.com 79 views

Effect of Business Capital and Family Environment on Entrepreneur Decisions to Open a Pawn Business in Medan City

Introduction

Medan City, the capital of North Sumatra, is a hub for various businesses, including the pawning industry. The pawning business is one of the contributors to employment in Medan City, providing an easy access to fast funds without complicated requirements, making it an attractive option for the community compared to conventional financial institutions (banks). However, behind the ease, there are challenges faced by pawn entrepreneurs in Medan, namely the large business capital needs and lack of family environmental support. This study aims to reveal the effect of business capital and family environment on entrepreneur decisions in opening a pawn business in Medan.

The Importance of Business Capital in a Pawn Business

Business capital is a crucial factor in determining the success of a pawn business. Sufficient capital allows entrepreneurs to build and manage businesses effectively, ranging from the procurement of business premises to the purchase of paid goods. Without enough capital, entrepreneurs will find it difficult to build and run a business. In the context of a pawn business, business capital is essential for purchasing goods to be pawned, managing inventory, and covering operational costs.

The Role of Family Environment in Supporting Entrepreneurial Decisions

Family environmental support also plays an important role in the success of a pawn business. Family support can be in the form of moral encouragement, financial assistance, to social networks that can help entrepreneurs in developing their business. A supportive family environment can provide a sense of security and enthusiasm to continue to fight, which is essential for entrepreneurs to overcome the challenges of running a business.

Methodology

This study uses an associative quantitative approach. The research population is all 33 pawning businesses in the city of Medan, with saturated sampling techniques. Primary data is obtained through the distribution of questionnaires, while secondary data are obtained from literature studies. The data analysis methods used include instrument tests, classical assumptions tests, multiple linear regression analysis, and hypothesis tests.

Results

The results showed that venture capital and family environment had a significant and simultaneous influence on entrepreneur decisions in opening a pawn business in Medan. Determination coefficient test shows a very close relationship between venture capital and family environment with a R value of 0.908. Based on the Adjusted R Square value, it is known that the variable business capital and the family environment contributed 81.2% of the entrepreneurial decision variable, while the other 18.8% were influenced by factors outside the scope of this study.

Deeper Analysis

The results of this study indicate that venture capital is the main factor that encourages entrepreneurs to open a pawn business. Enough capital allows entrepreneurs to build and manage businesses effectively, ranging from the procurement of business premises to the purchase of paid goods. Family environmental support also plays an important role in the success of a pawn business. Family support can be in the form of moral encouragement, financial assistance, to social networks that can help entrepreneurs in developing their business.

Conclusion

Business capital and family environmental support are a very important factor in encouraging and supporting the success of a pawn entrepreneur in Medan. Without sufficient capital, entrepreneurs will find it difficult to build and run a business. Likewise with family support that can provide a sense of security and enthusiasm to continue to fight.

Recommendation

For prospective pawn entrepreneurs, you should prepare sufficient business capital and build good relations with the family to get full support.
The government and related institutions can provide an easily accessible financing program and entrepreneurship training to assist pawning entrepreneurs in developing their business.
Further research needs to be carried out on other factors that influence entrepreneurial decisions in the pawn sector, such as regional economic conditions, government regulations, and business competition.

Resource

[Ministry of Cooperatives and UKM] (https://www.kemenkopukm.go.id/)
[Financial Services Authority] (https://www.ojk.go.id/)
[Central Statistics Agency] (https://www.bps.go.id/)

Limitation of the Study

This study has several limitations. Firstly, the study only focuses on the pawning industry in Medan City, and the results may not be generalizable to other cities or industries. Secondly, the study only considers two factors, business capital and family environment, and other factors that may influence entrepreneurial decisions are not taken into account. Finally, the study uses a quantitative approach, and the results may not provide a comprehensive understanding of the complex issues involved in entrepreneurial decisions.

Future Research Directions

Future research should aim to address the limitations of this study. Firstly, researchers can conduct a study on other cities or industries to generalize the results. Secondly, researchers can consider other factors that may influence entrepreneurial decisions, such as regional economic conditions, government regulations, and business competition. Finally, researchers can use a mixed-methods approach to provide a more comprehensive understanding of the complex issues involved in entrepreneurial decisions.

Conclusion

In conclusion, this study highlights the importance of business capital and family environment in encouraging and supporting the success of a pawn entrepreneur in Medan. The results of this study provide valuable insights for prospective pawn entrepreneurs, policymakers, and researchers. By understanding the factors that influence entrepreneurial decisions, we can develop effective strategies to support the growth and development of the pawning industry in Medan City.
Frequently Asked Questions (FAQs) about the Effect of Business Capital and Family Environment on Entrepreneur Decisions to Open a Pawn Business in Medan City

Q: What is the main challenge faced by pawn entrepreneurs in Medan City?

A: The main challenge faced by pawn entrepreneurs in Medan City is the large business capital needs and lack of family environmental support.

Q: What is the role of business capital in a pawn business?

A: Business capital is a crucial factor in determining the success of a pawn business. Sufficient capital allows entrepreneurs to build and manage businesses effectively, ranging from the procurement of business premises to the purchase of paid goods.

Q: What is the importance of family environment in supporting entrepreneurial decisions?

A: Family environmental support plays an important role in the success of a pawn business. Family support can be in the form of moral encouragement, financial assistance, to social networks that can help entrepreneurs in developing their business.

Q: What is the relationship between business capital and family environment in influencing entrepreneurial decisions?

A: The results of this study show that business capital and family environment have a significant and simultaneous influence on entrepreneur decisions in opening a pawn business in Medan. Determination coefficient test shows a very close relationship between venture capital and family environment with a R value of 0.908.

Q: What is the contribution of business capital and family environment to entrepreneurial decisions?

A: Based on the Adjusted R Square value, it is known that the variable business capital and the family environment contributed 81.2% of the entrepreneurial decision variable, while the other 18.8% were influenced by factors outside the scope of this study.

Q: What are the implications of this study for prospective pawn entrepreneurs?

A: For prospective pawn entrepreneurs, you should prepare sufficient business capital and build good relations with the family to get full support.

Q: What are the implications of this study for policymakers and related institutions?

A: The government and related institutions can provide an easily accessible financing program and entrepreneurship training to assist pawning entrepreneurs in developing their business.

Q: What are the limitations of this study?

A: This study has several limitations. Firstly, the study only focuses on the pawning industry in Medan City, and the results may not be generalizable to other cities or industries. Secondly, the study only considers two factors, business capital and family environment, and other factors that may influence entrepreneurial decisions are not taken into account. Finally, the study uses a quantitative approach, and the results may not provide a comprehensive understanding of the complex issues involved in entrepreneurial decisions.

Q: What are the future research directions?

A: Future research should aim to address the limitations of this study. Firstly, researchers can conduct a study on other cities or industries to generalize the results. Secondly, researchers can consider other factors that may influence entrepreneurial decisions, such as regional economic conditions, government regulations, and business competition. Finally, researchers can use a mixed-methods approach to provide a more comprehensive understanding of the complex issues involved in entrepreneurial decisions.

Q: What are the resources that can be used to support the growth and development of the pawning industry in Medan City?

A: The resources that can be used to support the growth and development of the pawning industry in Medan City include the Ministry of Cooperatives and UKM, Financial Services Authority, and Central Statistics Agency.

Q: What are the recommendations for further research?

A: Further research needs to be carried out on other factors that influence entrepreneurial decisions in the pawn sector, such as regional economic conditions, government regulations, and business competition.