297 1163 1 PB

IJRS: International Journal Reglement & Society
Building a Business Model for Micro, Small and Medium Enterprises

(MSME) after the Covid-19 Pandemic
(Case Study of MSME Fried Onions UMI 4 R Kitchen)
Volume 4 Issue 1 Year 2023 (Nurlinda, N.Novita, V., Siregar, D, A.,Hanum, Z., Hiya, N.,
Building a Business Model for Micro, Small and Medium Enterprises (MSME)
after the Covid-19 Pandemic (Case Study of MSME Fried Onions UMI 4 R
Kitchen)
Nurlinda1), Vivianti Novita2, Dina Arfianti Siregar3, Zulia Hanum4, Nirmadarningsih

Hiya5),
1,2,3,5
Politeknik Negeri Medan, Medan
4
Universitas Muhammadiyah Sumatera Utara
1,
email: nurlinda@polmed.ac.id zuliahanum@umsu.ac.id
Abstract
This research provides an overview of Micro, Small and Medium Enterprises (MSMEs) that will build
and are starting a business, so they can obtain simple information to design a business model
according to the intended market segment. The purpose of the business planning model canvas is to
get information about the best planning for a business if it is applied as an appropriate technology
and model in MSMEs. The long-term goal of this research is to provide literacy to MSMEs on how to
develop a business model concept that is that is easy, simple and complete. This research will also
contribute to new and pioneering MSME actors in designing business models before building a
business. This will help MSMEs in mapping each business segment, so that potential risks can be
found early on and the solutions needed. The long-term business model design will serve as a guide
and help MSMEs survive crisis such the COVID-19 Pandemic, so that they are not shaken
immediately when the crisis comes. This research is a qualitative research. Data collection
techniques were carried out using a combination of interviews and Group Discussion Forums. Data
analysis used descriptive analysis and BMC matrix. The results of the study that BMC for fried onion
MSMEs UMI 4R Kitchen can be concluded that of the nine BMC elements, there are six elements that
must be improved, namely Customer Segment elements, Channel Elements, Value Propositions
Elements, Key resources elements, Key partners elements; and cost structure elements.
Keywords: BMC, Bisnis Model Canvas, MSME
How to cite:
Nurlinda, N.Novita, V., Siregar, D, A.,Hanum, Z., Hiya, N., (2023), “Building a Business Model for Micro, Small and
Medium Enterprises (MSME) after the Covid-19 Pandemic (Case Study of MSME Fried Onions UMI 4 R Kitchen)”, IJRS:
Internasional Journal Reglement Society Vol 4 (1), Pages 1-17
INTRODUCTION
The Indonesian economy is currently at a low point as a result of the global outbreak of the
COVID-19 pandemic since early 2020. The COVID-19 pandemic has devastated all aspects of life
including business sector,1 has also caused various business sectors to suffer losses to bankruptcy
including MSMEs.2 MSMEs during the COVID-19 pandemic became the most vulnerable sector due
to decreased demand, supply chain, cash flow, raw materials, etc. due to physical distancing policies,
1
Sheth, J. “Business of Business Is More than Business: Managing during the Covid Crisis.” Industrial Marketing
Management, 8, (8) (2020): p.261–264.
2
Nurlinda, Erlina, Maksum, A., & Bukit, R. (2020). Can risk management improve the quality of local government’s financial
statements? International Journal of Innovation, Creativity and Change, 6
1
stay at home until lockdown/quarantine. 3 Kominfo (2021) released the problem of SMEs in Indonesia
which include limited capital and still traditional technology, non-standard product and packaging
quality, limited marketing reach, lack of information about packaging, difficulty getting suppliers
according to their needs, lack of equipment facilites, lack of human resources and lack of innovation.
Apart from SMEs problem, Kominfo in 2021 also released several changes in consumer behavior
during COVID-19 pandemic where greater feelings of anxiety and depression emerged after the
pandemic passed, loss of confidence in the cleanliness of people and products (contactless lifestyle),
limiting travel, going out and in country, optimizing work from home, increasing tension and conflict
at various levels, changing careers/jobs, getting used to going home and sending various goods,
limited contact with parents, added value to consumer immunity. This change in consumer behavior
has an impact on MSME business. During the COVID-19 pandemic, many business collapsed but
new business were also formed with innovatiove new business models, giving rise to new hopes for
the growth of the economic sector.
One of the hopes of the recovery of the Indonesian economy is through the revival of the
Micro, Small and Medium Enterprice/MSMEs (UMKM) sector, 4 because despite the decline in the
MSME sector, MSMEs are still able to support the people’s economy during the COVID-19
Pandemic.5 This shows that MSMEs are the Backbone of the Indonesian Economy because MSMEs
have an important and strategic role to support national economic development. 6 This is according to
information from the Ministry of Cooperatives and Small and Medium Enterprises (Kemenkop UKM)
which shows the number of MSMEs in Indonesia is 64.2 million. MSMEs contributed Rp.8,673.89
trillion or 61.07%. The important role of MSMEs which is very significant is being able to absorb a
workforce of 97% of the total workforce and MSMEs have the ability to collect investment of 60.42%
of total investment in Indonesia. This data illustrate the important role of MSMEs in Indonesia’s
economic development.
The role of MSMEs as the backbone of the economy is based on a) MSMEs business actors
are numerous and spread to remote ares; b) the potential of MSMEs in opening employment
opportunities and increasing income through the quality and creativity of MSMEs; c) as a supporting
asset for the country’s development because the MSMEs business is dominant in the agricultural
sector; d) The education level of MSME entrepreneurs does not have to be high, so that all people are
able to become MSMEs actors; e) the ability of MSMEs to survive; f) is the starting point for
investment in rural areas and is a labor-intensive platform to increase entrepreneurial skills; g) The
products provided are relatively inexpensive; h) The types of MSME business are flexible and
diverse; i) MSMEs are able to adapt quickly to keep up with the times. 7
The importance of the role of MSMEs does not make MSMEs risk-free. Risk is defined as
uncertainty resulting in loss. Risk categories include: operational risk, dangerous risk, financial risk,
strategic risk and others. 8 MSMEs have risks in uncertain conditions such as during the COVID-19
pandemic, so it is important to apply risk management to all sectors. 9 So far, the establishment of
3
Pantailosari. (2020). Mendukung Keberlanjutan Usaha UMKM Saat dan Pascapandemi. Www.Diskop.Id
4
Mariana, H. (2022, February 4). Pentingnya Peran dan Kontribusi UMKM dalam Pemulihan Ekonomi Indonesia.
Https://Money.Kompas.Com/. https://money.kompas.com/read/2022/02/04/070800426/pentingnya-peran-dan-
kontribusi-umkm-dalam-pemulihan-ekonomi-indonesia?page=all
5
Nurlinda, Erlina, Maksum, A., & Bukit, R. (2020). Can risk management improve the quality of local government’s financial
statements? International Journal of Innovation, Creativity and Change, 6
6
Sarwono, H. A. (2015). Profil Bisnis Usaha Mikro, Kecil Dan Menengah (Umkm). In Bank Indonesia dan LPPI.
7
Mariani, Op.Cit.,
8
Susanto, A., & Meiryani. “The importance of risk management in an organizations”. International Journal of Scientific and
Technology Research, 7(11), (2018): p.103–107.
9
Ahmeti, R., & Vladi, B. “Risk Management in Public Sector : A Literature Review”. European Journal of Multidisciplinary
Studiesi, 8385(2017): p.324–330.
2
MSMEs tend not to go through business studies or business models. A business model is a
framework for a business plan by conceptualizing how a business components. The business model
will ideally take into account all aspects including economic predictions; future business trends;
competitor’s movements; technology advances; financial projections; and changing customer needs.
However, this business model will be different when faced with uncertain conditions where economic
conditions are uncertain and the target market also changes. This condition of uncertainty increases
the potential for MSMEs to be unprepared to run a business like it is today when the outbreak of the
COVID-19 pandemic.
The business model undertaken is not only intended to map risks. In general, risk is a
potential, both the potential to bring losses and profits. During the COVID-19 pandemic, not all
MSMEs suffered losses, but the data also recorde several innovations that had an impact on the ability
of MSMEs to survive and even grow. The ability of MSMEs to adapt during the COVID-19
pandemic has caused the MSME sector to have a positive value so that its turnover has doubled.
Although, restrictive policies such as PPKM, cause limited community mobility. However, when
MSMEs are able to find ways to keep business operations running and find alternatives such as
utilizing online transactions, this causes MSMEs to be able to maintain competitiveness through
digitization, utilizing technology and online applications.
The weakness of MSMEs during the pandemic is that they tend to focus on cost efficiency
rather than increasing income or increasing innovation, causing MSMEs to ignore investment
alternatives but tend to maintain their resources. 10 In several cases it was found that Micro, Small &
Medium Enterprises (MSMEs) chose bankruptcy rather than face bigger financial problems in the
future. MSMEs that have the most impact on COVID-19 are MSMEs that is related to the home
industry sector. 11 One of the reasons why MSMEs have to stop operating is the disruption of supply,
transportation and distribution chains.
Opportunities that can be utilized by MSMEs during the COVID-19 Pandemic are changes in
consumer behavior. During the pandemic, the market immediately turned into an online market. 12
This is in line with the increasing trend of internet users reaching 175.4 million in 2020. Threats for
business actors can come from policies implemented by the government, such as an effort to tackle
COVID-19. However, this policy ultimately increases the use of technology and online applications,
where with an application on a smartphone, online transactions can be carried out so that distance is no
longer a problem. The emergence of online transportation such as Gojek and Grab has also
increasingly triggered a direct market change to online articles. Through this application, customers
do not need to meet face to face with the seller or come directly to the seller, but orders can be
received directly by the customers. This application brings sellers and customers closer so that it has
an impact on increasing customers and ultimately increasing sales. The use of technology ultimately
helps MSMEs in improving their business performance even during the pandemic. This shows that
companies that have invested in technology from an early age have the strength to survive.
From this description, it can be seen that when MSMEs build their business, they are equipped
with a business model, which shows the readiness of MSMEs with mapped alternatives so that when
shocks occur, MSMEs can immediately implement them to maintain their business. One business
model that is simple and easy for SMEs to develop is the Business Model Canvas (BMC). The use of
BMC will make it easier for MSMEs to map the big picture of the business and MSMEs are able to
10
Thorgren, S., & Williams, T. A.). Staying alive during an unfolding crisis: How SMEs ward off impending disaster. Journal of
Business Venturing Insights, 14(May).
11
Susilawati, S., Falefi, R., & Purwoko, A. Impact of COVID-19’s Pandemic on the Economy of Indonesia. Budapest
International Research and Critics Institute (BIRCI-Journal): Humanities and Social Sciences, 3(2), (2020): p.1147–1156
12
Donthu, N., & Gustafsson, A. (2020). Effects of COVID-19 on business and research. Journal of Business Research,
117(2020): p.284–289
3
identify important points from all aspects. BMC is a tool that can streamline business planning and
minimize error and risks during business execution. BMC covers nine business aspects consisting of :
customer segment; value proposition; channel; customer relationship; revenue streams; key resources;
key activities; key partners; cost structure.13 If all of these aspects are included in the BMC, of course
the business that is built will have a fairly good business map and have an impact on the readiness of
MSMEs to survive in conditions of uncertainty such as during the COVID-19 Pandemic.
Some research results show that BMC can be used to develop business models for SMEs as
was done by Mahdi & Baga, (2018) for Seaweed Processing Companies in determining business
management plans for Fried Edamame Soybeans, 14 Wijayanti & Hidayat, 15 as a Strategy to Strengthen
MSME Snack Food Competence in Kebumen Regency, and Athia et al., to encourage an
entrepreneurial mindset among students at the Islamic University of Malang, Central Java. The
results of research by Euis et al., on KNM Fish Firm business stated that BMC has nine elements that
are important in helping identify business models, identify elements that require business models,
identify elements that require improvement and business continuity in the future. Rukka et al., (2018)
who conducted research on CV.OAG which produces spinach chips, found that BMC can also be used
as a tool to recommend proposed new business model designs to be implemented by one of
CV.OAG’s business units. The results of research conducted on CV.Bandung Ceramic Kandura by
Permadi et.al., (2016) found that out of 9 BCM indicators there are 7 suggested improvement
indicators, namely, 1) segmentation formation; 2) cooperation between companies and art activists to
form a contemporary ceramics community; 3) establish a personal website; 4) cooperate with supplier
partners, couriers, investors, as well competent experts; 5) register the product; 6) establish a
subdivision of quality control and coloring techniques; and 7) recruiting potential human resources.
Literature Review
Micro, Small and Medium Enterprise (MSME)
The definition of MSMEs according to Law No.20, year 20028 concerning Micro, Small and Medium
Enterprises (MSMEs) states that micro-entreprises are productive businesses owned bay people or
individuals or individual business entities, while small businesses are productive economic businesses
that stande alone, carried out by individuals, not a subsidiary, not a branch of a company owned, and
not a direct or indirect part of a medium or large business, and a medium business is a productive
economic business that stands alone, is carried out by individuals, is not a subsidiary, is not a branch
of a company owned, and not be a direct or indirect part of a small or large business. MSMEs in terms
of turnover have the following criteria :
Table 1 Criteria for SMEs
Business Size Criteria
Asset Omzet
(does not include land & building) (in 1 year)
Micro Maximum 50 million Rupiah Maximum 300 million Rupiah
Business
Small More than 50 million – 500 million More than 300 million – 2,5
Business Rupiah billion Rupiah
Middle More than 500 million – 10 billion More than 2.5 billion – 50
13
Osterwalder, A., & Pigneur, Y. Business Model Generation. Elex Media Komputindo
14
Herawati, N., Lindriati, T., & Suryaningrat, I. B.. “Penerapan Bisnis Model Kanvas Dalam Penentuan Rencana Manajemen
Usaha Kedelai Edamame Goreng”. Jurnal Agroteknologi, 13(01), (2019): p. 42.
15
Wijayanti, N., & Hidayat, H. H. “Business Model Canvas (BMC) sebagai Strategi Penguatan Kompetensi UMKM Makanan
Ringan di Kabupaten Kebumen, Jawa Tengah”. Jurnal Agroindustri Halal, 6(2), (2020): p. 114–121
4
business Rupiah billion Rupiah

Source : Law Number 20 of Year 2008
Business Models
Business models are different from feasibility studies or business plans which are usually taught in
entrepreneurship subjects. A business plan is prepared in great detail, but does not accommodate and
fulfill all the aspects needed to run a business. 16 The business model is defined as a model that
explains and describes how a company can move and develop to make a profit. In general, a business
model is a a tool used to turn a business idea into a business. A business model is an attempt to
simplify complex business realities into easy-to-understand main elements17 defines a business model
as an effort by a business to design and run its value creation and revenue creation business. The
business model shows the relationship between excellence and the resources owned by the company
excellence and the resources owned by the company, as well as the activities carried out to acquire and
create value, which makes the company able to generate profits.
Business Model Canvas (BMC)

BMC is one of the tools to help entrepreneurs see more accurately the type of business that is
being or will be undertaken. This tool looks at the business from the big picture, complete and
detailed about the key elements about the business. BMC provides a complete picture that really
helps a business in mapping out its business. BMC evaluates each of the key business elements,
making it easier for entrepreneurs to analyze inaccurate elements, and in the end can take steps to
achieve business goals. 18 A framework that discusses business models presented in a visual form in
the form of canvas paintings, so that they can understood and understood easily. The BMC concept
seeks to incorporate fragmented constructs into a business model. The BMC concept seeks to
incorporate fragmented constructs into a business model
The Business model canvas (BMC) has advantages in business model analysis, namely being
able to describe in a simple and comprehensive manner the current condition of a company based on
consumer segments, value offered, value offering channels, customer relationships, revenue streams,
vital assets, cooperation partners, as well as its fee structure. BMC helps developing business plans for
budding entrepreneurs and have a more holistic understanding of their business. Introduce the concept
of a business model that everyone can understand, starting from the same point and talking the same
thing, with concepts that are simple, relevant, and intuitive to understand, while not oversimplifying
the complexities of how companies function. The Business Model Canvas is a business model
consisting of nine blocks of business activity areas outlined on one canvas sheet. The nine blocks
include: Customer Segments, Value Propositions, Channels, Customer Relationships, Revenue
Streams, Key Resources, Key Activities, Key Partnerships, and Cost Structures. These nine blocks
are the elaboration of the four main pillar designs that must exist in a business consisting of : offers,
customers, infrastructure, and finance.
As the creator of the Business Model Canvas, makes a list of client segments that are business
targets, such as, a)The value proposition that makes clients choose a business; b) The relationship that
has been established with the client; c) Responsive and professional customer communication; d)
Actions taken to help customers; e) Primary key resources including physical and intellectual
16
Athia, I., Saraswati, E., & Normaladewi, A.. Penerapan Business Model Canvas (Bmc) Untuk Mendorong Mindset
Kewirausahaan Di Kalangan Mahasiswa Universitas Islam Malang. Jurnal Ketahanan Pangan, 2(1), (2018): p.66–75
17
Casadesus-Masanell, R., & Ricart, J. E. (2010). From Strategy to Business Models and onto Tactics. Long Range Planning,
43(2–3)
18
Massepe, A. N. B. (2017). BUSINESS MODEL Bagi mahasiswa program wirausaha. ResearchGate, October, 0–22
5
property; f) Partners in running the business; g) Cost structure covering the entire business analysis.
The elements / aspects of the Business Model Canvas (BMC).
Customer Segments
Segments or components that describe a group of different people or organizations that the company
wants to reach or serve.19 Customer segments are segments that determine the target customer
segment of the production to be developed (Herawati et al.,2019). A customer group can be called a
market segment if, a) Requires separate services (value propositions) due to specific problems and
needs; b) Reached and served with different distribution channels, c) Need different customer
relationship approaches, d) Provide different benefits, e) Have different ability to pay according to
perception of the value they receive.
Value Propositions
Segments or components that describe a combination of products and service that create
superior value for specific customer segments. 20 Value Propositions estimate customer needs that
have been identified in customer segments. 21 Excellence describes the combination of goods sold and
service to customers. The value offered must be unique in order to differentiate it from competitors.
Excellence must be the uniqueness that determines why the product or service offered deserves to be
chosen by customers, answering wants and needs and being able to solve customer problems through
the products or service offered, so that it becomes a product that customers desire. Several elements
that contribute to the formation of superior value (value proposition) are: a) Newness; b) Performance;
c)Customization; d) Completing the job (Getting the Job Done); e)Design; f) Brand/Status; g) Price;
h)Cost Reduction; i)Risk Reduction; j)Accesibility; k)Convenience/Usability.
Channels
Segments or components that describe how a company communicates with its customer
segments and reaches them to realize this superior value. Channels are a way to reach customers.
Channels are the methods used to provide our superiority/value proposition to consumers. Channels
can also be called how we convey products to consumers. Channels which include direct
communication, distribution and sales channels become a link that bridges companies and customers.
Thus it can be concluded that the channel is a place to deliver products / services (superior value) to
the target market. However, the company must consider its internal capabilities and consider the
consumer behavior of the intended target market. Channel functions in BMC formula include: a)
1.Increasing customer awareness of the company’s products and services; b) Help customers evaluate
the company’s superior value; c) Allow customers to buy specific products or services. d) Provide
superior value to customers; e) Provide after-sales support to customers.
In simple terms, channels can be divide into two categories, namely channels owned by
partners (other people). Having a shop, having your own sales force, or selling via your own website
are examples of your own channels, while channels that use partner services such as freelancers,
agents, resellers (other people’s shops), use minimarkets, online websites and others.
Customer Relationships
19
Ibid.,
20
Ibid.,
21
Herawati, Op.Cit.,
6
Segments or components that describe the types of relationships built specifically by the
company with customer segments. 22 Customer Relationships are defined as the relationship between
the business sector and customers (Herawati et al.,2019). Efforts to build relationships with
customers with the aim of getting new customers (retention), and offering old and new products or
services to exisiting customers (upselling). Customer relationship is a way to get, increase the number
of consumers and to retain consumers. This relationship is intended to continue to be loyal to us by
creating good relationships with customers, a place to continue to be in touch and further strengthen
relationships with our customers. Customer relations can be summed up explaining how your
business interacts with potential customers.
Revenue Streams
Segments or components that describe the cash or cash flow that the company generates from
each segment or the sources of income that the company will get from the business model. Revenue
streams represents the path of receiving money that will be received from each customer segment
Revenue Stream is part of determining which business processes generate profit and how much
customers are willing to pay in return for the services or goods that he business provides. Revenues is
the company’s source of income and how the company earns income/profit. Company can design two
types of income that can be designed, namely, a)Transaction income generated from one payment; b)
Recurring income. In addition to this income, the company can design other income such as assets
sales; usage cost; subscription fee; rent; license; intermediary services; commission and advertising
costs.
Key Resources
The main resource segment or component describes the most important assets needed for a
business model to function. Key resources are the main resources that explain the most important
assets needed in creating a business model (Herawati et al.,2019). Key Resources describes all the
crucial resources needed to ensure that the value and business model are delivered optimally to
customers. Resources include: a)Physical Resources; b) Intellectual Resources; c) Human Resources;
d) Financial Resources;
Primary resources are devoted to carrying out key activities that help entrepreneurs offer
superior value, reach markets, build relationships with market segments and earn revenue. Main
resources in physical form in the form of technology, machines or equipment; financial;
intellectual/human. The questions that can be asked are as follows :
Key Activities
Segments or components are key activities showing the most important things a company
must do so that its business model can be realized correctly. The main activity is the main business
activity carried out The main activity describes the most important operational activities that must be
carried out by the company so that the value and business model are optimally conveyed. The main
activities will vary depending on the number of industries and types of business which include aspects
that generate superior value, deliver superior value to customers, activities to handle revenue streams.
The main activities of the company are divided into three activities: 1) Production operation activities;
2) Service operation; 3) Platform and networks. 23
Key Partners,
22
Massepe, Op.Cit.,
23
Herawati, Op.Cit.,
7
Segments or components represent a network of suppliers and partners involved in our

business model. Key partners are partnership keys that describe a network of suppliers and partners.
Key partners describe the network of suppliers and partners that make the business model function
effectively and efficiently. Key Partners describes the network of suppliers and partners that make the
business model function effectively and efficiently. Key partners include: a) Collaborations that must
be forged in order for the business to operate; b) Looking for a reliable partner when not getting the
value offered. The reasons for partnering can be summarized as follows: a) to achieve the objective of
optimizing our company’s operations; b) partnerships are built with the aim of obtaining resources that
are not owned; c) 3.partnerships are built with the aim of gaining organizational knowledge, d)
4.partnerships are for market acquisition purposes, either to develop or open new markets. 24
Cost Structure
Segments or components that describe a network of suppliers and partners involved in the
business model. Cost structure is a cost structure that describes all costs incurred in a business. The
Cost Structure is basically the costs that arise for all business activities and resources. Expenses
include expenses that are necessary for the business to run. For example: raw material costs,
employee salaries, promotion costs, rental fees, licensing fees, insurance costs, reseller commissions
and others. This segment describes the costs that arise when operation certain business models
including : a) Creating and delivering value; b) Maintaining customer relationships; c) Generate
revenue that causes costs. 25
The following describes the nine segments of Business Model Canvas (BMC):
Figure 1 Nine BMC Segments

Source: KOMINFO (2022), Murray & Scuotto, (2020)
Methods
This research is a qualitative research using primary data sources collected through observation and
interviews with key informants. The observed/measured variables include Customer Segments;Value
Propositions; Channel; Costomer Relationships; Revenue Streams; Key Resources; Key Activities;
Key Partners; Cost Structure.
24
Ibid.,
25
Ibid.,
8
Figure 2 Business Model Canvas

Source:
The technique for determining key informants uses purposive sampling. Determination of
respondents based on certain characteristics which are the main characteristics of respondents with the
following criteria :
Table 2. Determination of the Number of Key Informants
Method of collecting data Rule of Thumb
Interview key informants Interview about 5 people
Deep interview Interview about 30 people
FGD Form a group of 5-10 people. For example, if you want to

conduct FGDs with groups of men and women in 3
different age categories, consider holding 6 FGDs with
each gender having 3 different age groups.
Ethnographic Survey Choose a fairly large and representative sample

(purposeful or random depending on the purpose) with an
amount that is more or less like quantitative research.
Referring to the table above, the key informants in this study consisted of owners, staff and
customers, totalling 7 key informants in the UMI 4R Kitchen friend onion business. Test results are
written in the business model canvas. The model used in this study can be described as follows:
Data collection
Problem identification Business Model Design
Error model
Business Model Evaluation

Business Model Analysis
Model OK
9
Pelaporan
Figure 3 Concept Framework

Explanation:
a. Mapping each segment of the business model canvas
b. Collecting data by making initial hypotheses and then confirming it to key informants directly and
indirectly (on line). Confirmation is done by testing the problem and testing the solution to key
informants.26
c. Designing a Business Model by mapping the fried onion business model for MSME Fried onions,
namely, a) Determine the segment/target market; b) Formulate a value bid; c) How is it distributed;
d) How to get and retain customers; e) Sources of income that can be obtained; f) What are the
main resources; h) Anyone who becomes a Partner; and i) What is the fee structure
d. Furthermore, the business model that has been mapped is analyzed and evaluated.
e. Compile BMC results after evaluation.
Data Collection and Analysis Techniques

The data collection and analysis techniques used in the plan to determine the fried onion business
model refer to the theory of,27 namely : Mengumpulkan semua data yang diperoleh dari berbagai
sumber melalui wawancara.
1. Collect all data obtained from various sources through interviews.
2. Data reduction, making abstractions in the form of a summary of the essence of the research,
processes, and statements that are in accordance with the research objectives.
3. Categorization where researchers are required to organize data into categories based on views,
opinions or certain criteria.
4. Checking the validity of the data to show that the contents of the research data are truly original or
valid by using triangulation technique. Data were analyzed using descriptive analysis. Descriptive
analysis describes the process of designing and building a BMC Business Model using nine
segmentations.
Results And Discussion

Research Result
Business Model Canvas (BMC) is a framework that can be used by entrepreneurs to discuss business
models that are presented visuallya in a painting canvas so that entrepreneurs can easily understand
and understand them. BMC is easy to apply considering that a business is so dynamic that BMC can
assist entrepreneurs in creating value and evaluating value when a business faces changes between
competitors in the world of industry and similar products. BMC is a business model that can be
applied by entrepreneurs, including MSME business actors. The Umi 4R Kitchen Fried Onion
Entrepreneur is one of the small business actors, but so far there has been no evaluation conducted by
the entrepreneur regarding the business being run. Products made from onions are packaged properly.
However, an effort is very important in mapping every aspect of its business so that an overview of the
business journey is obtained and to map opportunities for business improvement that can be carried
out.
26 TM
Blank, S., & Dorf, B. (2012). The Startup Owner’s Manual The Step-by-Step Guide for Building a Great Company. K and S
Ranch Inc., K&S Ranch Publishing Division
27
Moleong, l J. (2012). Metodologi Penelitian Kualitatif. PT Remaja Rosdakarya
10
Figure 4 UMI 4R Kitchen Fried Onion Products
Through this research, business evaluation can be carried out through nine elements. These
nine elements can map the business trip that has been carried out. The following is the BMC matrix
for the Umi 4R Kitchen Fried Onion business.
Discussion
Customer Segments
Market segmentation is a segment or component that describes a group of different people or
organizations that the company wants to reach or serve. Customer segments are segments that
determine the target customer segment of the production to be developed. Questions that arise such as
1)Who is the target of your product?; 2)Why them?: 3)Is the product being offered to the right
people?; 4)Will the customer buy your product? Of course, it requires an answer.
In BMC 1, which was carried out before conducting the survey, for the consumer segment
elements, the target market was for all people, but in the BMC 2 model, after the survey was carried
out, there was a change that the market segementation was retail and others. After conducting direct
interviews, it can be traced that the others are housewives who are health conscious in the upper
middle class family category. The products produced are in accordance with health-conscious
consumers because the Umi 4R Kitchen Fried Onion product is a product without flour, without
flavorings and preservatives, hygienic and halal, but the product price offered is Rp.30,000 per 100
gram.
In addition to the survey results, we also asked key informants questions about market
segments. The question is “In your opinion, which other market opportunities can be targeted by
the Umi 4R Kitchen Fried Onion product?”
Key informant’s answers indicates that Umi 4R Kitchen’s Fried Onion business still has
opportunities for consumers in traditional markets, entering the restaurant market, cafes that many
people know through social media, large supermarkets, other culinary businesses, housewives, and
can develop foreign markets. These results indicate that the sales of Umi 4R Kitchen Fried Onion
products are still limited in segmentation, plus the pandemic period which makes it difficult for
processed food products to be the last choice when their main needs have been met.
Value Propositions
Segments or components that describe a combination of products and services that create superior
value for specific customer segments. Value Propositions estimate customer. needs that have been
identified in customer segments (Herawati et al.,2019). Excellence describes the combination of
goods sold and service to customers. The value offered must be unique in order to differentiate it from
11
competitors. Excellence must be the uniqueness that determines why the product or service offered
deserves to be chosen by customers, answering wants and needs and being able to solve customer
problems through the products or services offered, so that it becomes a product that customer desire.
In the context of buildings this business model canvas, the things that need to be considered in
building our superior value are the two components that will materialize, namely the main activities
(key resources) and key partners (key partnerships).
In BMC 1, which was conducted before conducting the survey, for the Value Propositions
element, product superiority consists of quality raw materials, products processed without flour,
without flavouring, without preservatives with a crunchy and savory taste and can last for 6 months
and also at an economical price. Besides that, other advantages are in the after sales service (delivery
orders) and handling customer complaints.
In the BMC 2 model, after the survey was carried out, there were changes so that value
propositions in the implementation of sales could be made both directly and via pre-orders. With the
two sales methods, the Umi 4R Kitchen Fried Onions product can meet fixed customer requests such
as shops, supermarkets and direct retail and can also fulfill customer requests through social media.
Sales through pre-orders will help MSMEs in managing and controlling costs, especially production
costs because costs are available according to customer orders because buyers can first see a tester or
catalog of the product to be purchased, then place an order as well payment for the new product being
produced. Pre-order sales provide an illustration to customers that goods will be available at any time
according to customer orders.
In addition to the results above, this research also asks questions regarding Value
Propositions, namely, “In your opinion, what are the uniqueness of other products that can be the
superior value of Umi 4R Kitchen Fried Onion products?”
The answers from the key informants confirmed the superiority of the product itself, namely
the business of Umi 4R Kitchen Fried Onion has a crispy product texture with a more savory taste
than other fried onion products in general, besides that the fried onion products of Umi 4R Kitchen has
advantages in that it has an attractive product packaging and a competitive price.
Channels
Segments or components that describes how a company communicates with its customer segments and
reaches them to realize this superior value. 28 Channels are a way to reach customers. 29 Channels are
the methods used to provide our superiority/value proposition to consumers. However, the company
must consider its internal capabilities and consider the consumer behavior of the intended target
market.
In the BMC 1 design for the Channels elements, it includes direct sales at supermarkets, direct
sales, sales of orders through the Gojek/Grab Food application and products that can be obtained at
several outlets/shops. In the BMC 2 model, as a form of model revision, after the survey was
conducted, there was a revision with the addition of a sales system for pre-orders and promotions
through social media (Instagram, WhatsApps, Facebook, marketplace) as well as direct reviews of
testimonials from consumers via social media which also became a media channel that connects
customers with Umi 4R Kitchen Fried Onion products.
In addition, this study asked questions to key informants, namely “In your opinion, what is a
good distribution channel for product marketing
28
Messepe, Op.Cit.,
29
Herawati, Op.Cit.,
12
The answers from the key informants show that Umi 4R Kitchen’s Fried Onion business to
distribute its products to customers is by placing them in outlets, collaborating with outlets, selling
through social media, collaborating with restaurants/cafes that are viral, collaborating with distributors
and retailers. Customer state that this fried onion product must be easy to obtain, easy to order.
Promotion can be done through social media as well as by giving product samples to introduce
products to new customers. These results indicate that customers state that social media can be a
channel that brings products closer to their customers.
Customer Relationships
Segments or components that describe the types of relationships built specifically by the company
with customer segments. Customer Relationships are defined as the relationship between the business
sector and customers. Efforts to build relationships with customers aimed at getting new customers
(acquisition), retaining new customer (retention), and offering old and new products or services to old
customers (upselling).
There is no difference in the design of BMC 1 and BMC 2 regarding this customer
relationship. For Umi 4R Kitchen Fried Onion products, customer relations and customer loyalty can
be obtained by maintaining customer relationships by providing clear information, providing reviews
about Umi 4R Kitchen Fried Onion through social media, Umi 4R Kitchen Fried Onion always
maintain its product image, providing clear price and accept Criticism and Suggestions. In addition to
these results, further digging on key informants by asking open questions about customer
relationships, namely “In your opinion, what can companies do to keep customers loyal to the
products the produce?”
The answers from key informants can be concluded that efforts can be made to keep
customers loyal to Umi 4R Kitchen Fried Onion by maintaining product quality, cleanliness and taste,
and keep prices competitive, increasing promotions such as bundling or price discounts, goods are
always available. The results of this interview strengthen the design of BMC 1 and BMC 2 for Umi
4R Kitchen Fried Onion products.
Revenue Streams
Segments or components that describe the cash or cash flow that the company generates from each
segment or the sources of income that the company will get from the business model. Revenue
streams represent the path of receiving money that will be received from each customer segment.
Revenue Stream is part of determining which business processes generate profits and how much
customers are willing to pay in return for the services or goods that the business provides.
There are no changes to the elements of the revenue streams design on BMC 1 and BMC 2.
Until now, the revenue earned by the Umi 4R Kitchen Fried Onion is still from sales and income
generated from users of the Gojek/Grab Food Application services. The results of interviews with
key informants through the question “In your opinion, what can the company do to increase
business income apart from increasing sales?”, the answers is that the Umi 4R Kitchen Fried Onion
business income that can be increased is through promotions, making new variants, increasing
production and adding market segments by opening outlets and building partnerships. From these
answers, it still confirms that Umi 4R Fried Onion business is still dominated by product sales.
Key Resources
The main resources segment or component describes the most important assets needed for a business
model to function. Key resources are the main resources that explain the most important assets needed
in creating a business model.
13
The results showed that there were differences in the BMC 1 and BMC 2 designs. In the
BMC 1 design, key resources included human resources, Owner’s Capital/Equity, Raw Materials,
Machinery and Equipment while in BMC 2 there were additional key resources namely Social Media.
The key informant’s answer to the question posed “in your opionio, how do you manage the
resources owned by the company?”, stated that the UMI 4R Kitchen Fried Onion business requires
key resources consisting of human resources, other resources, using the workforce of the local
residents, as well as social media. The addition of social media is the impact of the COVID-19
pandemic, where customers are still connected to products through social media so that social media
becomes a resources that must be managed properly to maintain sales continuity.
Key Activities
Segments or components are key activities showing the most important things a company must do so
that its business model can be realized correctly. The main activitiy is the main business activity
carried out . The main activity describes the most important operational activities that must be carried
out by the company so that the value and business model are optimally conveyed. The main activities
will vary depending on the number of industries and type of business which include aspects that
generate superior value, deliver superior value to customers, activities ti establish relationships with
customers, and activities to handle revenue streams.
The results of the BMC 1 design show that the key activities of the Umi 4R Kitchen Fried
Onion business consists of Raw Material Purchasing, Raw Material Processing, Production, Product
Packaging, direct and online product sales and after-sales service and customer complaints, but for the
BMC 2 design there are changes with additional online product promotions. This addition is due to
the use of social media as a media for selling pre-orders by using social media as a channel that brings
products closer to customers during the COVID-19 pandemic. This result is supported by key
informants’s answers to the question “What do you think the company can do to increase its main
business activities other than production?” The answer to this question states that to increase the
main activity is through marketing, promotion with advertisements on social media. Therefore it can
be concluded that activity on social media is one of the key activities that must be managed properly.
Key Partners,
Segments or components represent a network of suppliers and partners involved in our
business model. Key partners are partnership keys that describe a network of suppliers and
partners.30 Key partners describe the network of suppliers and partners that make the business model
function effectively and efficiently.
The results of the BMC 1 and BMC 2 designs show difference in the key partners for
marketing Umi 4R Kitchen Fried Onion products. The design of BMC 1 key partner consists of
suppliers of raw materials, partners (Supermarkets., minimarket such as Indomaret & Alfamart,
Stores/outlets) while BMC 2 key partners increase and Hotels, Restaurants, Cafes. The key
informants’s responses to the question “What do you think the company can do in this business
partnership activity?”,shows that to build and partner is to maintain communication, giving customer
the opportunity to choose the character of their respective products, be honest and open. This answer
shows that entrepreneurs must maintain these key partners in order to guarantee the continuity of the
supply of raw materials and sales of the products they produce.
Cost Structure
30
Ibid.,
14
Segments or components that describe a network of suppliers and partners involved in the business
model.31 Cost structure is a cost structure that describes all costs incurred in a business.32 The Cost
Structure is basically the costs that arise for all business activities and resources. Expenses include
expenses that are necessary for the business to run. For example: raw material costs, employee
salaries, promotion costs, rental fees, licensing fees, insurance costs, reseller commissions and others.
This segment describes the costs that arises when operating certain business models including: a)
Creating and delivering value; b) Maintaining customer relationships; c) Generate revenue that causes
costs.
The results of the BMC 1 design for costs incurred include raw material costs, production
operational costs, cost for packaging, salary costs, shipping costs, packaging costs, promotion costs,
licensing costs (PIRT, Halal, BPPOM,HKI), whereas in the BMC 2 design there is an additional
Internet Package fee as a result of marketing through social media. The key informant’s response to
the question posed “In your opinion, what can the company do to control costs incurred?”,
indicating that the effort that can be made in controlling costs is to change the sales strategy to PO (Pre
Order), minimize the tools used with electricity, and cost efficiency. Even though selling Pre Orders
is one of the solutions in controlling costs, selling Pre Orders through social media will certainly incur
internet costs, so that the BMC 2 design has been revised with the addition of internet package costs.
CONCLUSION
The results of the study that BMC for UMI 4R Kitchen fried onion can be concluded that of the nine
elements of BMC there are six elements that must be improved, consisting of the Customer Segment
from Unsegmented to focus on Retail, self-service, Hotels, Restaurants, Cafes and Housewives who
are aware of health with middle and upper income. Channel elements are added a) a pre-order sales
system to add customers from outside the area and from social media, b) Promotion via social media
(Instagram, WhatsApps, Facebook, marketplace), c) Reviews or direct testimonials from consumers
via social media. The Value Propositions element adds a system of direct sales and pre-orders as
unique because it will bring the product closer to its customers. The key resources elements adds
social media as one of the key elements that must be owned and managed properly. The key partners
element add hotels, restaurants and cafes as new partners that can be explored and collaborated on
considering that this partner is one of the users who certainly needs fried onions to add to the taste of
food in their business, while the cost structure element with increased online marketing causes
increase in network and internet package costs.
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IJRS: International Journal Reglement & Society

Building a Business Model for Micro, Small and Medium Enterprises

Nurlinda1), Vivianti Novita2, Dina Arfianti Siregar3, Zulia Hanum4, Nirmadarningsih

Keywords: BMC, Bisnis Model Canvas, MSME

business Rupiah billion Rupiah

Business Model Canvas (BMC)

Segments or components represent a network of suppliers and partners involved in our

Figure 1 Nine BMC Segments

Figure 2 Business Model Canvas

FGD Form a group of 5-10 people. For example, if you want to

Ethnographic Survey Choose a fairly large and representative sample

Problem identification Business Model Design

Business Model Evaluation

Figure 3 Concept Framework

Data Collection and Analysis Techniques

Results And Discussion

Figure 4 UMI 4R Kitchen Fried Onion Products

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