The purposes of the research are: (1) to analyze the external factors influence which consist of
governmental policy, social economics and culture, and related institute role aspect to internal factors of Small
and Micro Business; (2) to analyze the external factors influence which consist of governmental policy, social
economics and culture, and related institute role aspect to Small and Micro Business Performance ; and (3) to
analyze the internal factors influence which consists of human resource, financial, technique production and
operation, and market or marketing aspect to Small and Micro Business Performance. Research location in
Makassar and Pare-Pare City. Total respondents are 300 which divided in two location with the same
proportion; i.e. Makassar are 150 respondents; and Pare-Pare are 150 respondents. The Sample technique
uses simple random sampling. The data analyzed by descriptive analysis and Structural Equation Modeling
(SEM). Data processing performed by software AMOS 4.01, and SPSS for windows. The results indicate that :
(1) external factors which consist of governmental policy, social economics and culture, and related institute
role aspect have significantly and positive effect to internal factors of small and micro business with
contribution equal to 0,980 (98%); (2) external factors which consist of governmental policy, social economics
and culture, and related institute role aspect have significantly and positive effect to small and micro business
performance with contribution equal to 0,254 (25,4%); and (3) Internal factors which consists of human
resource, financial, technique production and operation, and market or marketing aspect have significantly
and positive effect to small and micro business performance with contribution equal to 0,792 (79,2%)