Abstract: The purpose of this study is determining the effect of strategic assets variable and external business environment toward entrepreneurship orientation and business performance of UKM in Makassar. This study uses survey towards UKM subject in industrial sector of Makassar City; food and beverages, wood and rattan, handy craft, basic metal industry. While data collection techniques use a questionnaire and analyzed by Structural Equation Model (SEM). The results of this study showed about the strategic asset that doesn’t have effect toward entrepreneurship orientation directly or indirectly. Besides, it has an affect toward the business performance of UKM directly or indirectly in Makassar. The external business environment influences the entrepreneurship orientation directly or indirectly. Thus, the external business environment influence directly and indirectly toward business performance. Entrepreneurship orientation affects directly or indirectly to the business performance of UKM in Makassar.