This study aims to analyze the process of optimizing the value added of palm sugar through the development of powdered palm sugar products to support the sustainability of micro, small, and medium enterprises (MSMEs) in Timbang Lawan Village, Langkat Regency. The research adopts a qualitative approach with a case study design, implemented through business mentoring activities within the Community Service Program (Kuliah Kerja Nyata/KKN). Data were collected through observation, semi-structured interviews, and documentation. The findings indicate that palm sugar MSMEs in Timbang Lawan Village remain highly dependent on traditional marketing channels and the tourism sector, with molded palm sugar as the primary product, resulting in fluctuating and less sustainable income. In addition, the limited number of palm trees constrains production capacity. Business mentoring through innovation in powdered palm sugar processing was found to enhance product value added without requiring an increase in raw material volume. This innovation opens new market opportunities, particularly among cafés and culinary businesses in the Bukit Lawang tourism area, and improves MSME actors’ understanding of product diversification and market orientation. Optimizing the value added of powdered palm sugar contributes to improved competitiveness, income stability, and the sustainability of MSMEs based on local potential.