EFFECTS OF INTERNAL AND EXTERNAL FACTORS ON THE BUSINESS OF SMEs

Abstract

This paper examine the influence of internal and external factors on the business of small and medium enterprises (SMEs). Small and medium enterprises play an important role in development and economic growth of all countries. Small and Medium Enterprises face numerous challenges on the environment in their vicinity. SMEs should be alert and aware of the significant impact of external and internal environment on business, that enables them to become an effective actor in the economic growth of their country. The goal of this study is to determine external and internal indicators, that have an impact on the business of SMEs. The data used in this paper are obtained from the research conducted in Serbian SMEs in 2019. The applied statistical analysis was the structural equation modeling (SEM), which includes evaluating the measurement and structural model by using the appropriate statistical methods in software packages SPSS v. 17 and AMOS v. 8.0.