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ket share vary greatly within industries and is therefore hard to compare, total assets also depends on the industry’s capital intensity and changes over time and profits is not that relevant unless measuring size over a long period of time. Therefore sales and employment are the two most important indicators measuring firm’s size and growth. Employment numbers is also a measure that is easily accessible, since it is an important figure for governments. Sales figures are on the other hand affected by inflation and exchange rates and it is difficult to compare sales figures between industries. That is why it is important to use multiple growth indicators to study firm growth (Davidsson, Delmar & Gartner, 2006).

In developing countries SMEs are usually competing with price over added value. On the other hand SMEs in developing countries have generally a lower productivity than in developed countries and because a country’s productivity level is a major indicator of improved living standards, added value should be seen as one of the important indicators of growth (Lind, 2005).

2.5 Internal factors

Margi Lévy and Philip Powell argued that growth is determined by a combination of the entrepreneur, strategy and the firm organization. The author also defined key influences on SMEs growth, internal factors that reveal how decisions and features effect the growth of a firm.

Entrepreneurial Influences - A firm’s growth is dependent on the managerial knowledge (Macpherson & Holt, 2007). Training is crucial for the productivity and quality as well as it influences the effectiveness, efficiency and motivation of the employees (Thassanabanjong et al., 2009). The SME owner has considerable personal influence over a firm’s strategies, tactics and operations to engage in decision process across the firm. As a result, although a flat, informal organizational structure is likely to exist, decisions making tends to be quite centralized around the owner. The entrepreneurs’ personality and behaviour are to be causal factors for or against growth-orientated achievement. It is characteristic of small business that power decision are centralized at the level of owner-manager, so his or her personality, skills, responsibilities, attitude and behaviour will have decisive influence on business strategy. (Levy and Powell, 2005)

Market competition has a larger affect for SMEs chance of survival and uncertainty is high as most of the smaller companies tend to have smaller share of the capital. This leads SMEs to have one or two major customers and are do not have big influence on prices. Larger companies with higher market share usually determine prices (Levy and Powell, 2005).

Education of employees - SMEs face difficulties employing and retaining skilled graduates, because they prefer to work for LEs that can offer higher salary, job security and career possibilities. In order to meet the demands of the fast changing work environment which is typically associated with SMEs it is essential that smaller firms ensure that they are able to attract, retain and motivate high quality employees with effective transferable skills through the existence of a strategic training plan and a specific budget for training (Jameson, 2000).

Marketing - According to Brush et al., (2009) marketing is another obstacle for companies to grow since many businesses confront challenges es