Small and medium sized enterprises (SMEs) play a major role in economic growth in developed and developing countries. For example, in the European Union, SMEs contribute to over 99% of all enterprises and more than 100 million jobs, representing 67% of private sector employment. In the Lodz Metropolitan Area (LMA) SMEs play a decisive role in economic development and their economic condition translates into the condition of the sub-region.

Hence, the main objective of the paper is the assessment of SMEs operations in the LMA by the identification of development factors and barriers to economic activity. The paper uses the results of a direct study of the group of 171 small and medium sized enterprises conducted in 2012. We applied various statistical tools useful in processing data from questionnaires, e.g. cross-sectional analysis, averages, variation coefficients, Cramer’s V, and internal consistency coefficient Cronbach’s alpha.

The paper goes on to discuss the competitiveness of goods and services produced by companies included in the study by making reference to theories of sources of competitive advantage. Its important part will be devoted to the assessment of SMEs operating conditions taking account of 30 factors that facilitate or hamper business activity. The analysis will also cover enterprises’ opinions on selling opportunities in a medium-term perspective. These opinions will be presented in various cross-sectional studies.