The growing role of small medium-sized enterprises (SMEs)in both advanced market economies and economies in transition and their considerable contribution to employment and economic dynamism in the most industrialized countries suggest that this experience can be used for sustainable development of developing countries .In Iran more than 90% of enterprises are SMEs.Due to purpose of each company is maximizing profit ,it is necessary to evaluate determinants of profitability of SMEs.The purpose of this research is :”to gain a better understanding of the determinants of profitability in SMEs.” The research problem is defined as :”what are determinants of profitability in SMEs :Evidence from food industry at Jey Industrial State , Isfahan Province .”Six research questio and a theoritical frame of reference describing determinants of profitability were developed based on the Lawson’s profitability model .A qualitative research approach has been adopted , and case studies have been conducted in 25 SMEs active in the food industry.The empirical data have been collected through personal interviews and questionnaires.The data was analyzed by Econometrics . With respect to the findings ,we conclude that ,determinants of profitability are in three groups: 1.External Enviroment. 2.Market Interaction. 3.Inside The Business. In group one, National Factors are determinants of profitability.In group two ,Marketing and Sale are determinants of profitability.In group three, Management of Management,Quality Management and Human resource Management are determinants of profitability and at last ,Innovation is not a determinant of profitability and entrepreneurs should pay more attention to it.
