Small and medium enterprises are very vital for economy because of their contribution in employment generation, output and exports. SMEs hold a strong role in Indian economy as well. Such firms face many difficulties when they start operation. SMEs in India face several difficulties like unavailability of adequate funds, lack of efficient technology, less effective marketing practices and lack of skilled manpower. The main aim of this paper is to find out the problems faced by SMEs while in operation. Primary and Secondary both types of data are used for study. Paper is empirical in nature as such data were collected with the help of schedule. Study emphasized the collection of data from one city, Gandhidham. The sample size is 25. SMEs face several problems but this paper highlights their main problems.