The Small and Medium Enterprises' (SMEs) growth in Sri Lanka is negatively affected by several factors such as lack of financial management, education facilities for the SMEs, less technological support, social issues, obstructive legal policies, limited financial support schemes, and problematic ethical factors. The current study is focusing on the Southern Province of Sri Lanka since it was noticed that the relative dominance of these factors is different compared to the other Provinces in Sri Lanka. This project focuses on evaluating fundamental factors required for developing a strong foundation for emerging sustainable SMEs and comparison of these factors statistically, and qualitatively in SMEs of the Southern Province of Sri Lanka. The coordination of the research was comprised with literature review, questionnaires, interviews and inspection analysis to provide information for solutions. The studies in legal policies, balance maintenance on asymmetrical knowledge, political stability, capital strength, organization morale, technical background were analyzed on countries such as USA, India, and China, and also on well established Western and Central Provinces in Sri Lanka, which eventually provided us with a good contrast. These data were used to investigate the shortcomings of SMEs in the Southern Province and showed an overall result that 53% of SMEs have failed due to above factors. The study can also be expanded to a wider picture to answer factors affecting the sustainability of SMEs in Sri Lanka compared to other nations. The research will provide valuable insights to support the growth of SMEs in the Southern Province of Sri Lanka.