Knowledge management is a key for any organisation of the 21st century. It involves the processes, strategies and structures employed by an organisation to create, acquire, store, share and implement knowledge. The theoretical framework of knowledge management is the knowledge-based theory that considers knowledge as the most important asset for any organisation. Knowledge management has been identified as an important tool that gives an organisation a competitive advantage, while remaining relevant in the market. However, a large number of small and medium enterprises experience serious difficulties in developing their knowledge management capabilities. Albeit the strategic importance of small and medium enterprises in the South African economy, no known studies have been identified that have examined the impact of knowledge management on the performance of small and medium enterprises in South Africa in general and in the Western Cape in particular. Therefore, the aim of the present study was to fill this gap and provide fresh insights on the contribution of knowledge management in the performance of small and medium enterprises.