Small and medium enterprises (SMEs) contribute significantly to Nigeria’s economic vibrancy, yet many struggle with inconsistent performance due to weak internal business structures. This study examined the effect of internal factors business performance among SMEs in Lagos State. The study population of 11,663 and a sample size of 473 determined by the Krejcie and Morgan (1970) table. The study found a strong and statistically significant multivariate effect of these internal determinants on overall performance (Wilks Λ =.091, p =.004) by reviewing data obtained from 473 firms and performing a multivariate analysis of variance (MANOVA) tool from SPSS was used. The related effect sizes were significant (partial η² = .522–.721), and it is evident that internal competencies play a central role in the success of firms. Follow-up univariate analyses identified large influences on profitability (p =.010), market share (p =.022), and sales growth (p =.001), and sales growth proved to be the most receptive measure to internal variables. Such findings offer empirical evidence to the resource-based view (RBV), which indicates that competitiveness in the unstable environment of Lagos is achievable only through firm-level capabilities. The study therefore recommended that the systems in managerial, financial, and market-oriented areas should recognize those factors as it significantly improves the performance of SMEs, and outlines feasible implications and research opportunities.