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This study aims to analyze the effect of implementing total quality management on customer satisfaction and the business performance of small and medium enterprises (SMEs) in the city of Banda Aceh, Indonesia. The research sample of 100 business owners was taken by purposive sampling. Data collection using a questionnaire and then the data were analyzed using simple linear regression statistical tools that are operationalized with AMOS. The study found that quality practice had a positive and significant effect on customer satisfaction and business performance of SMEs. Customer satisfaction mediates the effect of quality practice on business performance.