This study examined the effects of innovativeness, opportunity focus, and asset utilization on the performance of small and medium-scale enterprises (SMEs) in South-West Nigeria. A survey research design was adopted, with a population of registered SMEs obtained from the corporate affairs commissions and state ministries of commerce across the region. Using Krejcie and Morgan’s (2002) sampling formula, a sample of 400 SMEs was determined and selected through a multistage sampling approach that combined stratified, purposive, and random techniques. Data were collected using a well-structured questionnaire that captured measures of innovativeness, opportunity focus, asset utilization, and SME performance on a five-point Likert scale. Validity was ensured through expert review, while reliability was confirmed with Cronbach’s Alpha coefficients above 0.70. Out of 400 questionnaires distributed, 365 were correctly completed and used for analysis, representing a 94% effective response rate. Multiple regression analysis conducted with SPSS version 23 revealed that innovativeness (β = 0.712, p < 0.001), opportunity focus (β = 0.674, p < 0.001), and asset utilization (β = 0.695, p < 0.001) all had significant positive effects on SME performance. The model explained 73.8% of the variance in SME performance (R² = 0.738), affirming the relevance of the Resource-Based View (RBV) theory, which emphasizes internal firm capabilities as drivers of competitive advantage. The study concludes that SMEs in South-West Nigeria can improve sustainability and competitiveness by leveraging innovative practices, identifying and exploiting emerging opportunities, and effectively utilizing available resources. It recommends that policymakers create an enabling environment with access to finance, infrastructure, and training, while SME owners adopt innovation-driven and resource-optimizing strategies to enhance performance outcomes.