Multiple　tangible　and　intangible　determinants　affect　the　survival　and　success　of　a　small　and　medium　enterprise　(SME).　In　turbulent　markets,　however,　compared　to　exogenous　effects,　a　firm＇s　internal　capabilities　are　seen　as　major　sources　of　economic　value　creation　and　sustainable　competitive　advantage.　This　study　empirically　examines　the　effects　of　pivotal　internal　capabilities,　namely　entrepreneurial　orientation,　information　technology　(IT)　capability,　and　intellectual　capital　(IC),　on　the　financial　and　non-financial　performance　of　SMEs　that　operate　in　the　emerging　market　of　Pakistan.　Data　were　collected　through　self-reported　questionnaires,　from　a　sample　size　of　307　SMEs.　The　study　hypotheses　were　tested　through　the　structural　equation　modelling　(SEM)　technique　of　AMOS　21.　The　statistical　results　show　entrepreneurial　orientation,　IT　capability　and　intellectual　capital　as　significant　contributors　to　both　financial　and　non-financial　performance.　Despite　its　limitations,　the　study　offers　both　future-research　directions　and　policymaking　recommendations　for　practice.　Namely　each　SME　ought　to　focus　on　self-developing　those　internal　capabilities　that　render　sustainable　its　competitive　posture.　©　2019　-　IOS　Press　and　the　authors.　All　rights　reserved.