Recognition　of　useful　opportunities　is　very　crucial　for　small　and　medium-sized　enterprises＇　(SMEs＇)　survival　and　growth　in　the　competitive　environment.　However,　the　majority　of　SMEs　cannot　easily　recognize　new　opportunities　in　the　turbulent　markets　due　to　a　lack　of　managerial　competencies　and　knowledge.　Several　studies　have　been　carried　out　to　unleash　the　determinants　of　opportunity　recognition　that　configure　SMEs＇　success,　but　the　results　are　disjointed.　In　particular,　the　mediating　role　of　opportunity　recognition　between　business　experience,　financial　literacy,　and　SME　performance　has　been　missed.　This　study　aims　to　test　if　either　financially　literate　or　experienced　managers　can　recognize　new　opportunities　that　result　in　high　performance.　For　testing　the　hypotheses,　we　surveyed　232　Pakistani　SMEs　from　the　manufacturing,　trading,　and　service　sectors.　After　performing　the　structural　equation　modeling,　we　found　that　financial　literacy　and　business　experience　are　the　substantial　prognosticators　of　opportunity　recognition　and　SMEs＇　performance.　Opportunity　recognition　shows　a　partial　mediating　role　between　financial　literacy　and　SMEs　performance　as　well　as　between　business　experience　and　SMEs　performance.　However,　this　research　endorses　that　business　experience　is　more　vital　for　high　performance　as　compared　to　financial　literacy　whereas　in　terms　of　opportunity　recognition　financial　literacy　is　more　crucial　as　compared　to　experience.　This　study　recommends　the　enterprises　to　hire　the　financially　literate　and　experienced　managers　as　both　display　a　prominent　role　in　the　identification　of　opportunities　and　high　performance.　Further　implications　are　discussed.　©　2020　John　Wiley　&　Sons,　Ltd　and　ERP　Environment