This study assessed the factors affecting performance of Small and Medium Enterprises (SMEs) in Kinondoni municipality in Dar es Salaam region in Tanzania. It aimed to provide the knowledge on how to start and manage SMEs sustainably after being aware of the factors affecting performance. Specific objectives of the study were: to examine market accessibility challenges affecting SMEs performance, to assess taxation factors affecting the performance of SMEs and to determine financial records management challenges affecting SMEs performance in the area of study. Descriptive survey research design guided the study employing convenient sampling technique to obtain 98 respondents. The data was gathered using questionnaires and were analysed and presented using both qualitative and quantitative approaches. The principal findings revealed that in market accessibility most of SMEs do not identify their target market for the products, there are no considerations on the location of their business basing on the target market, and there are challenges in accessing market areas. Also, there is no use of promotional tactics, no right information and there are no market networks. Furthermore, respondents agreed on taxes based on the kind of the venture or business established and the payment of tax led to the development of the area though there are a lot of miscellaneous taxes affecting them. Regarding financial management, most of the SMEs do not keep records hence getting difficulties in accessing or getting financial support for the development of their ventures or enterprises. The study recommends: provision of entrepreneurial skills to all levels of education, using the cooperatives, improving the infrastructure, financial assistance, technological innovations and good information network. Also, regulations governing SMEs should be simplified to enhance compliance. SMEs administrators should be more efficient, caring and of high integrity as this will help combat issues. For SMEs regulators should improve their support services towards SMEs such as educating small business owners on issues like taxes they have to pay and the incentives and exemptions they are eligible for. In order to obtain good results in doing this the government should make a major reform on SME policy which will create the conducive environment for small firms to grow.