The purpose of this study was to identify major factors perceived as performance challenges by people operating in Small and Medium Sized Manufacturing and Construction Sector Enterprises in Shambo Town. Data were collected from 70 respondents. Primary data were collected from owner-managers using personal interviews and semi-structured questionnaire. Collected data were analyzed using descriptive statistics and factor analysis with the help of statistical package for social science (SPSS 20). The results indicated operators were technically less experienced, state-of-art machineries and equipment were less utilized and less collaboration work among some government sectors in facilitating performance of small and medium enterprises. The study underscores technological innovations need to be adopted to facilitate the production of better quality products. Further, government sectors need to form an integration so as to lessen challenges faced by small and medium enterprises.