OLOTA OLUWAYOMI OMOTAYOABDUL FALILAT AJOKE (Ph.D.)OLADIPO GANNIYU TAIWO2024-05-102024-05-102017-066. Olota O.O., Abdul F.A., Oladipo G.T., (2017); Impact of Environmental factors on Business Performance in Kwara State, Nigeria. Ilorin Journal of Management Sciences 4(1); 67-79. Available at http://ejounal.unilorin.edu.ng/journals/index.php/ijms2408-655Xhttps://uilspace.unilorin.edu.ng/handle/123456789/14020It has been argued that more than 70% of SMEs go into extinction within first five years of establishment. Despite their contribution to the economy, high mortality rate amongst them is great concern to all stakeholders. Therefore, the main purpose of this study was to determine the impact of environmental factors on the performance of SME. The population of this study was 2703 SMEs in Ilorin. The study adopted purposive sampling technique to select a sample size of 336. Data was analysed using both descriptive and inferential statistics. The hypothesis was tested using both regression and correlation. The result of the analysis reveal that: i) with the result of hypothesis one (R = 0.747, R2 = 0.558, (0.000) < 0.5). This implies that 55.8% variation in the dependent variable (Efficiency of SMEs) is caused by the independent variables (Employees' competencies). (ii) while hypotheses two result indicate R(325) = 0.125, p = 0.024 < 0.05. This revealed that a positive relationship exists between technological advances and innovativeness of SME, which is significant at p-value of 0.024. iii) and lastly for hypothesis three result (R = 0.855, R° = 0.732, (0.000) < 0.5). This implies that 73.2% variability of the dependent variable (Sustainability of SMEs) is accounted for by the independent variables (Economic factors). The study concluded that employees' competencies, technological advances and economic factors are key determinants of SME performance. It is therefore essential for SMEs to put their business environment into consideration in their strategic management planning in order to survive the complexity and dynamism of the environment.enenvironmental factorPerformanceInnovativenesssustainabilitySMEArticle