The knowledge base of an enterprise is the actual resources of knowledge and skill belonging to the people working in an organisation, which collectively constitute its knowledge base, has become central as a source of competitive advantage whilst innovation has become crucial for ensuring that these advantages are sustained.  Companies are therefore forced to carry out continuous improvements and innovation in order to survive, keep abreast of change and ultimately excel, as more often it is the innovative mental creations of knowledge workers that create value.  Knowledge is therefore a definite contributor to competitive advantage. It is also true  that, as the intellectual assets of an enterprise have become more complex, the ability to inspire employees to invest in knowledge will become more important.   Factors such as globalisation, increasing competition, and the new knowledge economy are now forcing many South African companies to evaluate the powerful role of intellectual capital as their most important source of competitive advantage.  Also, the purpose of managing knowledge in an enterprise is to maximise the knowledge-related effectiveness of the enterprise and to renew this knowledge on a regular basis in order to sustain viability, profitability and ultimately competitive advantage. From the above it is clear that competitive advantage is critical for the survival of small businesses.  Various approaches are available to achieve and improve competitive advantage.  In this research project the following research problem will be addressed: South African SMMEs are not using the mechanisms of knowledge management utilisation to gain competitive advantage. The proper management of knowledge is therefore important for the success of any enterprise.  It should be integrated into other management activities and should at the same time be linked to the strategic plan of the enterprise.