In the era of industrialization small and medium enterprises (SMEs) play great role in world economy. The developed as well as developing countries are being benefited from SMEs which holds a strong position creating new employment and helping in the development and supporting in local production. The job creation element of SMEs enables many poor people to feel more secure, assuring that they have a stable job to survive .But the actual situation and overall working condition of SME’s is very dreadful especially due to limitation of resources, facilities and techniques. This paper compares different performance criteria on three different SME and indicates a standard benchmark SME using fuzzy-TOPSIS analysis. The proposed method states optimum SME working condition among different performance variables with different values. Qualitative variables with multiple criteria problems have been analyzed here. As human assessment is uncertain and often subjective for qualitative characteristics, the alternatives’ characteristics are expressed in linguistic terms. These linguistic terms are then evaluated through integrated fuzzy-TOPSIS method to produce numerical value which is the performance rating for each characteristic of SME alternatives. According to the fuzzy rule, the alternative with the highest value is chosen as the standard and other variables of alternatives are compared with the standard. The advantage of using fuzzy- TOPSIS is that it distinguishes benefit and cost category criteria and selects solution that is closed to the positive ideal solutions and far from the negative ideal solutions. Moreover, the paper offers a new method of identifying best SME using integrated fuzzy-TOPSIS and recommends optimum performance variables.