<p>Small and medium enterprises (SMEs)—an engine of growth in most world economies with unprecedented growth, expansion, and increasing numbers—face important challenges in terms of product and process innovation. These challenges are represented by a combination of economic, knowledge, market, and deterrent barriers that disrupt or lead to the failure of innovative projects. This paper aimed to assess the impact of these barriers on SME innovation. Data were collected from 457 managers/owners of innovative SMEs in France. Structural equation modelling through WarpPLS software was used to test the research hypotheses. The results of the analysis revealed the impact of two types of barriers—knowledge barriers and deterrent barriers—that are inversely related to innovative performance, while the results do not reveal the impact of economic and market barriers. Identifying the reasons that hinder innovation projects provides an opportunity for managers to find appropriate solutions to move forward in developing innovations that will be launched in the market. The research provides new insights to overcome the obstacles facing this category of companies in order to improve their performance.</p>