The human development report in 2003 of United Nation Development Program (UNDP) reveals that among others, economic reforms to establish macroeconomic stability is crucial for sustainable human development. The study aims to establish pertinent factors influencing performance of small and medium agro-based enterprises in northern states of Malaysia. The study utilizes 125 sample firms that operate in agricultural sectors. Direct and indirect effects of distinctive capabilities on entrepreneurial orientation (EO) and return on sales relationship among Malaysian agro-based entrepreneurs showed the development imperative.