Purpose – The purpose of this paper is to focus on small and medium enterprises (SMEs) in an attempt to cover the gap in research on intellectual capital (IC) applied to SMEs. The paper informs the debate on the importance of IC by providing empirical evidence of SME managers’ perceptions about the importance and contribution of intangible assets to their businesses. Design/methodology/approach – Questionnaires were sent to New Zealand SMEs investigating managers’ perceptions about the importance of and the contributions that intangible asset components make to their businesses, and to assess their familiarity with the term intellectual capital (IC) and their preferences in using the term IC versus intangible assets. The results pertaining to the importance of intangible assets were statistically analysed. Findings – This paper informs that the broad assumption that intangible assets are important and are value drivers of business’ success is valid for small and medium enterprises. The majority of respondents perceive intangible asset components to be essential, very important and important to the success of their business and that these components collectively make several contributions to their businesses. Based on average rating, customer satisfaction ranked as the most important and thereafter customer loyalty, corporate reputation, product reputation and employee know-how. A minority of respondents indicated that only a few components are not very important and not important at all, the least important component being distribution agreements, followed by employee education and relationships with investors. The majority of respondents are familiar with the term IC, and the same number prefer to use the term “intangible assets” as those preferring to use the term IC. Practical implications – Providing evidence of SME managers’ perceptions of the importance and contributions of intangible assets is essential to raise awareness among SME managers in understanding, identifying and managing intangible assets that are important value drivers for their businesses. Such awareness is essential in particular in countries where SMEs make up a significant proportion of business and employment. The results of this study may be a benchmark for SME managers unfamiliar and ignorant about the topic of this research. Originality/value – This paper is the first providing empirical evidence as to SME managers’ perceptions about the importance of and the contributions of intangible assets to their businesses, as well as about their familiarity with the IC concept and preference in using IC terminology.