Due to the development of knowledge society, there is increased demand for using knowledge management (KM) in an entrepreneurship as well as using information and communication technology (ICT). To achieve sustainable capacity it is necessary to promote KM and ICT in small, medium and microenterprises (SMME). KM is implemented successfully in the firms with large amount of employees. There are limited abilities to handle it for SMME. It is necessary to develop the model for implementation of KM for achieving sustainable capacity in SMME. The aim of this paper is to illustrate the model for strengthening sustainable capacity of SMME in transition to knowledge economy. Study of the bibliography was applied to define main dimensions of sustainable capacity of an enterprise. The active knowledge modelling method was applied to develop the model of KM solution for achieving sustainable capacity of SMME. As a result of research, a method for evaluation of sustainable development of SMME was developed. It reflects key elements for KM solution in SMME and consists of four interrelated sub-models such as goal model, business process model, concepts model, and information systems model. The model was evaluated in the target group as well as in the group of experts.