Context observations have indicated that family businesses are common in Nigeria and their going concern has generated academic debate and public discourse. Nevertheless, the factors orchestrating profitability in these family businesses are divergent and geographically diverse. One of the major issue to which this can be attributed to is the rarity of proper knowledge management practices. This paper adopted survey research design. Target population comprised of 503 selected SMEs operating in Lagos State and Yamane sample size method was adopted. Data was collected through the use of structured questionnaire adapted and validated for the study. The Cronbach’s alpha coefficient for the constructs ranges between 0.850 and 0.775. The questionnaire response rate was 93.2%. The data were analyzed using descriptive and inferential (Pearson product moment correlation and regression analysis) statistics. The analysis of the data revealed that knowledge management practices had a significant effect on the profitability of family business (R2=0.614, F(6, 461)= 125.006); p<0.05).The paper concluded that knowledge management practices are pertinent to enhance the profitability of family businesses. The paper recommended that for family businesses to continue to gain profit and survive, knowledge management must be put into a strategic plan so that employees have adequate capability and knowledge sharing culture.