The city of Berlin has set ambitious goals to become a leading circular economy (CE) city, implementing various strategies to drive this transformation. However, the successful transition to a CE critically depends on the ability of businesses to realign operations, infrastructures, and supply chains with circular principles. Small and medium-sized enterprises (SMEs) in the manufacturing sector face distinct challenges in this process and require targeted, context-specific support. This study investigates the CE awareness and competence needs of Berlin’s manufacturing SMEs through an explorative, qualitative survey among industry representatives. The findings reveal significant knowledge gaps, particularly regarding advanced CE strategies and emerging regulatory frameworks. Furthermore, they give insights into preferred competence building elements. The results directly inform the development of a Berlin-based digital competence platform designed to provide SMEs with tailored capacity-building measures, thereby supporting their effective engagement in the circular transition.