Effect of Business Planning on Business Performance among Small and Medium Enterprises; A Case Study of Selected SMEs in Ghana

Strategic planning has been found severally by a number of studies to be a necessary precursor of organizational performance and as such, the concept has become an important aspect of business management that is often resorted to in order to achieve sustainable growth. Nonetheless, while many scholars have demonstrated that strategic planning is a salient factor that contributes to business performance, others are of a contradictory view. Based on this backdrop, the study examined the effects of business planning on the performance of selected SMEs across three metropolises in Ghana. Among the specific aims of the investigation, the researcher set out to examine the relationship between business planning and the performance of SMEs as well as assess the challenges of business planning among the SMEs. The study employed a purely quantitative approach in acquiring and processing the numerical data acquired from 150 SMEs sampled through a purposive sampling strategy. The principal findings of the study reveal that, although some considerable numbers of the surveyed SMEs (57.3%) are engaged in business planning processes, 50% of these businesses are unable to achieve their strategic business goals. The study also established a strong and positive relationship between strategic business planning and business performance although it identified that, a major challenge of business planning among the firms surveyed is access to credit.