Publication

Small Business Planning is Sticky but neither a Universal Practice nor a Guaranteed Path to Success.

Published: 19 November 2025

ERC Research Paper No 121

Associated Themes

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  Business Growth
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  Management and Leadership
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  Productivity and performance

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Business planning is widely promoted as a hallmark of good management and a prerequisite for small firm success. However, prior research offers mixed evidence on its effectiveness, and some studies suggest that planning may be more symbolic than functional. While planning has been linked to venture survival and growth, other work highlights the persistence of non-planning behaviour and the existence of successful firms
that operate without formal plans. This study adopts a behavioural and contingency-based approach to examine planning persistence, its relationship with productivity, and the characteristics of successful non-planners. Using longitudinal panel data on small firms,
we analyse planning behaviour over time, productivity (measured by turnover per employee), and firm attributes, including age, size, exporting, and technology use. Methods include latent class analysis, fixed and random effects regressions, and treatment effects
modelling to estimate causal impacts.

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