This exploratory study examines the findings of a survey of small business owners in Australia, their use of formal business planning and its relationship to business performance. While the use of formal business plans is widely considered to be a positive for small business management, previous research has been equivocal on the relationship between use of such plans and profitability. This study used a statistical analysis to examine the relationship between use of formal business plans and business performance and character. The findings suggest that possession of a formal business plan was significantly associated with higher gross revenues and growth in sales. A discriminant analysis found twelve variables that differentiated firms with formal plans from those without. These provide insight into the nature of formal planning within small firms. However, the issue remains as to whether the plan is responsible for the growth or the growth responsible for the plan.
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