Strategic Planning and Performance of Smes in Nigeria

This study examines the effect of strategic planning on the performance of small and medium enterprises in Benin City, Edo State, Nigeria. Specifically, the study seeks to explore the relationship between strategic planning and SME's performance, establish the impact of strategic planning on the growth and development of SMEs, and determine the challenges faced by SMEs in the adoption and implementation of strategic planning. A survey of One hundred Small and Medium Enterprises (SMEs) were randomly selected.Data were sourced via a structured questionnaire, while analysis of data was performed with the aid of frequencies, percentages, mean, standard deviation and Z-test. Results revealed that strategic planning has a positive relationship with the performance of SMEs in Nigeria and is essential for the success of a business. The study showed that strategic planning has helped businesses to navigate through uncertain economic conditions and market changes and also regularly reviewing and updating strategic plans is essential for improving a business. It also revealed that integrating strategic planning into day-to-day operations significantly enhances performances for business. Strategic planning also contributes to the growth and success of SMEs in Nigeria as shown in the study. SMEs owners/managers have improved their level of understanding of their competitor's strategies through strategic planning. It also showed that lack of financial resources hinders the adoption and implementation of strategic planning in SMEs. It revealed that limited understanding of strategic planning concepts and methodologies is a significant challenge for SMEs in Nigeria. Also, insufficient availability of data and information and also resistance to change and lack of buy-in from employees hinders the successful implementation of strategic planning. The absence of a dedicated strategic planning team or department makes it difficult for SMEs to effectively implement strategic plans. External environmental factors such as economic instability and regulatory changes create obstacles for SMEs in strategic planning as revealed by the study.Subsequently, the study recommends that similar research be conducted on SMEs in other states and countries to ascertain the overall relationship of strategy planning on SMEs performance. Also, conducting similar research but narrowing down to specific sectors instead of a collection of unrelated industries to determine the content of strategy and determine the suitability of specific features of the strategic planning process.