Dr. Geller ’s study provides a critical connection between numerous scientific studies on the correlation between formalized planning and business success, and the grim reality of small business failure in the U.S. For example, a 1997 study by Berman, Gordon, and Sussman concluded that the practice of formalized planning increases companies ’ financial performance and longevity. According to a 2006 report by the US Small Business Administration, 580,400 of the 671,800 businesses that started that year failed, a failure rate of about 87 percent.

Dr. Geller ’s study, which surveyed 228 micro businesses in Northern California, found that only 11.4 percent of the surveyed companies reported having a formal strategic planning process in their organization. These findings are significant because they reveal that micro companies have a lower rate of formalized strategic planning (11.40 percent) than larger small-businesses, which according to previous research (Gibson 2002) have a 20 percent incidence of formalized strategic planning.

“The key to increasing the probability of business success and longevity is so simple that one wonders why those that need it the most — micro businesses — don ’t embrace formalized strategic planning, ” says Dr. Geller. Every entrepreneur and family business should have a simple, short (10 to 15 pages) strategic plan.