Nowadays, most part of small and medium-sized enterprises do not have officially accepted business plans, and there is no necessary mechanism for business planning. However, the adoption of various kinds of current decisions, even the timely ones, does not replace business planning, which, in comparison with the adoption of tactical decisions, represents a management activity of a much higher level. Recent research of foreign and domestic companies reveals that the main reasons of small and medium-sized businesses bankruptcies are miscalculations or lack of business planning. Practical part shows that most Moldovan managers still do not have the methodology and philosophy of business planning and have sceptical attitude towards its usefulness. Many business problems can be avoided through business planning, since management attention will be drawn to them before they become critical. This article presents the results of research of theoretical and practical foundations associated with small businesses planning process. The main part of the article is devoted to the analysis of statistical data on this type of enterprises and evaluation of the advantages for using business planning in small business. The article aims to justify from theoretical point of view the role of business planning in the small and medium business enterprises of the Republic of Moldova, to identify the reasons for implementation and the functions that business planning performs in business. For this purpose, the following tasks were formulated and solved in the work: determination of the role of small and medium business enterprises in the economy of Moldova; substantiation of the relevance of business planning at these enterprises; determine the purpose of the business plan and identify the benefits of effective business planning.