Given the fact that strategic planning takes a central position in firm’s operational activities, particularly in a rapidly changing business environment, but research into circumstance under which key strategic planning elements enhance firm performance is lacking in the extant literature. As a result, this study investigates the moderating role of external business environment in strategic planning elements-SMEs performance relationship. A survey research design was used via self-administered questionnaire with a view to collecting data from 497 registered SMEs operating in Lagos- Nigeria. The sample was chosen using a simple random sampling technique Data was analysed by SPSS and Partial Least Square- Structural Equation Modelling (PLS-SEM via PLS3). Findings revealed that significant positive relationships exist between strategy formulation, strategy implementation and SMEs performance. Findings further revealed that external business environment moderated the relationship between strategy implementation and SMEs performance. The implications, limitations and suggestions for future research were also discussed.