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The value of business planning to new business ventures and small firms has been the subject of debate among entrepreneurship researchers. In this paper, we examine business planning practices as a function of legitimacy formation among Australian social enterprises, drawing on a mixed‐methods study. We find that business planning practices are driven by demands to establish legitimacy with external stakeholders as well as organizational performance imperatives, although legitimacy is the stronger driver. Findings also suggest business planning processes serve unique communicative and relational functions among social enterprises. This has implications for understanding legitimacy formation within multi‐goal and multi‐stakeholder businesses.

The social economy as a regional development actor is gaining greater attention given its purported ability to address social and environmental problems. This growth in interest is occurring within a global environment that is calling for a more holistic understanding of development compared to traditionally economic-centric conceptions. While regional development policies and practices have long considered for-profit businesses as agents for regional growth, there is a relatively limited understanding of the role of the social economy as a development actor. The institutional environment is a large determinant of all kinds of entrepreneurial activity, and therefore understanding the relationships between the social economy and broader regional development processes is warranted. This paper moves beyond suggestions of an economic-centric focus of regional development by utilizing institutional logics as a theoretical framework for understanding the role of social enterprises in regional development. A multiple case study of ten social enterprises in two regional locations in Australia suggests that social enterprises can represent competing logics to economic-centric institutional values and systems. The paper argues that dominant institutional logics can promote or constrain the inter-play between the social and the economic aspects of development, in the context of social enterprises.