This work aims at finding out whether or not leadership style influences the performance of small firms. For this purpose, the study utilized the categories of transformational, transactional leadership and laissez faire style, with a sample of 96 managers of small companies in northern Chile. The results obtained show that, in the organizations studied, transformational leadership is moderate, whereas the transactional style is frequent and laissez faire style is infrequent. Similarly, with regard to the effects of leadership on the effectiveness of the small companies analyzed, it was found that transformational leadership has a positive impact on performance, whereas transactional leadership and laissez faire style had a negative impact.