Business Link for London provides advice and support for small and medium sized businesses. It has prepared a checklist of common pitfalls for BBC News Online readers.
Although getting a business idea off the ground is hard work and by no means risk-free, the fact that nearly half of businesses fail to reach their second birthday is somewhat disturbing.
It is a proportion that is far too high and one that could easily be reduced if only aspiring entrepreneurs avoided a number of common pitfalls.
The key overriding principle is to be thorough and to be prepared. If you are not prepared, be prepared to fail.
The key mistakes most frequently made are:
Not qualifying your idea.
Too many people make the error of rushing into business with an idea, believing that because they are excited about it and because they have faith in it, it will be a success.
Many often fail as a result. The key is to examine whether your idea, even if it is your passion or hobby, will appeal to consumers and whether it will form a viable commercial proposition.
More importantly, do you have the necessary skills and drive to turn it into a thriving business?
Not bothering to research your potential market.
Failure to research the marketplace you are going into effectively means you are going in blind.
Despite this, many start-ups do not invest the necessary time in this key step.
Entrepreneurs need to find out all there is to know about their prospective marketplace, focusing on three key elements: competitors, the size of the market and the demand.
Failing to listen to anybody.
Entrepreneurs are often (in)famously strong-willed, and although this can be a valuable trait, failure to listen can be costly.
Enlist somebody to act as an independent sounding board: they can bring much-needed perspective right from the initial concept and business planning, to ongoing development and beyond.
Formulating a focused business vision is a key step for anyone wishing to get their idea off the ground, yet too many start-ups fail to take the time to do so.
It is crucial that you know what you want your business to achieve, where you want it to go and how it is going to get there.
The key is to set definable objectives and use your sounding board to provide an alternative perspective to check you are on the right track.
Not putting any effort into writing a business plan.
Poor planning is one of the key factors behind business failure.
A company's business plan is a critical document, outlining how a business will achieve its goals.
It is also the document that will enable (or not as the case may be) a business to raise the finance it needs.
It has to be viable and as detailed as possible, with measurable goals, expectations, financial requirements and forecasts, with provision of a good spread between the best and worst case business scenarios.
Given the importance of the business plan both in terms of raising finance (remember that it will have to be tailored according to the type of finance you are seeking, either debt or equity) and on-going development of the business, it is extremely important to take external advice when formulating it.
Turning a blind eye to legal intricacies.
The reality is that going into business does mean thinking about and completing lots of legal paperwork.
However, many entrepreneurs either ignore vital areas or make important decisions without full knowledge of their future implications.
There are numerous business structures available, such as sole trader, limited and partnership, and the pros and cons of these need to be given due consideration.
In addition, there are "minor" considerations such as contracts and employment law. Finding a good lawyer to help guide you through what is a potential minefield is a good investment.
Selecting the first place you see as your new premises.
A business address can be key to success. The decision on where you base yourself needs to be carefully considered, taking into account costs, competition and access - as is the case every step of the way, look before you leap!
Letting your business finances manage themselves.
Running out of cash is the single most common reason for business failure.
Quite often, this is more than preventable - the fundamental mistake is that many businesses simply do not manage their cashflow in a sufficiently active manner.
Active management of money flowing in and out of the business is the most important factor in its survival. Remember, turnover is vanity, profit is sanity, but cash is reality.
The opinions expressed above are those of Business Link, not the BBC's. The advice is not intended to be definitive and should be used for guidance only. Always seek professional advice for your own particular situation.
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