As a city official some years back, I witnessed small business owners rail against the system that they blamed for their lack of sub-contracting opportunities, inadequate financing and cash flow. At financing workshops where this occured, participating lenders would listen to these complaints and respond that "If you will just provide us with a viable business plan and financially sound proposal, we will entertain any application for funding".

One way to increase your chances of small business success is to become keenly aware of the typical reasons many start-ups fail and try to avoid the same pitfalls. While there are numerous causes of failure, below may be the top five reasons:

1. Lack of adequate financing

Perhaps the number one reason new businesses fail is due to insufficient funds to start up, operate and grow. Many new enterprises fail to impress lenders of their potential to pay back financing or investors of their growth potential. Often the problem begins with under estimating the amount needed for start-up and deteriorates from there.

2. Poor marketing efforts

Potential prospects must be aware that "the store is open" so to speak. Some new entrepreneurs do not know how to find prospects with a need for their product or service and an ability to pay. Rose colored glasses can become foggy without an understanding of what makes their customer tick. The result is a good idea going down the drain before it had a chance to catch on.

3. Failure to assess the competition

Many new entrepreneurs view the world in the isolation of their great idea. They fail to realize that they will be watched by others in the market or that others with greater resources may enter the market to seize upon their new widget. They launch on the strength of their product or service knowledge without a clue about how they will deal with the competition.

4. Poor organization

The inability to marshall finances and human resources into a well thought out chain of action steps will not escape the view of investors. Again, it is not sufficient to conceive of the best widget since sliced bread, you must show how you are going to progress from start-up to standard operating procedures and on to expansion and growth, if that’s your goal.

5. The lack of a contingency plan

It's easy to imagine how things are supposed to work when every thing is flowing smoothly, but what about when important equipment breaks down or a supplier cannot deliver? A new business carries the responsibility of not only it's employees, but its financial investors Failure to take into account potential emergencies has brought down many promising ventures.

The common factor flowing through these five reasons for failure is the lack of planning..Many give business plan preparation the short shrift. The glow of the new idea is so bright there is no time for planning. Check out the typical consulting service request " im meeting with an investor Friday, I need a winning business plan and financials pronto."

If you were asked to invest your hard earned money in a new venture would you risk it based on a slipshod plan thrown together in a hurry? Just how well do you think a cookie-cutter business plan template competes against one developed with a thorough industry and market analysis. I love the entrepreneurial spirit, but people please; take the time to plan or your idea will become another statistic

Business Plan Development

Knowledge is worthless if its not accessible. Forget expensive consulting fees, forget travel and registration fees associated with workshops and seminars!