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10 Common Problems for New Businesses

Bad Business Plan

Too many entrepreneurs subscribe to the "paper napkin" fantasy; all you need is an ingenious idea scribbled on a napkin, and the millions start rolling in. The truth is that no new business has ever succeeded without a detailed and thorough business plan.

Writing a business plan will help you focus the mission and scope of your business, figure out exactly how the business will run and realistically project how much money the business will make [source: Spaeder].

A common problem for new businesses is that they rush a product or service to market without a clear focus [source: Henricks]. The result is that the business owner ends up chasing too many potential markets and new products. At the beginning, it's much more important to have a single focus with a proven client base.

All good business plans should include honest sales projections based on solid market research and competitive analysis. If there's another organic sandwich shop in town, don't expect your sales to be much higher. In fact, they'll probably be significantly lower at the beginning.

Think of your business plan as an investment in your future. If you consider every detail now, there will be fewer surprises later. To help you get started, check out the sample business plans available at the U.S. Small Business Administration's Web site.