by Michael Crozier

Created on: November 21, 2007   Last Updated: June 22, 2009

Small business owners often make their biggest mistakes before they even open their doors. These tend to be costly mistakes and the reasons why between 90% and 95% of new businesses fail during the first year.

Before starting out, many prospective owners don't conduct a written feasibility study to determine the potential market and profitability for their business. Even the most original businesses, run by incredibly talented people fail because the market potential is too low, operating costs are too high, or for some other unforeseen reason. That's why successful large businesses never start a new venture or launch a new product before doing an in-depth study to determine it's likelihood for success.

A feasibility study for a small business simply analyzes the need for the product, potential market size and share, plus the anticipated revenue and profits. Usually, the feasibility study will pinpoint factors that need to be looked at more closely before time and money are committed to starting a business.

It's no secret that lack of sales is the main reason businesses fail. Even though sales are the lifeblood of every business, their importance in a business start-up situation is often overlooked.

Not everybody is a good salesman. In fact, most of us aren't and if our livelihood depended on our ability to sell, we'd probably starve. That's because many of us can't or don't like to sell. Business owners are no exception.

Just being an outgoing "people person, or having a way with people isn't selling. Selling involves prospecting, presenting and closing. And that takes time. If you're starting a business and don't have the talent, time or desire to sell, better hire someone who has. This holds true for any business whether it's a retail shop, a law firm or a multilevel marketing venture.

Regardless of size, every successful business needs a solid business plan containing sections dealing specifically with advertising and marketing, sales, pricing, product development and distribution, and of course, finances. The business plan serves as a road map to keep a business on a profitable course. Yet many owners start a business without a plan, or if they have one, never update it or stick too it. Working without a solid, current business plan would be like setting off to sea on a boat without charts, a compass, radar, sonar and a radio. You're bound to run into trouble and have a tough time getting out of it.

Advertising is another area where small businesses very often

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