Some businesses are doomed from the start.

Even if the concept behind them is not inherently flawed, they never recover from decisions made – or decisions not made – before the first day of trading.

The annoying thing is that many of these mistakes are easily avoided, given just a little thought and preparation. They are, however, very hard to correct once operations have begun.

Here is a short checklist of foreseeable problems that can sink an otherwise sound business within months of start up:

1   Undercapitalising – the single greatest cause of business failure is underestimating the need for a secure cash reserve; 

2   Focussing on the product or service and not on how to sell it – possible the second greatest case of business failure;

3   Overspending on fripperies that can have no immediate impact on the success of the business in the crucial first few months;

4   Inadequate legal structures -  irrespective of how well you get on with your partners, clear boundaries are the only way to prevent the disputes that always develop as a business develops;

5   Inadequate financial controls – book keeping must be rigorous to the point of fanatical from Day One because there is little chance of catching up later if you let it lapse;

6   Nebulous management structures – employees will take advantage if it is not clear from the start who is in charge; and

7   Lack of definite purpose or strategic objectives – without a sense of direction, an enterprise will wander from one project to the next until it folds.