It is also continually revised and updated as the business changes and grows. In the majority of cases, the biggest obstacles entrepreneurs face when operating a small business include managerial problems, inadequate financial support and lack of market knowledge. Market information is very important in all stages of the business as it identifies the direction which the business will take. A business owner needs to recognize the unique qualities of its product or service, which customer groups will be targeted, who are the major competitors, and market characteristics such as industry trends. Many entrepreneurs launch new ventures without the proper market research and analysis and overestimate the sales and market potential of the business.
Poor management is another factor contributing to the failure of many small business ventures.
Lack of management experience, including human resource management and internal financial management, are dominant problems in the growth stage of a business venture. Obviously, this creates time constraints and demands on the entrepreneur and the business operation. If not identified and resolved early, management may find it hard to overcome these problems throughout the development of the business. It is also important for small businesses to have adequate financial resources to assist in the future growth and development of the business. Most businesses fail due to financial problems such as inadequate working capital, cash flow problems and increased debt financing.