The Rembrandt – 4-star Hotel in Knightsbridge, London

Small businesses are still the engine of the U.S. So before you invest a single penny in your new business, you need to conduct market research. But how do you know if your new business idea is any good? A common problem for new businesses is that they overestimate the size of their potential market. If you’re thinking about joining the ranks of the self-employed, then start by learning from the mistakes of others. The foundation of every successful business is a rock-solid idea. The following is a list, in no particular order, of the 10 most common problems faced by new businesses. Your best friend might think it’s brilliant, but what if your customers think it’s lousy?

You’re not so lucky. It starts with the market data you produced from census reports, feedback and competitive analysis. If you try to beat Wal-Mart’s retail prices, then you simply won’t make any money. And since you’re starting small, you won’t be able to get the lowest wholesale prices. It will take time to build relationships with suppliers. One of the most important elements of a successful business plan is a well-researched marketing plan.

To help you get started, check out the sample business plans available at the U.S. Small Business Administration’s Web site. The experts recommend planning for the worst, meaning at least two years before turning a profit. A common mistake of new businesses is to invest heavily in unnecessary luxuries like fancy office chairs or even an office at all! In your business plan, write up a detailed budget that will sustain you through those lean times. One way to save startup capital is to start as simply as possible. This is where a detailed and honest business plan can really save the day.

And managing all of those relationships will quickly take time away from more important business matters. A common problem for many new business owners is that they think they can do everything on their own. Find an experienced, highly recommended small business lawyer and pay him or her a retainer. This “one-man band” strategy might be a great way to keep costs low at first, but it’s not the smartest way to ensure long-term success.

All products and services have one or more target demographics. Census Bureau Web site and see how many older men with salaries above $75,000 a year (more likely to wear dress shoes daily) live in your area. Go to the U.S. Take a prototype of your shoe buffer to a technology or housewares show and solicit feedback from attendees and vendors. Now you have a realistic projection of the size of your target market. It would be much smarter to target 50- to 65-year-old men. An automatic shoe buffer isn’t going to sell well with 12- to 24-year-old females.

If you’re convinced that you will need to rent space for your new business, then it should be part of your business plan. Do you want high foot traffic? How much space do you need? Make a detailed list of the location’s requirements. Do you need visibility, or is it OK to be tucked away in a suburban office park? What are your zoning requirements? Will you need parking? Then you need to do research into the rental market.