New companies and firms launching fresh products and services need to road test ideas before finalising business plans if they want to increase chances of success, claim experts.

While there has rarely been a better time to start a business or back an idea statistics show that more than 80 per cent of new ventures will fail within five years without rigorous testing and evaluation at the outset.

While resources are comparatively cheap, competitors preoccupied with survival, and the major political parties are counting on entrepreneurs to lead the UK economy to recovery the road to becoming the next Richard Branson, James Dyson or Anita Roddick is likely to be a tough one.

"The most common reason start-ups fail to make the transition from first to fifth gear is that the big idea for the business doesn't stand up to the rigours of the real world. Ideas need to be road tested well before the business plan is written," said Professor John Mullins of the London Business School and author of 'The New Business Road Test - What Entrepreneurs and Executives Should Do Before Writing a Business Plan'.

“Most business plans are written too soon, without of shred of real evidence to back up their assertions,” said Prof. Mullins. “Instead of rushing to write a business-plan it's much better to test drive a concept and see if it is truly business-worthy.”

No matter how talented a person is, no matter how hard they work and no matter how much capital they invest the majority of businesses will fail unless an idea is given a rigorous, critical examination at the outset.

Our View
Everybody who has an idea for a business and starts a company is confident that it will be a huge success..

Unfortunately, all too often the old saying that confidence comes before a fall is correct. Everybody wants their 'baby' to grow, survive and thrive but it's easy to become too emotionally involved to see the problems and possible faults.

As business improvement specialists it is our job to help owners take a step back and look at their plans with a fresh eye and to test them to the limit of destruction.

“It is true that few battle plans ever survive contact with the enemy, and the same can be said in business.

Every business needs to establish its goals, vision, aspirations and ensure it can deliver what it promises by going through the process with a third party who is able to play Devil's Advocate and provide constructive ongoing criticism.

There is much more to forming a business plan than plucking figures and objectives out of thin air. It is absolutely true that failing to plan really is planning to fail.