Start-up firms should make sure of their financial security before they even launch, one industry body has warned.
A spokesperson for the Federation of Small Businesses (FSB), explained that up to a year of planning is needed before a new company can be launched.
This time should be spent looking at competitors and identifying how to target potential customers, as well as money matters.
He said: "You do need to have quite a lot of financial back-up and quite a lot of leeway if things don't go to plan.
"If you don't make as many sales as you thought you might in your first year then you need to have something to fall back on so."
This is even more vital in adverse economic conditions, he added.
Research by Barclays found that more businesses were launched in 2007 than in any year since the bank began keeping figures on the subject in 1988.
