In the last several years, people have realized that they’d rather be their own boss than continue working for someone else from 9 to 5. As a result, it’s never been a more popular time to start your own business, and startups have flooded the U.S. economy.

Just last year, entrepreneurs founded 5 million new businesses in the U.S. That’s a 55% increase over the number of companies entrepreneurs began in 2019. But what may be even more interesting is that many of these startups were founded by new entrepreneurs.

In 2021, roughly one out of three new businesses were started by individuals who had never before owned their own businesses. Their bravery is commendable, but they’ll have to be more than courageous to survive the current commercial climate.

So few businesses survive beyond five years. They fall victim to everything from low cash, poor reputation, insufficient marketing, and even a lack of planning. But your company doesn’t have to let these things or anything else take it down. Here are five issues you should avoid when opening a business.

Issue #1: No Business Plan

Founding father Benjamin Franklin wisely said, “if you fail to plan, you are preparing to fail.” His words ring as accurately today as they did 250 years ago! In business and life, you need to plan if you want the best possible outcome.

Creating a business plan is a simple yet effective way to avoid some of the problems plaguing many small businesses. Studies have shown that about half of all new companies will make it to the five-year mark. Of those that do, 70% have a strategic business plan.

A business plan will help you lead and guide your organization in an organized fashion, increasing your chances of survival. But research shows that business plans don’t just allow companies to survive; they help them thrive.

Businesses with strategic plans are 7% more likely to have higher growth than organizations without a business plan. Therefore, a business plan is an absolute must if you don’t want to settle for solvency and aspire to create a great company.

Issue #2: Poor Insurance Planning

Another thing you must do when starting a new venture is to plan your insurance strategy properly. Failing to research your business insurance options is a huge mistake and one that could leave you under or over-insured when it matters most.

But business insurance is anything but straightforward. There are so many options, which makes determining what you genuinely need somewhat difficult. When in doubt, speak to your local insurance agent to get guidance before selecting an insurance policy.

In the meantime, there are some things you should know about business insurance. For example, two types of insurance are must-haves, general liability and workers’ compensation.

General liability protects you from basic blunders, like customers who slip and fall, accidental damage to a client’s property, and lawsuits. Workman’s compensation, on the other hand, protects your employees and your business when accidents happen. For example, a workers’ compensation policy will cover medical expenses, retraining costs, lost wages, permanent injury payments, and more if an employee gets injured on the job.

You should also understand how commercial property and commercial auto insurance work. These two policies aren’t must-haves, but most businesses will need one or both.

Every business has a location: a rented office or your spare bedroom. Commercial property insurance protects those spaces, and the valuables they contain, should the area become damaged or destroyed. Commercial auto works the same way. Whether you use a personal car or fleet vehicle for your business, you need coverage if a car accident occurs while you’re on the job.

There are a few more policies you should know about because they only apply to specific types of businesses. First, there’s tools and equipment insurance to protect expensive equipment and machinery in case it’s stolen or damaged. This type of policy usually applies to agricultural, construction, industrial, and some service-oriented businesses, like medical spas.

Professional liability and errors and omissions insurance are two more policies you may or may not need. These policies protect businesses providing professional services like medical care, accounting, and legal counsel. They’ll cover your business in the event of a lawsuit or if you make a critical error or omission in your work.

Issue #3: The Right Amount of Staff

Hiring staff is one of the most challenging parts of the opening and owning a business. When you start out, you don’t want to have too many employees because payroll adds up quickly. But you also need to ensure you have the support you need to successfully sell your goods and services.

And the scarcity of employees isn’t helping. The U.S. is suffering from a significant staffing shortage. Right now, there are 10.5 million positions available across all employment sectors and only 5.7 million unemployed workers.

Fortunately, the best way to address staffing is to start small and grow from there. Typically, adding more positions is far easier than terminating existing ones, only to rehire when you’ve (hopefully) scaled.

Issue #4: Failure to Delegate

Before hiring any staff, you need to create a plan to determine which positions you need and define their roles. This will help you divide the work and allow each team member to focus on their strengths.

Once you have your team in place, act on your business plan and allow them to do what you hired them to do. Many entrepreneurs struggle with delegation because their business is their baby, and they want to do it all. But they simply can’t.

You’ve invested in a team to support you, so let them do it. The best thing you can do for your business and yourself is to delegate as much work as possible, leaving only the absolute essential tasks for yourself.

Issue #5: Not Enough Cash

Running out of cash is one of the leading causes of business failure. So many small businesses get off the ground but have to cease operations because they don’t have sufficient funds to continue.

Avoiding the issues outlined here, like failing to plan, poor insurance selections, having too many staff, and not delegating, could make the difference between success and failure. By planning, getting the proper insurance, and leading a strong team, you’ll be well on your way to creating a thriving, successful enterprise.