Lack of planning, planning, planning (there can be other reasons too, however, this is one of the major reasons)
Not that everything needs to be planned. However, without a plan, we never know where we are at. Having just a mental map is not going to work as your organization is growing and if there are multiple products that need attention.
We might not have all the information while we start to plan. However, it should start with allocating what resources we have like budget, time and people.
The main fuel here is budget. Without knowing the right budget you might hire too many and exhaust your budget before the specified time. And you have to let go of some of the employees you’ve hired. You’ve lost brand value (reputation).
Also, you’ve spent time and money recruiting these employees. Moreover, the emotional state of these employees may be damaged. And the morale of the internal employees may fall. More employees may leave you. This might cost you more.
Again, if you do not know the right budget you might hire too little and run out of both time and budget (because it might take more time) and will lose your business/client, competitors can seep into the market or your product might not be valid anymore.
Hence, it is important to know the budget. This is when everything is constant and where we can have some control to manage the situation.
Adding to that the external macro-environmental variables like PEST might have an impact on the budget or customers/clients might leave you or not pay you or they can go out of business. In these situations, we do not have much control to manage it.
Hence, need to have a budget plan depending on who you are (SME or LME) and for what project/product (is it for major, cash cow (enhancements), minor) and how big (important) is it.
Considering these factors the contingency ratio should be applied, 60:40 or 80:20 or any ratio that might be best for you after evaluating and for the project/product.
SME should be more careful because there might not be many resources (money, time, people) that can be switched or borrowed as this might cost you more. Being an SME, in this competitive world, you might not want to lose your market share or your clients.
Hence balance your budget. I understand nothing is perfect. Therefore working towards little perfectness might be the difference to achieving the goal. At the same time, empower your business and employees with a plan.