There is an old saying that most businesses fail because of lack of knowledge or lack of capital. Capital can be hard to find and easy to lose. Knowledge is easy to find and hard to lose. Knowledge is abundant and available, and once you have it, you can’t loose it. Capital is worthless if not use properly. Knowledge, on the other hand, can be used over and over, even after the capital has been lost. It’s called learning from our failures or from our mistakes.
Knowledge is the critical ingredient for successfully executing a business plan. The learning process involves three phases: Creative Analytical Execution. Each phase requires an investment of time and patience in order to maximize benefits. It is interesting that when we look at a business that is in trouble, the cause and the solution to its problems will be found in one of these three areas. Like planning a trip…decide where you want to go, learn how to get there, and then go. And people who get lost on vacation either didn’t know where they were going, didn’t get directions or didn’t listen to their GPS. They think they know.
Grandpa’s wisdom says ‘when you think that you know, you probably don’t and when you think that you know everything, you don’t.’ The entrepreneur is the innovator and almost by definition likes to do things his way. Because it is his idea, he thinks he knows. But what he really knows is the creative phase. He will often discount the analytical and execution phases. “I know it will work.” “Everyone will buy it.” “We’ll make millions.”
Successful entrepreneurs have learned to surround themselves with talent that can help them implement their idea. The entrepreneur is the creative thinker, but effective use of analytical or critical talent will facilitate the development of a successfully executable business plan. Once the Creative and Analytical phases are complete, then there is a business plan and the entrepreneur needs to bring in business talent to execute his plan. This is the Execution phase.
Statistically, most of the money made from inventions have been made by the businessmen, the implementer and not by the inventor. This is not a bad thing. It just shows that the person with the knowledge has the advantage. So where does the innovator, the entrepreneur, the man or women with the great idea get the knowledge to turn that idea into a dream come true? The information is all around us. There are books, courses, and people available to help. All that we have to do is have patience and willingness to invest the time to learn.
Successful people know that they don’t know and surround themselves with successful people who know and then they listen. Unsuccessful people surround themselves with people who might know and then they talk. We have two ears and one mouth for a reason. Two ears because we have a lot to learn and only one mouth because, when we use it, it interferes with what the ears are trying to do.
In the book, “It’s Not What I Know…It’s How I Learned It” the author talks about his board of directors. His board was made up of people whom he was familiar with how they think and how they made decisions in their lives. Some were biblical and historical figures, some were successful businessmen and women, and some were family members. He said that when he was in the process of making tough decisions, he would simply ask, “What would dad do?” “What would Reagan do?” “What would Jesus do?” He would tap the brains of his board of directors.
How many people do you have on your board? You are the chairman of your board. When you look around your boardroom table, who do you have looking back at you? It could be Mom and Dad, a favorite uncle, grandpa, president Lincoln, Winston Churchill, the pope. It could be the hero of a book that you read or your favorite author. The more people on your board, the more knowledge you have to help you make good decisions. It takes time fill the seats around your table. That is the investment that you make to be the man with the knowledge.
If businesses fail because of lack of capital or lack of knowledge, then conversely, businesses will succeed when there is adequate capital and sufficient brainpower and it is used properly. When the entrepreneur shows that he has the knowledge to implement his idea, a business plan to follow, and the intellectual resources to execute his business plan, then the capital will appear.
The most successful businessmen have many failures but they just don’t quit. They turn every failure into a learning experience. They have a little more knowledge than the man who failed and then quit. The man with the knowledge is the man with the advantage. Have patience. Make learning a habit. Turn failures into an advantage.