Knowledge vs. Capital – Business 101

Knowledge vs CapitalThere 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.

Add Some Tools To Your Toolbox

ToolsIs it important to learn something everyday?
As a parent, at what time in your children’s development do you feel that they can quit learning?  We know that our children will have a different opinion.  They go through growth periods when they feel they are topped off.  They know all that they will ever need to know.  With our wisdom, we know that they will need more so we wait for the moment when we can continue to teach, coach and mentor.   But as a parent, when do we know it all?  Would our parents accept that we know everything or would they simply wait for the moment when they could continue to teach, coach and mentor?

We feed our child in order to support physical growth.   We teach our children in order to stimulate mental growth.  When the child matures physically, we continue to feed him, to maintain the integrity of the body.  But when is the child’s mental growth completed?  At what point do we no longer have to teach our children or young adults?  Most people would say that, as a parent, we are always teaching or coaching our children through out their/our lives.  So as parents, when do we no longer have to learn…to add knowledge?  When do we reach the point when we know everything?  I hope the answer is ‘never.’

Where we are today is based on the decisions that we made using what we have learned up until this day.  Where we will be tomorrow is based on what we have learned and will learn today.   If we choose not to learn today, not to add to our foundation, our tomorrows will be the same as our todays.  If we want changes in our tomorrows, we must start today.  Today is the foundation for our tomorrows.

Our Cerebral Toolbox
Knowledge is like the tools in a toolbox.  Each bit of information that we have is a tool.  If we choose the wrong tool (bad information), we get a bad result.  If we choose the right tool, we get the job done.  If everything we know is represented in our cerebral toolbox, then we are limited by our tools…our knowledge, what we have learned to this day.

But what if we keep adding tools to our toolbox?  Some of the tools we may never need.  Some we don’t even know how to use.  Some tools are there just in case.  The fact that the tools are in our toolbox means that we are no longer limited to the things we can fix.  We can fix anything.  A challenge is nothing more than the task at hand.  But the important thing is we can also build anything.

Knowledge is the foundation.
Knowledge is the foundation for all the decisions that we make each day.  It allows us to recognize, understand, accept or reject change.  It supports growth and creativity.  Diversity and creativity is a function of how we use what we have learned.   It we want to enhance the growth process and inspire creativity, we have to continue to add knowledge to our foundation.  We must continue to learn in order to grow.

If we limit the size of the foundation, we limit what we can build on that foundation.  If we continue to add to our foundation, we expand the potential for growth, diversity and creativity.   Therefore, it is important for us to continue to add knowledge…to continue to add to our foundation.

Knowledge is static. It is just information. It’s the facts as we interpret them.  Using the same information over and over is like washing your face with the same water.  Over time, with out any new water, you are washing with dirty water.  Over time, if you don’t add to the knowledge that you already are using, you will be doing the same thing over and over and expecting different results.

Broaden and strengthen our foundation.
There are only two ways to learn.  We learn from personal experiences and from the experiences of others.  Our personal experiences are limited.  The experiences of others are unlimited in potential but limited by one’s desire to learn from them.  We don’t have to jump off a cliff to see if it hurts.  We just have to read the story of how the man felt when he hit the ground.

Other peoples’ experience comes in two forms:  the people whom we meet and the books that we read.  You can only meet so many people.  We must surround ourselves with coaches and cheerleaders and avoid the people who want to keep us in their comfort zone.  Look for the people with the green or checkered flags and avoid the people with the yellow or red flags.

Thirty Minutes for a Dream
Eighty-five percent of the population do not read one book a year.  Less than one percent read more than one book a year.  One hundred percent of the population spends fifteen minutes twice a day in the smallest room in their house.  Thirty minutes a day reading would translate to one book per month or twelve books a year.  Thirty minutes a day reading would distinguish the individual in the top one percent of our population.

If one of the twelve books that you read each year is a self-help book, you are in an even more elite or distinguished group of individuals.  The most successful people focus on growing themselves and growing the people around them.  Success is a function of personal growth.  Success without personal growth is nothing more than a win.  Success with personal growth becomes a lifestyle and a legacy.

Think of your bookshelf as your toolbox.  Each book you read adds a tool to your toolbox.  The more tools that you have, the more things you can build.  The universal tool is personal growth and this tool will build a strong and broad foundation. When a man buys a drill, he is looking to make a hole.  When a man buys a hammer, he is looking for a nail.  But when a man buys a book, he is looking to build the foundation to achieve his dream.  Fifteen minutes twice a day!!!