Business Fails Without Knowledge

by Dan Robles on 06/19/2012

The top ten reasons for business failure are due to a lack of knowledge, not a lack of money.  In fact, the lack of money is itself a failure of knowledge.

Top 10 reasons why businesses fail

1.    Lack of an adequate, viable business plan?.

2.    Insufficient sales to sustain business

3.    Poor marketing plan: unappealing product, poor customer identification, incorrect pricing and lackluster promotion

4.    Inadequate capital, misuse of capital and poor cost control

5.    Poor management skills: lack of delegation, leadership and/or control

6.    Lack of experience and knowledge

7.    Lack of managerial focus/commitment

8.    Poor customer service

9.    Inadequate human resource management

10.    Failure to properly use professional advice: i.e. accounting, legal, financial, etc.

No excuses:

Lack of a viable business plan is an act of negligence where research, scenarios, and assumptions have not been tested.  Market ignorance is not an excuse nor is the failure to know one’s customer. Death by poor marketing plan is knowledge deficiency related to product appeal, customer identification, pricing structure, and lackluster promotion.  Obviously, one needs to know how to manage a company in order to be focused, let alone correctly estimate capital needs. Lack of customer service knowledge is deadly in the age of social media. Inadequate HR is an oxymoron – if it’s inadequate, it’s not a resource – human or otherwise.  Finally, failure to listen to knowledgeable people is ego driven irrationality.

The financial system is not the only problem;

The innovation system (or lack of) is a crucial element. Information, knowledge and innovation, by any definition, are profoundly and inseparably connected.  A failure in one kills the other two.  So, just because an entrepreneur does not have the knowledge, does not mean the ‘knowledge’ fails to exist – it simply means that entrepreneur failed to find it.

So where is the knowledge?

Unfortunately, there is no public knowledge inventory – people do not know what each other knows.  With social media raging all around us, there still is no way that anyone can assemble the knowledge needed to execute a business plan with a known probability of success given the information available.  As such, there is no way to finance public innovation.

The emergence of Social Media technology presents an extraordinary opportunity to organize a knowledge inventory outside the construct of a corporation and marry it to the financial system, much like a corporation.

Tangibility of Knowledge

Knowledge tangibility must be the most important “innovation” in the pipeline today if we expect to meet the crushing challenges that await us.  Just because we cannot predict innovation does not mean it cannot be predicted – it just means that we do not know how… yet.

{ 20 comments }

scrapbooking supply August 23, 2013 at 3:36 am

This is the right web site for everyone who wishes to find out about this
topic. You know a whole lot its almost tough
to argue with you (not that I really would want to…HaHa).
You certainly put a fresh spin on a topic that has been written about
for decades. Great stuff, just wonderful!

web application development August 14, 2013 at 10:55 pm

Thanks for sharing your thoughts about social value. Regards

wei October 4, 2011 at 2:11 am

Inadequate HR is an oxymoron. Inadequate HR MANAGEMENT isn’t

John Maloney June 6, 2011 at 12:34 pm

Hi –

Business fails because it doesn’t fail enough! Fail Early, Fail Fast, Fail Often —

http://www.fastcodesign.com/1663968/wanna-create-a-great-product-fail-early-fail-fast-fail-often?partner=co_newsletter

Cheers,

-j

Alex Hall July 2, 2010 at 11:45 am

Business Failure is Knowledge Failure – http://www.relationship-economy.com/?p=10907 #socialmedia

Alex Hall June 30, 2010 at 3:56 am

http://www.relationship-economy.com/?p=10907 – Business Failure is Knowledge Failure

Alex Hall June 29, 2010 at 8:56 am

Business Failure is Knowledge Failure – http://www.relationship-economy.com/?p=10907

Business 3.0 Tech. June 28, 2010 at 6:07 am

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andrew washington June 27, 2010 at 10:51 pm

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Gavin from Sendible June 27, 2010 at 12:48 pm

Business Failure is Knowledge Failure – http://bit.ly/8Y0kCb

Linda Schenk June 27, 2010 at 12:21 pm

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Allen Howell June 27, 2010 at 11:15 am

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JobShoots June 27, 2010 at 11:12 am

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JobShoots June 27, 2010 at 11:12 am

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Alltop June 27, 2010 at 11:12 am

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The Social CEO June 27, 2010 at 10:53 am

The Social CEO Business Failure is Knowledge Failure:
The top ten reasons for business failure are due to a lack… http://bit.ly/a10LB2

Angela Suddarth June 27, 2010 at 10:53 am

[email protected] Business Failure is Knowledge Failure:
The top ten reasons for business failure are due to a lack of… http://bit.ly/a10LB2

Achievers Network June 27, 2010 at 10:37 am

Business Failure is Knowledge Failure: The top ten reasons for business failure are due to a lack of knowledge, no… http://bit.ly/cCFyqN

Aron Stevenson June 27, 2010 at 10:37 am

Business Failure is Knowledge Failure http://bit.ly/9R0jHE #socialmedia

StarGazon June 27, 2010 at 10:01 am

Business Failure is Knowledge Failure via The Relationship Economy – The top ten reasons for business … http://tinyurl.com/23hk7n4

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