The need for financial knowledge acquisition tools and technology by small business entrepreneurs

Panita Rachapaettayakom,Nuttirudee Charoenruk,Nagul Cooharojananone,Mongkolchai Wiriyapinit,Suparatana Tanthanongsakkun

doi:10.1186/s13731-020-00136-2

Panita Rachapaettayakom, Nuttirudee Charoenruk + Show 3 more

Open Access

https://doi.org/10.1186/s13731-020-00136-2

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Abstract

Knowledge management tools and technology are the main factors bringing competitive advantage to organisations. This study extends the depth of study on small business entrepreneurs by examining the effect of knowledge acquisition, in particular financial knowledge that leads to the need for knowledge acquisition tools and technology. There is evidence to support that a lower level of existing financial knowledge in small business entrepreneurs encourages them to acquire more financial knowledge since they tend to be responsible for all tasks related to business survival. This finding is not consistent with several other previous studies. In addition, relevant knowledge on how to raise adequate capital to establish their business and the accurate calculation of cost are the two most important aspects of financial knowledge for encouraging small business entrepreneurs to seek effective knowledge acquisition tools and technology. The evidence provides insight for the government authorities supporting small businesses to provide financial knowledge to small business entrepreneurs during the pre-start-up phase and thereafter by providing the relevant knowledge on financing and cost calculation to strengthen and sustain these businesses. This will ultimately lead to an improvement in small business failure and increase the country’s economic growth.

Highlights

The small businesses play an important role in contributing to the essential economic growth of many countries in the world, creating income and job creation
In contrast to previous studies, the findings from this study indicate that a lower level of existing financial knowledge leads to a higher level of financial knowledge acquisition due to the characteristics of restaurant entrepreneurs as new entrants, taking a central position with responsibility for business performance (Bridge, O’Neill, & Cromie, 2003)
This study provides a better understanding of small business entrepreneurs and the relationship between the level of prior knowledge as the basis for existing financial knowledge in restaurant business management and knowledge acquisition

Summary

Introduction

The small businesses play an important role in contributing to the essential economic growth of many countries in the world, creating income and job creation. Small businesses are the main drivers of economic growth, numerous small business entrepreneurs face failure (Hyder & Lussier, 2016). Small business entrepreneurs play multiple roles in the management of their businesses (Fuller-Love, 2006) and responses to business performance (Durst & Edvardsson, 2012). These entrepreneurs need information and knowledge to support their decision-making and problem. A reasonable explanation for more than 60% of restaurants failing (OSMEP, 2017) may be because small-restaurant entrepreneurs (“restaurant entrepreneurs”) can open a restaurant, even though they lack knowledge and experience, often resulting in closure after 3 years (Rachapaettayakom, Wiriyapinit, Cooharojananone, & Tanthanongsakkun, 2018). Independent 8 Level of exiting financial knowledge 9 Level of financial knowledge acquisition for financing Level of financial knowledge acquisition for record keeping and accounting Level of financial knowledge acquisition for cash management Level of financial knowledge acquisition for cost calculation Level of financial knowledge acquisition for business planning Level of financial knowledge acquisition for a feasibility study

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