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Combating Scarcity Mindset and Its Costly Impact on Your Business

I was recently at a conference where I was speaking on panels in my capacity as an author to writers aspiring to publish their fiction, and one of the panelists with me on the panel shared advice to these new authors that inspired this post.

The advice was all about how late they are to the game, how saturated the market is, how hard it all is to stay in this business and make it work as an author.

Whoa. 

That kind of thinking is really dangerous. For authors, and truly, all entrepreneurs. Because your thoughts drive everything, including your emotions, and if you're living in scarcity and victim mentality... it's no wonder you're having a difficult time. 

I share this not to judge that author, but to share in the hope that if you're reading this, you'll remember it. Because any time you find yourself thinking these kinds of thoughts, or speaking them aloud... as we all do sometimes (myself included!) we can catch ourselves and stop this kind of thinking in its tracks. 

So, that's why today I want to talk about something that can really hold entrepreneurs back - operating from a scarcity mindset.

A scarcity mindset is when you view the world through a lens of lack - seeing limited resources, opportunities, and possibilities everywhere you look. It permeates your thinking, vision, and how you approach situations. As entrepreneurs trying to build, create, and disrupt industries, having an abundance mindset is crucial, so I want to go through some of the dangers of a scarcity mentality and how you can shift your perspective.

1. Scarcity mindset distorts your perception

When you operate from a scarcity mindset, you tend to only see limitation and lack, even when that’s not necessarily true. Your field of vision narrows. Every business interaction appears zero-sum to you - if someone else wins, you lose. You think there’s only a small pie to draw from. But in reality, there are always new opportunities opening up, new markets being created, new collaborations taking shape. Having a scarcity mentality blinds you to possibilities. You start to see everything competitively, even relationships that could be collaborative. It changes how you view people, jobs, investments - discounting great opportunities because your scarcity filter makes you see only the flaws. Abundance on the other hand expands your horizon so you spot more opportunities.

For example, when you view a potential partnership through a scarcity mindset, you only see how that person could take advantage of you or compete with you down the road. You can't see how combining forces could open up new possibilities that benefit both of you.

Or you might view a talented new hire as a threat who could one day take your job, rather than someone who can help your team thrive.

A scarcity mindset also distorts how you view investments and new markets. You could look at a growing sector and only see how saturated it is already, thinking you missed the window of opportunity. But with abundance thinking, you see the newer segments and white space opening up in that market.

Abundance on the other hand expands your horizon so you spot more opportunities.

2. Scarcity mindset promotes unhelpful thinking patterns

Scarcity oriented thinking is often driven by fear and anxiety. You start overanalyzing everything, getting lost in worst case scenario thinking because that feels safer than taking action. You feel helpless to create the success you want, so you give away your power. With scarcity mentality, you dwell on what you don’t have versus what you do have. This thinking permeates every business decision and problem you try to solve. And that mentality of lack breeds more lack. Your thinking and problem solving from this scared place often leads to poor decisions. Abundance thinking on the other hand helps you act from possibility, courage and vision.

For example, when you have to make a big business investment decision, a scarcity mindset causes you to only look at the potential downside. You play through every worst case scenario and cannot see the upside potential. This paralysis by analysis prevents you from making a clear headed decision.

Or during challenging times, a scarcity mentality might lead you to catastrophize - thinking this one setback means your whole business is doomed. You feel powerless to turn things around because you can only see negativity.

You might also discount the talent and skills you already have on your team because a scarcity mindset makes you believe you'll never have enough to accomplish your big vision. This becomes a self-fulfilling prophecy.

An abundance mindset counters this by accurately weighing risk and reward, staying solution focused, and building upon existing strengths.

3. Scarcity mindset often leads to unproductive actions

Operating from scarcity has very real behavioral outcomes. You might overly fixate on a competitor rather than creating something new. You hoard connections, resources and ideas out of fear of lack, rather than collaborating to unlock new value. You nickel and dime costs rather than looking at the bigger revenue picture. Worst of all, you make selfish short term decisions to protect what you have rather than thinking long-term. Your scarcity mentality stunts you. Now contrast that with abundance. You freely share ideas to get feedback. You surround yourself with talented people because you know that makes the pie bigger for everyone. You help others because you believe there’s more than enough success to go around. You think 10 steps ahead with visionary strategies, rather than reactive tactics. This fuels innovation, strong partnerships and smart investments.

For example, a scarcity mindset might lead you to avoid sharing your business challenges with peers or mentors, missing out on advice that could help you navigate issues. Out of fear of appearing weak, you don't pull together the support you need.

Or it might look like being overly secretive about your ideas out of fear someone could steal them. You lose out on constructive feedback to develop the concept further.

Scarcity could also tempt you to underpay your staff or hire the cheapest contractor to save money. But this often leads to lower quality work that costs more in the long run.

With abundance thinking, you are proactive about exchange of ideas, investing in top talent, and collaborating for mutual benefit.

Solutions

So how can you start shifting out of a scarcity mindset?

Focus on what you have versus what you lack.

- Make a list of existing assets - your connections, knowledge, capital. Recognize your starting point is likely more abundant than you think.

- Counter negative thoughts with gratitude for what is already working well.

- When you notice scarcity thinking arise, shift your focus to opportunities and strengths.

Look for possibilities and stay future-oriented.

- Do vision exercises to imagine expansive future scenarios, instead of limiting present obstacles.

- Set big, bold goals focused on growth rather than just stability.

- See setbacks as temporary rather than permanent. Stay focused on your larger growth trajectory.

Finally, adopt a mindset that there is enough for everyone.

- Share credit and opportunities with your team versus hoarding them.

- Collaborate with competitors on industry growth rather than zero-sum thinking.

- Invest in and uplift others. View everyone’s success as mutually beneficial.

The world we live in is largely shaped by our beliefs and perceptions. As entrepreneurs, your mindset matters immensely and becomes a self-fulfilling prophecy. If you see through the lens of scarcity, that’s the reality you will create. If you see the possibilities of abundance, you unlock that instead. So be aware of scarcity oriented thinking, and cultivate an abundance mindset as much as possible. It opens up the world for you and will empower you in everything you do.

xoxo - C