dealing with a scarcity mindset

Summary

scarcity mindset is the entrepreneur’s specialty disease. abundance mindset is the influencer cope. the right answer is somewhere in the middle, and the way you get there is by being honest about what’s actually scaring you.

the protocol I use, lifted from Tim Ferriss’s fear setting:

1. self-awareness first. catch yourself in the spiral. notice when the same dark thought is on loop in the background while you try to work.

2. write down the worst case. all of it. the specific worst-case scenario, in plain English, with no softening. what would actually happen? what’s the cost? who would be affected? most fears shrink the moment they have to fit on a piece of paper.

3. separate problems from risks. problems are things happening right now that you can act on. risks are things that might happen. for each problem, write the specific next step. for each risk, write the mitigation. now you have a list of moves instead of a fog of dread.

4. take one action today. just one. the spiral runs on inaction. one real move in the direction of the problem shuts it down faster than any breathing exercise will. scarcity isn’t fixed by reading another book. it’s fixed by doing one hard thing the brain has been avoiding.

Transcript

introduction to the episode and discussion on the scarcity mindset

The most impactful business is the business that genuinely improves another human, a better human business. And to grow a business like this, you have to continually improve yourself. This podcast is a documentation of that thesis, scaling businesses and also personal growth. My goal is for you to shortcut this journey.

So if you’re ready to try hard, subscribe. If you like what you’re hearing, please share and enjoy. All right. How do we deal with a scarcity mindset without just pretending like nothing’s a problem and everything’s going to be OK? Because I really feel like those are the two like camps for scarcity and abundance.

It’s like scarcity is like, ah, the sky is falling. I’m going to lose all my money. Nothing’s ever going to work out. But then kind of the answer sometimes from the woo side is like, no, money is flowing like a river and everything’s perfectly fine. You’ll never have to worry about anything. And I’m just like, I’m not I’m not really in either one of those.

personal experiences with scarcity mindset and its impact on business decisions

I tend to sit in the middle. So I want to give you some tactical steps on how to deal with the scarcity mindset, because if you’ve been listening to this podcast for any length of time, you know, I struggle and have struggled with a scarcity mindset for a long time. It’s gotten a lot better over the years.

But it is something I have dealt with on and off, especially early on in entrepreneurship. I dealt with it all the time. This is the Better Human Business podcast. I’m Jerred Moon. So, you know, it happens, right? It creeps in. Something will happen to get you spiraling out of control, and there are different levels of scarcity and anxiety.

There’s like. You start to maybe you see a number move in business starts to move a little bit and a negative trend and that can maybe that spirals you. It’s like, oh, man, like I’m the business falling apart like I got to do all these things. That’s a level of scarcity. Then there’s like an extreme level of scarcity, anxiety where you are buying gold bars and storing food in your basement.

detailed explanation of fear setting and how it helps manage anxiety

You know, that’s that’s like extreme level, right? Not saying anything’s wrong with that. Hey, I got a little bit of all this in me, but that’s kind of the extreme level. And then there’s even the other level where like when things are going too good, scarcity hits you. You’re like business is growing rapidly or something great is happening.

And you’re like, yeah, but can this happen forever? Scarcity can ruin every single thing. I know you’ve probably felt like being in one of those camps as an entrepreneur. I definitely have. And it happens to me all the time. And I was having a conversation with an entrepreneur recently about this, like he really wanted to know, like, no, like, what did you do?

Like, what do you do to get rid of it? Don’t don’t give me like the random, like, think happy thoughts, think positive thoughts like what do you do? And so here’s what I do. I’ll tell you exactly what I do to try and deal with a scarcity mindset. But I’ll say the first thing is you have to realize there has to be a level of self-awareness that you’re experiencing it.

the importance of data-driven decisions in business to avoid panic-driven reactions

And sometimes that can be hard for people because you might think that your thoughts or whatever is running through your mind is rooted in some sort of truth or belief and you don’t even stop to think like, hey, is what I’m thinking just scarcity? Is what I’m thinking incorrect? Is there even any truth to what I’m thinking right now?

And if you can have that level of awareness, you can just realize like, hey, I’m freaking out about something. I don’t know if this is valid or not. I think this might just be a scarcity mindset. If you can stop there, then here’s what you can do. And it’s going to involve a piece of paper and a pen.

It’s journaling. But here’s the exact thing that you can do. So let’s say you actually notice, let’s take one that happens to lots of business owners. Things aren’t trending in the right direction. Okay, you know, you notice some data like leads are down, revenue might be down a little bit, something, some legitimate data is down.

how hiring an executive assistant helped refocus on business growth and reduce scarcity fears

And you’re not 100% sure why you haven’t changed anything. And you think it starts the spiral, like you just start to spiral a little bit, you get super concerned. You’re like, well, what if it’s the economy? What if it’s a competitor? What if it’s something outside of my control? Like what if, you know, things are falling apart?

What if I can’t maintain this business? What if I can’t do this? What if I suck? What if I’m the worst? You know, and maybe you, you spiral out of control like that. Well, the first thing that you need to do is what I call, Tim Ferriss actually introduced me to this idea called fear setting. So fear setting is the opposite of goal setting.

Fear setting is where you actually write down the worst case scenario. Like just take whatever you’re like worried about right now, just take it all the way out. Journal it out. What’s the worst case scenario going to be? Because this really helped me early on because for some reason in my mind I had this idea.

closing thoughts on maintaining balance and moving forward despite challenges

It wasn’t an idea as more of it was a feeling that if I fail as an entrepreneur when I was first getting started, like for some reason I felt like it was life or death. And I think it’s because I wanted to be an entrepreneur so badly, I just did not want to go work for someone else. I just wanted it so badly that I just, I didn’t see failure as something that could even be an option.

So I just felt like if I were to actually fail, that would be the death of me. And to be honest, it may have been, it may have been like the death of passion for me. It may have been the death of a lot of different things. It could have been the death of something, but not my actual death. You know, failing an entrepreneurship is not going to be my actual death.

And so fear setting, you write all this down and what you realize when you do this exercise is it might not be as bad as you think. Like even if, you know, my world fell apart, all of my businesses failed, I had to sell my house, like I had to declare bankruptcy. All those are terrible, terrible things.

I don’t want to go through them, but let’s just say I do say that’s, that’s in the cards for me. Okay. I can write all that out. Uh, okay. What happens? Okay. I don’t have a business anymore. I still need to make income. So I’m going to go get a job again. Not what I want to do. I’m not planning for this, but I’m letting my mind just like, I’m letting my mind do what it wants to do.

You’re saying you want to think about how bad things can get. Sure. Let’s do it. Let’s go all the way. And then I’ll be okay. So I have to get a job. Where might I get a job? Cool. I know I’m not going to go like through every single detail of what I would do, but it’s like, okay, I’d have to update my resume and here’s where I would look for a job.

Boom. I’m looking for a job. I probably get a job that pays decently. Oh, I got to sell my house. Oh, okay. Well, you got enough equity in your house to pay off one of your rental properties and live in a new house, completely rent free. This is me personally. Like no mortgage. Like you could easily, I could easily do those things, right?

Like these, these are not that bad of scenarios, right? Like I still have an awesome house in the same town, um, but I had to sell my house and like sell some other assets maybe. And it’s like, oh, okay, well that’s what you had to do to support your family. You need some, some cash, so you sold some, some assets.

Not that bad. Right? So I sold my house and I got a different house, you know, because I had to sell a couple assets just to, to keep things afloat. And again, that’d be absolute worst case. That would mean the business like actually ended tomorrow. Not like a slow death. If it was a slow death, all these things would be way more manageable.

If I’m talking about like just for some reason, no money, money stops tomorrow, which I don’t even think that’s possible. Like I just, I don’t even know. Maybe if the world banking system collapsed, so that’s a much bigger problem that I don’t need to worry about. So anyway, I’m going through all these scenarios and I hope you realize what I’m getting at is like, okay, in my worst case scenario, that’s making me freak out.

I have to get a job somewhere and I have to live in a different house and I have to sell some of my assets, which I really don’t want to sell just to be able to support my family. Um, okay. That, that doesn’t sound too bad, right? And then I could pick myself up, dust myself off in my free time. I could take another stab at being an entrepreneur.

It’s just really not that bad, you know, and that’s the worst case scenario for me. Now a lot of people can run into worst case scenarios for a lot of different reasons, but most of the time when you actually do this journal, journaling, a fear setting, you’ll realize it’s not that bad. It’s really not that bad.

It might not be your desired outcome. Maybe you worked really hard for what you have and you don’t want to lose anything. But Hey, my, like my standard is that I’m with my wife and my kids and they’re all taken care of. And I’m talking about like in the minimal standards, like we all have food, water, shelter.

I’ll still be happy cause I’ve got my family and that, that’s my, that’s my minimum standard. When your standard is, is that there’s nothing really in business that can happen that’s going to like screw me up. Right? So, so try fear setting. But the second thing I do is sometimes you have actual things pop up going back to the original example.

Leads are down. Revenue might be down. It starts this, uh, the spiral. Now what I don’t want you to do is just say, well, worst case scenario, the business dot, you know, the business dies and I have to do all these things and okay, I’d be fine cause I’m not just trying to, I don’t just want comfort.

I also want to solve the problem, right? If there’s an actual problem. So there’s like two levels here. So what one, if I, if I’m like actually writing down what’s the risk, if I, if my level of fear and anxiety is really wanting to answer the question, what if all my money was taken away and my businesses were taking away tomorrow, there’s, there’s not really a chance of that happening.

Even if those things started to happen, it would have to happen over a long period of time. Right? So what I would do with an idea like that is I would toss it out. I’d write it down on a piece of paper and I’d scratch through it. I’m like, look, dude, I don’t know if anybody’s actually lost all of their wealth and all of their businesses overnight.

I don’t, you know, other than maybe some legal proceedings, but even that seems like it would take some time. So anyway, I’m going to toss that out. I don’t let my mind go with these crazy scenarios. Like I just don’t let that happen because it’s not helpful if it’s not really possible. I don’t see any way to any reason to spend time on it, you know, so on and so forth.

But there are other things that pop up that may be led to that crazy anxiety, that crazy level of scarcity that are smaller things like your leads are down or your revenue’s down. Those are actual risks. You are identifying actual problems and those are okay to dwell on. So you can go ahead and write down any risks or any actual data that’s happening and then you can start to plan and prepare to mitigate risk or to, you know, fix problems.

You can start to do all those things. And again, this is all part of the journaling. Step one, write down the worst case scenario of what could happen because I went big picture to show you just like if you were thinking like your life’s falling apart. But in all reality, if you’re like going on a smaller scale of like, hey, leads are down 20%, what does that mean for the business?

You could fear set that out. You can do fear setting for, okay, reduction in leads down by 20%. Calculate out worst case scenario, what that’s going to mean revenue wise. And if you get to the end of that and you’re like, oh, wait, good. I don’t have to fire anybody. I can still be paid. But you know what?

We really need to focus on growth here. And also that it just like calms your mind down of like, okay, this huge reduction is not going to crush the business. Like we can still survive, but I absolutely need to, you know, fix this problem. So now you can go to step two, which is of all the things that I’m thinking, all these scarcity based thoughts, are they legitimate?

Are they actual risks or the actual problems that need to be solved? So problem versus a risk. A problem is something that’s actually happening in your business, like leads being down, or you’re not converting as high. Those are problems that you can solve. Now a risk is something that could be outside of your control.

And that’s just risk we take as business owners. That could be competition. That could be economic factors. These are all risks we take in just owning a business. So how do we mitigate those? Well, if you want to mitigate possible economic concerns, you just need a lot of margin. Maybe focus on being more profitable.

That’s how we mitigate that risk. So if the business does shrink based off economic reasons, you’re not as concerned, right? But if you’re running up to that wire where you have basically no profit and your business can’t survive for more than a month, if things were to take a dip, that’s not a scarcity thing, right?

That’s not a scarcity based thing. If you’re running so margin thin on profit that your business couldn’t survive for a month or two, that is something that can be fixed. You can decide to be more profitable and have reserves in the business so you could stay afloat for three months, six months. You see how some scarcity based thoughts are rooted in truth that might need you to take action.

And that’s why you use part two here is one, what’s the worst case scenario? Two, how do I mitigate risk and how do I solve problems? And now you’re getting to action steps. And I feel like once you’re there, once we’re in a place where we can start taking actions, anxiety and scarcity start to disappear because first you’ve been like, okay, worst case scenario, this is what happens.

Once you realize it’s not that bad, that kind of alleviates some fear, some scarcity, some anxiety that immediately starts to calm down. But then once you get down to like, okay, this is how I plan to mitigate all the risks that are associated with my circumstances right now and here are all the problems I’m working on to solve.

And I’m taking action step by step, brick by brick, I’m doing all these things. Now you really realize you don’t have to worry as much. You don’t have to worry as much because you’re taking those actions. There’s nothing else that you can do. Doesn’t matter if you still have the problem. You’re taking actions.

That’s the only thing you can do when there’s a problem or something that’s legitimate is try to work on fixing it. That’s all there is. And once you start focusing on those, you would start to deal with scarcity a lot less. But to do so, you’re going to have to try harder.