Overcoming Scarcity Mindset
Considerations for SME Leaders, Owners and Entrepreneurs.
Small and Medium Enterprises (SMEs) are the backbone of the global economy, comprising 99% of the UK’s business population and 90% worldwide. These businesses drive innovation, create employment opportunities, and contribute to community growth. However, for the estimated 360 million SME founders, entrepreneurs, and leaders (these terms will be used interchangeably), the road to success is often fraught with challenges—financial, operational, existential, and emotional.
One pervasive internal barrier that can hinder growth and fulfilment is a scarcity mindset. Understanding this mindset, recognising its manifestations, and learning how to address it are essential steps for SME leaders striving for business success and personal fulfilment.
What is Scarcity Mindset?
A scarcity mindset is a way of thinking that emphasises limitations and lack. Coined by thought leaders like Stephen Covey and expanded by social scientists, a scarcity mindset often arises when financial, temporal, emotional and other resources feel scarce. In personal life, this mindset can lead individuals to feel that abundance in areas such as relationships, sexual intimacy, holistic wellbeing, spirituality, or finances, remains out of reach. However, in a professional context, it often manifests as a perpetual perception of insufficient resources (time, money), limited business opportunities (customers, clients), or a sense of professional or intellectual inadequacy—even when external evidence suggests otherwise.
This kind of mindset affects businesses due to the limiting impact on decision-making, relationships, and overall well-being. It can become particularly insidious. For entrepreneurs, it can reflect feeling ‘less-than’ especially if comparing themselves to seemingly thriving competitors.
Starting and running a business inherently involves uncertainty. Coupled with scarcity thinking, it can trap founders in a cycle of fear and indecision, hampering both business growth and personal satisfaction.
In more extreme cases, this perceived lack can reflect and perpetuate aspects of addict behaviour, especially compulsivity related to overwork whilst underearning and under-being. Addiction, by its very nature, is a disease which, if personified, would be a cruel person that thrives on creating lack and suffering for the individual until it consumes them. For SME business owners grappling with addiction or compulsivity, there can be opposing personal truths: a strong desire to build a successful, value-driven business while simultaneously believing there will never be enough opportunities or resources to achieve it—and that, conflated with their business, they themselves are inherently inadequate.
This mindset is fuelled by negativity, pessimism, and a zero-sum view of success, where others’ achievements are seen as personal losses. Despite the desire to excel, deep down the leader may cling to the painful belief that they or their resources are not enough, and this in turn can provide a sense of emotional safety, allowing them to remain small or invisible, avoid risks, and sidestep the potential for actual transformative success.
How a Scarcity Mindset Affects SME Founders and Leaders?
The scarcity mindset can have profound effects on leaders and their organisations, including:
- Reluctance to Invest Entrepreneurs may shy away from spending on initiatives that could yield significant returns. For instance, an SME leader might avoid hiring needed staff, fearing payroll costs, despite the potential to free up time for higher-value tasks.
- Burnout and Micromanagement Scarcity thinking fuels beliefs like, “If I don’t do it, it won’t get done correctly.” This leads to micromanagement, unsustainable workloads, and eventual burnout. Such leaders struggle to delegate, stifling creativity and innovation within their teams.
- Fear-Based Decision-Making Leaders may prioritise cutting costs over exploring growth opportunities, or cling to outdated methods out of fear. This survival mode prevents bold, risk-taking, forward-thinking strategies.
- Self-Worth Tied to Success For many SME founders, business outcomes are closely linked to personal identity. Fear of failure can lead to paralysis or overwork, in an effort to “prove” oneself.
These challenges highlight the need to address scarcity thinking.
How to Overcome Scarcity Mindset
So, what can leaders do to foster a more abundance mindset?
Shifting from scarcity to abundance requires more than just positive thinking. It demands a deeper fundamental change in perspective and behaviour. One of a few highly effective approaches that could be applied is integrated coaching, which blends psychotherapy and coaching to address the root causes of scarcity thinking while fostering actionable change.
Integrated Coaching: Unlocking Potential and Strategy
Integrated coaching combines future-oriented goal setting with deep exploration of the emotional and psychological patterns that underlie scarcity thinking. A skilled integrated coach could help SME owners and leaders to:
- Identify and challenge limiting beliefs.
- Explore formative experiences that shaped views on money, risk, and self-worth.
- Develop coping strategies for fear and anxiety.
- Separate personal identity from business outcomes.
- Build resilience and self-compassion.
- Encourage long-term thinking and strategic goal setting.
- Facilitate considered risk-taking.
- Support delegation, prioritisation, and effective communication skills.
Through integrated coaching, entrepreneurs could uncover the origins of their scarcity mindset and develop a roadmap for dynamic, growth-oriented actions. By working through these issues, leaders can cultivate a healthier relationship with uncertainty, embrace risk, and achieve their aspirations.
Practical Steps to Overcome Scarcity Mindset
If you’re an SME entrepreneur looking to break free from scarcity thinking, and receive all the wonderful things life has to offer, here are some actionable steps you may like to experiment with:
- Shift Your Focus
Regularly remind yourself of what you have and what you are, rather than fixating on what you think you lack. Daily gratitude practices can help cultivate this perspective.
- Invest in Growth
Whether through hiring, committing to professional and personal development or training, or adopting new technology, view investments as further steps toward abundance. Start small but commit to continued progress.
- Build a Support Network
Surround yourself with mentors, peers, and professionals who can provide valuable perspective and encouragement.
- Challenge Limiting Beliefs
When thoughts like “I can’t afford this” arise, ask, “Is this actually true?” Remember things change and what may be true today, may well be different tomorrow. Replace scarcity-driven self-talk with affirmations like “There is enough business for everyone.”
- Seek Professional Support
Consider working with an integrated coach or psychotherapist specialising in leadership development, workplace issues or entrepreneurial challenges.
From Scarcity to Abundance
Overcoming a scarcity mindset takes time and does not transform overnight. By recognising how this mindset holds you back and seeking the right support, you can turn fear into opportunity, stagnation into growth, and survival into success.
For SME entrepreneurs, shifting from scarcity to abundance is life changing. Not only will it enhance your business outcomes, but it will also pave the way for greater personal fulfilment, confidence, and joy. Remember, our thoughts shape our world. Abundance begins in the mind and ripples outward into every aspect of life and business.
If you’ve been wondering how to overcome a scarcity mindset, consider this your call to action. Take the first step today towards you and your SME flourishing, as you embrace a mindset of growth, possibility, and abundance.
To find out more about integrated coaching or psychotherapy for leaders, senior managers, business owners or entrepreneurs experiencing scarcity mindset, contact us by telephone at 07714 208837 or by email at [email protected]