Beware – scarcity thinking impedes profitability.

I’m in the midst of listening to “Scarcity” by  Sendhil Mullainathan, Eldar Shafir. It has a lot to do with behavioral finance, which is how people really act around money.   I was intrigued by a study they did that shows that our mental bandwidth is diminished when we’re faced with scarcity in our lives. A memorable example from the book is how sugar cane farmers have narrower mental bandwidths pre-harvest. But, after harvest, when there’s abundance, these farmers’ minds are able to think more clearly, remember things better, with more creativity and self-control.  

I’ve noticed, that it’s usual for people – men and women – to have narrow mental bandwidths around money and finance. What I try to do with clients is instill two senses – a sense of safety – and a sense of abundance that’s grounded in reality.  Maybe it’s a slight trick of the mind but it helps increase bandwidth so that they can think clearly to find some creative solutions to increase their businesses’ profitability. Beware – scarcity thinking impedes business profitability. I’m not saying life is unicorns, soap bubbles and monarch butterflies, I’m saying that you may not truly be facing scarcity in your business and that by focusing on profitability you’ll create some wiggle room for you, your business and your mental bandwidth.

The need for mental bandwidth