The Power of Positive Thinking: Why Your Money Mindset Matters for Small Business Survival
Whether it's a recession, a market correction, or some other form of financial upheaval, sudden drops in sales can be scary and stressful for small businesses. In these situations, it's natural to feel a sense of scarcity: like resources are scarce, customers are scarce, and opportunities are scarce.
It doesn’t help when every day we are presented with fear-based media headlines such as:
- “NZ economy: Recession tipped to be twice as deep as earlier forecasts - ASB”
- “Thousands of job cuts: the economic storm set to hit Kiwi families”
Because these headlines all serve as evidence to our brains, reinforcing scarcity mindsets!
But, when we focus on the risks, and live in fear, it can be damaging for our small businesses, and it can even increase the likelihood of the very thing we are trying to avoid - going out of business.
The good news is, recessions or low sales markets don’t need to spell the end for our business at all! Unless your product or service is legitimately becoming obsolete, and you can’t pivot to stay relevant, then chances are there are still plenty of opportunities for you in any market.
Much of making the most of these opportunities comes down to mindset, and the actions you take as a result of your mindset.
In this blog post, we'll explore the two types of mindsets people hold, and how shifting from one to the other can help small business owners to not just survive, but thrive, in tough economic times.
This article will explore: (click on the link below to jump to that part in the article)
What is your “mindset” and why is yours so important to your small business?
Definition:
Mindset
Noun
the established set of attitudes held by someone.
Mindset refers to the set of beliefs and attitudes that shape how we perceive and respond to the world around us. Everyone has beliefs and stories that they have established from their experience of the world. The question really is - how important are these beliefs to our success or failure?
In 2015 a group of researchers from the McKinsey & Company studied “do mindsets matter?”. To answer this question, they studied data from over half a million students from 72 different countries.
Their first finding: having the right mindsets matters much more than socioeconomic background.
Incredibly, McKinsey & Company found that after controlling for all other factors, mindsets are twice as predictive of students’ scores than even their home environment and demographic.
In the context of small business, mindset plays just as critical a role in determining the success or failure of the organisation, because, as a small business owner, your mindset shapes how you approach every aspect of your business, from marketing and sales to financial management and team building.
8 common mindsets and how they contribute to your business growth (or lack of):
In my mind, there are really only two main types of mindsets:
Helpful mindsets,
or beliefs, which make it easier for us to achieve things
and
Unhelpful mindsets,
or beliefs, which can get in the way and make it more difficult for us to achieve things.
But, depending on your source, you may hear these referred to as one or more of the following common types of mindsets:
1. Fixed mindset:
This is a belief that our abilities, talents, and intelligence are fixed and cannot be changed or developed over time. People with a fixed mindset tend to avoid challenges and see failures as proof of their limitations.
Verses
2. Growth mindset:
This is a belief that our abilities and intelligence can be developed through effort, practice, and learning from mistakes. People with a growth mindset tend to embrace challenges and see failures as opportunities to learn and improve.
If we compare how these two mindsets show up in business; a fixed mindset might show up in your business as:
“I’m not good with numbers (or tech)”,
whereas a growth mindset might reframe that to:
“I am ready to learn to better understand my numbers”
Or even:
“I’m still learning to be great with my numbers.”
3. Closed mindset:
This is a belief that there is only one right way of doing things and that other perspectives, ideas, and solutions are not valid or useful. People with a closed mindset tend to be rigid, inflexible, and resistant to change or new ideas.
Verses
4. Open mindset:
This is a belief that there are always different perspectives, ideas, and solutions available to us. People with an open mindset tend to be curious, flexible, and willing to learn from others.
A closed mindset might show up as:
“I’ve tried that before and it didn’t work, so it’s not worth trying again.”
Whereas an open mindset might ask:
“that’s similar to something I’ve tried in the past - what are the differences between last time, which would create success this time around?”
5. Scarcity mindset:
This is a belief that resources, opportunities, and possibilities are limited and scarce. People with a scarcity mindset tend to focus on what they lack and what is impossible, rather than what they have or what is possible.
Verses
6. Abundance mindset:
This is a belief that there are always enough resources, opportunities, and possibilities available to us. People with an abundance mindset tend to focus on what they have and what is possible, rather than what they lack or what is impossible.
During a period of low sales, or recession, any scarcity mindsets or beliefs might really become amplified.
These might show up in our business as:
“it’s a recession market, so it’s not possible for me to have good sales.”
Whereas an abundance mindset might ask:
“where are the opportunities for me in this market, to increase my sales?”
7. Internal mindset:
Refers to an individual's beliefs and attitudes towards themselves, their abilities, and their potential for growth and success. Someone with an internal mindset tends to focus on their personal characteristics, such as intelligence or talent, rather than external factors when explaining their successes or failures.
Verses
8. External mindset:
Refers to an individual's beliefs and attitudes that attribute their successes and failures to external factors, such as luck or other people's actions. Someone with an external mindset may feel that their abilities are fixed and cannot be developed through effort or dedication. They may be quick to blame others or external circumstances for their setbacks, rather than taking responsibility for their actions. An overly external mindset can lead to a lack of motivation and a sense of powerlessness.
When we consider these in relation to each other:
Small business owners with an internal mindset may struggle with taking risks or making decisions, as they fear failure or being judged by others.
An external mindset may result in a lack of initiative or a reluctance to take risks, as the business owner may feel that external factors are beyond their control.
Therefore, it is essential to cultivate a healthy balance between an internal and external mindset to take ownership of one's actions while acknowledging the role of external factors in the business's success.
How to identify and reframe unhelpful mindsets, so that they can be more helpful to your business growth:
Like this infographic?
Download it as an A4 Printable, in my free Mindset Guide:
8 Actions You Can Take To Improve Your Mindset And Results:
Identify Limiting Beliefs:
The first step in changing your mindset around achieving your goals, is to audit your beliefs and identify which ones are helpful, enabling you to reach your goal more easily, and which ones are unhelpful, likely to get in the way of your success.
Start to Challenge These Limiting Beliefs:
Many of us have negative or limiting beliefs that can be traced back to childhood. What has happened in your past - can you identify where these beliefs or stories have come from?
The great news about our brains is that they are very flexible when it comes to beliefs. Whether something is true to the world, or not, if we believe it, it will be true to us and form our behaviours, habits and actions accordingly. Just like this can work against us, we can also use this power for good…
In order to challenge/reframe/retrain unhelpful beliefs, we can find evidence to support helpful beliefs and retrain our thinking.
For example, one unhelpful belief about a recession might be:
“Nobody is buying in this market, so my business is doomed.”
But, what IF we looked for evidence for the contrary and found that actually, there are plenty of businesses doing very well.
All of a sudden, our beliefs can shift, because we have evidence to support the helpful belief.
Switch From Using Statements To Asking Questions:
When someone states something, our brains are very black and white, they either agree with it, or they don’t. This can be helpful, or unhelpful - but the main thing is, if we use statements, our thinking is largely inflexible.
But, something interesting happens when we ask a question - our brain taps into its creativity and we go into problem-solving mode. So, when we are in a bind, or struggling with our mindset, statements can become extremely powerful at helping us shift into helpful thinking.
Let’s take the example above of the statement “Nobody is buying in this market.” True to the world or not, when stated like this, it is factual to us.
But what happens when we insert some curiosity and step into an open mindset?
We can do this by asking questions such as:
- “Where could I find more customers?”
- “What could I change so that this isn’t true for my business?”
- “What can I do to protect my business, and make it resilient through these times?”
All of a sudden, a shift is created, and most people can start to move from feeling reactive and helpless, to proactive and more solution focused.
Educate yourself and create a plan:
One of the best ways to improve your money mindset is to improve your financial literacy and create a plan. A financial plan can help you feel more in control of your finances and give you a sense of purpose and direction. It can also help you identify your financial goals and create a roadmap for achieving them.
It can feel difficult and overwhelming to educate yourself, particularly if you have any unhelpful beliefs about “not being good with numbers.”
This is where you can implement the tip above and ask yourself “what can I do to improve my confidence around numbers?”
One simple solution is to take our course: The Profit Formula:
I created The Profit Formula Course because traditionally there wasn’t an affordable way to learn:
- all the money lingo a small business owner needs to know,
- how to create a budget,
- how to manage your cashflow effectively,
- how to make sure your pricing is profitable,
- how to make sure you have a plan of how much you need to solve to achieve your goals, all in one place.
But, now there is, in one simple and easy to implement format!
Create a budget and spend mindfully:
One of the steps to educating yourself on your money is creating a budget to learn how much your business actually costs to run, then making sure you are spending mindfully.
Mindful spending means being present and intentional when you spend money. It's about making conscious choices about where your money goes and how you spend it. This can help you feel more in control of your finances and reduce feelings of guilt or regret about spending.
If you haven’t yet created a budget, you might like to buy my affordable budget templates:
This Budget Project will help you quickly and easily create a budget for your personal and business spending, so that you have clarity around what your income requirements are.
Surround Yourself with Positive Influences:
Motivational speaker, John Rohn, is famously quoted as saying:
“you are the five people you spend the most time with”
and it’s so true!
Do you ever find yourself spending time with people who share similar thoughts and beliefs to you, then find that when you shift to a different group of people with an entirely different set of beliefs, all of a sudden you start to lean more towards those beliefs?
This happened to me recently - I was spending a lot of time with businesses who were having a really hard time with their sales, and I started to feel all depressed and hopeless about the financial times.
Then, I shifted to spending time in two groups with entirely different experiences and beliefs around the times, and all of a sudden I started seeing all these different opportunities for making more money.
I believe that this doesn’t just apply to people though. Lots of different factors can influence our thinking; from what we watch, read, listen to, eat, and how we treat our bodies etc.
So, be mindful about your influences. Being around positive people and avoiding those who constantly complain about money or who have a scarcity mindset can leave you with a much more positive outlook towards money and success.
Practice Gratitude:
Another popular motivational speaker, Tony Robins, is well known for his quote:
“energy flows where attention goes.”
The basic idea behind this quote is that our thoughts and focus have a significant impact on our actions, emotions, and results.
If we constantly focus on negative thoughts or problems, we tend to feel more stressed and overwhelmed, it helps us create evidence for these negative thoughts and problems, and they therefore become amplified. On a practical level, these negative beliefs can also and prevent us from taking proactive actions towards achieving our goals, thereby creating a self-fulfilling prophecy.
Cultivating a sense of gratitude, by focusing on the good things you have in your life right now, can help you appreciate what you have, feel more abundant and positive about your financial situation, and take productive actions - bringing you closer to your goals almost by default.
Take Action:
Just like all things in life - all this helpful information is only as useful as the actions you take as a result. So, the most important thing you can do to improve your money mindset is to take action.
Set small, achievable goals for yourself and take steps towards achieving them. Celebrate your successes along the way and learn from your mistakes. By taking action, you can build confidence, improve your overall mindset towards money and improve the likelihood that your business will survive any tough times it encounters.
In Summary:
Shifting your mindset can have a dramatic impact on your ability to “weather the storm” if your business (or the economy) falls upon tougher times, because your mindset and attitudes form your beliefs, and your beliefs dictate your actions.
Even though there are lots of different terms that are used to describe mindset, such as the 8 we explored today, they really boil down to two main types:
- Helpful mindsets, that will assist us in achieving our goals faster.
- Unhelpful mindsets, that will get in the way of our success.
The great news is that our brain is very flexible, and there are lots of different actions we can take to create more helpful beliefs.
Sometimes though, despite our best efforts to improve things ourselves, we can require help to shift out of unhelpful mindsets.
If you would like help with your mindset, or business growth, then get in touch and to discuss how I can help.
Like this article?
Download it as a printable PDF workbook - including A4 poster, and extra mindset checklist.
Subscribe by entering your details below and we'll email you a copy of the 11 page Mindset Guide:
About the author:
Kat Soper is the Founder and Head Trainer of The Helpful Academy Online Business School.
Kat is passionate about helping start-ups and small businesses succeed and achieve their business goals so that they can achieve the lifestyle they desire (and deserve).