You’re one of the hardest-working entrepreneurs around. You spend all your spare time investing in your growth. Not a day goes by without you taking action toward your ultimate success.
But you don’t seem to be getting anywhere. Years continue to pass, but you don’t feel like you’ve got anything to show for it. All the while, your peers are making steady strides toward their goals.
It could be that you’re a victim of sunk cost fallacy.
What is Sunk Cost Fallacy?
Sunk cost fallacy is the idea that it’s better to stay in than to get out, no matter how badly your current business endeavors are going.
No one likes to be a loser. And most of us have been taught to keep going. Persevere. Fight through hard times.
But there are times when your efforts will be in vain no matter how many pivots you execute, how you change your pricing strategy, or how you adapt to current market conditions.
So, just because you’ve invested your time and resources into a business for years or decades doesn’t mean you are guaranteed success or even moving in the right direction.
Let’s look at how you can avoid sunk cost fallacy.
Take Pre-Orders
Don’t make anything before selling it first. And if your first thought is that you can’t sell something that doesn’t exist yet, consider that a) you haven’t done enough audience research, and b) you need to brush up on your copywriting skills.
Whether it’s a home study course, teleseminar, or even a new back pain cure, you can test your offer with the market without investing heavily in its development (sell it!).
Focusing on your sales process will ensure you can generate business more consistently and predictably. It takes many entrepreneurs a long time to discover that the sales process is far more valuable than the product.
Develop your sales skills first and foremost. If you can’t sell your product, it doesn’t matter how good it is.
Iterate Quickly
Sticktoitiveness is important, but hanging onto initiatives for too long without seeing any results is sure to wear on you, your confidence, your team, and your business over time.
Whether it’s publishing content, going live on social media, or testing ad copy, you’ve got to be quick to pull the plug on initiatives that don’t work.
For better or for worse, most entrepreneurs end up trying a lot of things that don’t work before nailing the formula. You’ve got to know when to persevere, but knowing when to move on is more critical.
Remain agile and iterate quickly. You can test multiple initiatives simultaneously, but you’ve got to track them.
Final Thoughts
Don’t forget that even if you lose money in a venture, there’s always something you can take with you – the knowledge, skills, and experience you’ve gained along the way. You can apply all you’ve learned to new businesses, and your ability to engineer success should improve with each attempt.
Don’t get caught up in the sunk cost fallacy cycle. You could struggle for years or even decades without getting anywhere in your entrepreneurial pursuits.