David Packard, one of the founders of Hewlett Packard, famously said, “More companies die of indigestion than starvation.” Essentially, what this means is that it is more dangerous for a small business to take on too many projects and overextend itself than to focus on a limited number of projects and attempt to deliver on them as promised.
In my experience with working with entrepreneurs, I have found that indigestion in this sense is one of the biggest killers of small businesses. A small business will develop (potentially fatal) indigestion if the entrepreneur takes on too much business before developing the capacity, infrastructure, resources, and confidence to execute.
This is a symptom of an entrepreneur having a “scarcity mentality”. The thinking goes like this: “My business is small and needs to grow; therefore I need to get as many clients as possible, as quickly as possible. Opportunities out there are scarce, so I must grab all of them that come my way.”
Then the inevitable happens. The business’s resources are stretched too thin to deliver effectively to any of the clients. The entrepreneur and his/her staff simply cannot keep up with the quantity and quality of work required. Irreparable damage is done to the company’s (and the entrepreneur’s) reputation and any further opportunities dry up.
The problem with this type of thinking is that it rests on the false premise that opportunities are scarce. I have found that opportunities for entrepreneurs are like buses: if you miss one, another one will be along in a few minutes. In other words, realising that there is an abundance of opportunities out there allows entrepreneurs to develop an “abundance mentality”.
The distinction between a scarcity mentality and an abundance mentality was developed by Steven R. Covey in The 7 Habits of Highly Effective People. Covey defines an abundance mentality as “flow[ing] out of a deep inner sense of personal worth and security. It is the paradigm that there is plenty out there and enough to spare for everybody. It results in sharing of prestige, of recognition, of profits, of decision making. It opens possibilities, options, alternatives, and creativity.” Developing such an abundance mentality assists entrepreneurs in a huge variety of ways, personally and in business.
An abundance mentality allows a small business owner to focus on executing on one project well before moving on to the next with increased experience and confidence – because the business owner knows that there will always be another opportunity to take hold of. This will enable the business to grow in a controlled and sustainable way, without straining resources to breaking point.
As an entrepreneur, you should understand that focusing on one opportunity at a time doesn’t mean you miss other opportunities, but rather that you will be better able to deal with all the upcoming opportunities just around the corner.