Shop Talk: The Sunk Cost Fallacy — And How to Let It Not Scare You

goal setting

goal setting

Welcome to Shop Talk! While we love providing you with jam-packed, actionable posts, we also wanted to share quick, thought-provoking snippets here and there — from our brains to yours.

Last week, we talked about the magical solution of completing a task by dropping it. (Missed it? Catch up here.)

Is it safe to say that some friction presented itself when you considered what you might be able to drop from your undoubtedly robust to-do list? We bet that friction has a little something to do with one of our favorite economic principles: sunk cost.

For the non-nerds, a definition: “In economics and business decision-making, sunk cost refers to the cost that has already been incurred and cannot be recovered.

Monetary costs. Energetic costs. Time costs. They’re all costs that are very real to our businesses as One Woman Shops.

We alluded to sunk cost in our diatribe on dropping tasks last week when we said:

“You might be a lot further in. You might’ve spent hours on plans and outreach. Hundreds (or thousands) of dollars on bringing it to life. Endless amounts of energy truly trying to make it work…No amount of time, money, or energy invested is worth carrying on with something that isn’t going to get you closer to where you want to be or how you want to live…”

Let’s take this one step further, to the sunk cost fallacy.

From YouAreNotSoSmart.com (haha!), the sunk cost fallacy states that: “Your decisions are tainted by the emotional investments you accumulate, and the more you invest in something, the harder it becomes to abandon it.”

Today, we encourage you to look over your to-do list (yes, again) and see if the sunk cost fallacy is at play with any of your current projects. Say to yourself, “The money, time, and energy I’ve invested in this project can’t be recovered, but I’m not doing myself a service by continuing forward.” Then (you guessed it!), drop that project.

Because here’s the thing…we also know this to be true in our businesses: The best ideas resurface.

It’s not easy to remember this when you’re considering letting something go, or dropping something you’ve started, or heck, when you’re in the middle of that meditation session and an idea strikes but you know you shouldn’t grab your phone and open Evernote to jot it down.

So we’ll repeat it: The best ideas resurface.

Need evidence? Pull up an old planner, old notebooks, or old Google Docs. We bet you’ll be surprised to see how many ideas you’ve actually acted on and implemented since you first wrote them down ages ago.

Maybe when the idea first presented itself, you didn’t have all the information you needed. Maybe you didn’t have the network of collaborators and purchasers in place yet. Maybe you didn’t have the time or energy to invest in it.

And now, maybe despite the costs you’ve already sunk into the project you’re considering dropping, it just isn’t the right time.

At the risk of sounding incredibly woo-woo, trust the process. Take steps forward if you can and want to, but rest assured that your best ideas will make their way into the world in some way, shape, or form eventually.

And if you live in constant fear of those amazing ideas disappearing forever? We remind you of an idea from last week: the simple but (for us) revolutionary idea of having a “Hold” section on your to-do list.

Tell us: What can you drop today?

Your days, back in your hands.

Get instant access to 5 Days to Reclaiming Your Time, a free email course with the mindset shifts + action steps you need to get started in reframing your relationship with time. Sign up below!

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