Running a field service business means you’re constantly making decisions—where to spend your time, which tools are worth the money, when to hire, and when to walk away from something that’s just not working.
But if you’ve ever found yourself thinking, “We’ve already put too much into this to stop now,” you could be stuck in a mindset that slowly drains your time and budget. It’s called the sunk cost fallacy.
Contents
- What Is the Sunk Cost Fallacy?
- Where the Sunk Cost Fallacy Sneaks In
1. Holding On to Outdated Software
2. Staying in Unprofitable Contracts
3. Hanging on to Equipment That’s Hurting Productivity - Why We Fall Into the Sunk Cost Trap
- How to Avoid the Sunk Cost Trap in Your Business
1. Ask Forward-Focused Questions
2. Look at Results, Not Attachment
3. Let Go of What No Longer Fits
4. Create a Culture That’s Open to Change - Real-Life Examples of the Sunk Cost Trap
- It’s OK to Walk Away—When It’s the Right Call
What Is the Sunk Cost Fallacy?
The sunk cost fallacy is a common mental trap. It’s when you continue with a decision just because you’ve already put time, money, or effort into it—even when it’s clear that sticking with it isn’t helping anymore.
You know it’s probably not the right move, but you keep going because of how much you’ve already spent.
What It Looks Like in the Real World
-
You keep using a job management system that no longer suits your team, just because you paid for a full year upfront.
-
You stick with a service area that isn’t generating profit, simply because you already invested in vehicles and marketing for that region.
-
You hold on to old tools that slow your team down, telling yourself they “still work” and cost too much to replace.
But the hard truth is this: that money and time are already spent. You won’t get them back. What matters now is making the best decision for the future of your business.
Where the Sunk Cost Fallacy Sneaks In
Field service businesses—especially smaller or growing ones—are particularly at risk of falling into this trap. When you’re working with limited time, tight budgets, and pressure to keep things running, it’s easy to keep pushing forward with choices that no longer make sense.
Here are a few common places where sunk costs quietly take hold:
1. Holding On to Outdated Software
You’ve already spent time and money training your team on a legacy system, so switching feels like starting over. Even though the system is clunky and slowing you down, you stick with it.
A better way to think about it:
Ask yourself, If I had to choose software today, would I pick this one again? If the answer is no, it might be time to look elsewhere.
2. Staying in Unprofitable Contracts
You’ve worked with a long-time client for years, but the jobs barely break even—or worse, cost you money. Still, you hold on, hoping things will turn around, because you’ve already invested so much in the relationship.
A better way to think about it:
Look at the value of continuing, not the cost of the past. Focus on what you stand to gain from this point forward.
3. Hanging on to Equipment That’s Hurting Productivity
You’ve got a van that’s been nothing but trouble, breaking down every other month. You just bought it last year, so you’re reluctant to move on. Meanwhile, your team’s delayed, jobs are rescheduled, and customer satisfaction takes a hit.
A better way to think about it:
That money is already spent. What matters now is how much it’s costing you to keep it. Operational delays and unhappy customers are expensive too.
This kind of thinking sneaks in slowly. But once you spot it, you can start making clearer, more future-focused decisions.
Why We Fall Into the Sunk Cost Trap
The sunk cost fallacy isn’t just a business mistake—it’s human nature. Nobody likes admitting that something they poured time, money, or energy into just isn’t working. So instead of cutting losses, we keep going, hoping it’ll eventually pay off.
Here are a few common reasons this mindset takes hold:
Loss Aversion
We tend to feel the pain of loss more deeply than the joy of gain. Walking away from a bad investment feels like giving up, even when quitting is clearly the better move.
Fear of Wasted Effort
Nobody wants to believe their past work or decisions were a waste. So instead of making a clean break, we try to salvage the situation—just to make the original investment seem worthwhile.
Overconfidence
It’s easy to think we’re just one step away from turning things around. We tell ourselves, “One more month and this will start to pay off.” But often, that moment never comes.
Pride and Personal Attachment
For business owners and managers, decisions can feel personal. When you’ve been the one to call the shots, admitting something isn’t working can feel like admitting fault. That makes it much harder to change direction, even when deep down, you know it’s time.
Recognising these patterns doesn’t make you weak—it makes you more aware. And awareness is the first step toward making smarter, more strategic choices.
How to Avoid the Sunk Cost Trap in Your Business
The best way to avoid the sunk cost fallacy is to stop focusing on what’s already been spent and start thinking about what will actually bring value going forward.
Here’s how to shift your thinking:
1. Ask Forward-Focused Questions
When you’re unsure about whether to continue with something, try asking:
-
If I hadn’t already invested in this, would I choose it today?
-
What return do I expect from this going forward?
-
Am I sticking with this because it still works—or because of what I’ve already spent?
Questions like these help you focus on the next step, not what’s already behind you. That’s the kind of thinking that leads to better long-term decisions.
2. Look at Results, Not Attachment
Whenever possible, use data to guide your decisions. If a piece of software is causing missed jobs, delays, or complaints, it’s probably time to make a change—no matter how long you’ve used it or how much you’ve already paid.
3. Let Go of What No Longer Fits
What worked when your team was small might now be holding you back. A manual system that was fine for three engineers might be a mess with fifteen. The real cost isn’t the tool itself—it’s the inefficiency and frustration it causes.
4. Create a Culture That’s Open to Change
Change doesn’t mean failure. It means you’re paying attention and adjusting. Train your team—and remind yourself—that smart businesses pivot when something’s not working. The ability to adapt is what keeps companies alive and growing.
Real-Life Examples of the Sunk Cost Trap
Here’s how the sunk cost fallacy can show up in everyday decisions—and what a more forward-thinking response might look like.
| Situation | Sunk Cost Thinking | Smarter Alternative |
|---|---|---|
| You’ve already spent £5k customising a software system that still isn’t working for your team. | “We’ve put too much into this to stop now.” | “This platform just doesn’t fit how we work. It’s time to move on and find something better.” |
| You bought equipment last year that’s now unreliable and causing delays. | “It’s still new—we can’t afford to replace it yet.” | “It’s slowing us down and hurting service. Let’s cut our losses and invest in something reliable.” |
| You spent time training the team on a system no one likes or uses. | “They’ll come around eventually.” | “If no one’s using it, maybe it’s not the right tool. Let’s test out another option.” |
Ask yourself:
-
Am I continuing just because of what we’ve already spent?
-
Is this still providing real value today?
-
Would I make the same choice if I were starting from scratch?
-
Are there better options out there I’ve been avoiding?
If you answered yes to that first question and no to the rest, it might be time to take a step back and rethink the decision.
It’s OK to Walk Away—When It’s the Right Call
Strong businesses don’t hang on to bad decisions. They adjust. They learn. And they move forward.
Recognising when something’s no longer working isn’t failure—it’s a sign of maturity. In field service, where time, money, and margins are always tight, being able to pivot can make all the difference.
Let go of tools, systems, or processes that are holding you back. Focus on what’s actually helping your business grow.
That’s not quitting. That’s progress.
