The Logic Trap: How Circular Reasoning Can Derail Your Business

| April 1, 2024 | By
The Logic Trap: How Circular Reasoning Can Derail Your Business

In the world of entrepreneurship, especially among the do-it-yourself, blue-collar business community, the path to success is often paved with a series of trial and error, hard work, and a never-say-die attitude. Yet, there's an insidious logic trap that many fall into without even realizing it—circular reasoning. This logical fallacy can lead business owners down incorrect and illogical paths, significantly impacting their profits and growth. Let's explore what circular reasoning is, how it manifests in business, and how you can cultivate a logical mindset to safeguard your business's future.


What is Circular Reasoning?


Circular reasoning, also known as circular logic, is a logical fallacy where the conclusion of an argument is assumed in one of the premises. In essence, it's saying, "This is true because it's true," without providing any real evidence or logical basis for the claim. This type of reasoning leads nowhere, much like running in circles, and fails to provide a foundation for sound decision-making.


Example of Circular Reasoning in Business


Imagine a business owner who insists on using a specific supplier because they've always used that supplier. When asked why they don't consider others for better rates or quality, they respond, "Because this supplier is the best option." This reasoning is circular because it relies on the assumption that the supplier is the best without comparing or evaluating alternatives. The conclusion (using this supplier) is justified by the premise (the supplier is the best option), which is unfounded and lacks critical evaluation.


The Impact on Business Profits


Such reasoning can lead to missed opportunities for cost savings, improved quality, or more innovative solutions. It's an easy trap to fall into, especially for business owners who are juggling multiple responsibilities and may rely on habitual decisions to save time. However, this can stifle growth and innovation, leading to stagnant or even declining profits.


How to Think Logically


Breaking free from circular reasoning involves cultivating a mindset of critical thinking and logical analysis. Here are some steps to help you think more logically in your business decisions:


  1. Question Assumptions: Always challenge the premises of your decisions. Ask yourself, "Why do I believe this to be true? What evidence do I have?"
  2. Seek Evidence: Before making a decision, gather data and evidence to support it. Look for concrete facts rather than relying on beliefs or assumptions.
  3. Consider Alternatives: Always explore different options and perspectives. Comparing alternatives can help you make more informed and logical decisions.
  4. Use Cause and Effect Reasoning: Try to understand the cause and effect relationships in your business decisions. This can help you anticipate outcomes and make choices that lead to desired results.
  5. Adopt a Growth Mindset: Be open to learning and changing your mind based on new information. This flexibility can prevent you from falling into the trap of circular reasoning.




Circular reasoning is a common pitfall in business decision-making, but it's one that can be avoided with conscious effort and logical thinking. By questioning assumptions, seeking evidence, considering alternatives, understanding cause and effect, and maintaining a growth mindset, you can make decisions that are logical, informed, and conducive to your business's growth and profitability. Remember, in the dynamic world of entrepreneurship, the ability to think critically and logically is not just a skill—it's a necessity for success.