The 80/20 Rule

The Pareto principle (also known as the 80-20 rule), states that, for many things, 80% of the consequences come from 20% of the causes. For instance, you wear 20% of the clothes in your closet 80% of the time. This equation also affects your business, as in 80% of your business will come from 20% of your clients.

Unfortunately, most people will spend 80% of their time dealing with the 80% of clients who are not bringing in business. You can use this theory to argue that only 20% of the tasks you work on will bring in the majority of your business. The following are some tips to help you streamline your schedule and spend time where it really counts.

First, identify areas of waste within your operations.  Look at the physical layout of your office, your store, your storeroom, your desk.  Is it cluttered?  Are the most used items within reach?  Do you have the supplies you need to do your job?  Look at the processes for getting things done.  Do you use multiple systems to do  similar jobs?  Could you get down to one system?  Do you have streamlined processes built on the customer’s needs?

Email and daily tasks can be big time wasters. Set aside a half hour in the morning and a half hour in the evening to respond to your email and complete daily operational tasks; it can save you time during the day. Another option is to hire a virtual assistant to answer general business email. There may be some things you need to respond to yourself, but the vast majority can probably be handled by someone else.

You may want to experiment a little by tracking the time you spend on various tasks to determine which ones are actually making you money. It only stands to reason that devoting more time to those activities will greatly increase your profits.