The ‘Pareto principle’ is a principle that states that 80% of the results you get will stem from 20% of the actions you do. It’s a broad-strokes idea that can be applied to many areas of business.
- 20% of your work will yield 80% of your results.
- 20% of your customers will buy 80% of your goods.
- 20% of your staff will do 80% of the work at your company.
There are many other examples, and they only serve as a rough guide. It’s not exact, but it illustrates a vital concept that an entrepreneur should understand. The idea that the difference between success and struggle can be a simple matter of priorities.
Are you taking the time to ask yourself what 20% of your actions are responsible for 80% of your success, and prioritizing those actions? Are you putting extra effort into supporting and forming relationships with the 20% of your customer base that buys that 80% of goods?
This doesn’t just relate to effort and reward either. Importantly, this can also describe how a small percentage of the people around you can cause a large amount of negativity. 20% of the people around you could be causing 80% of your problems. Have you taken the time to look for those obstacles and either deal with them or let them go?
Take the time this week to sit down and recognize where your 20% segments are located. Ask yourself, “What tasks do I do every day that really push me towards my goal?” and then, “What tasks am I doing that don’t really have any discernible benefit?”
Instead of spending lots of time on your daily tasks, identify the 20% that is useful, and trash the rest. Instead of reading for an hour, read for 10 minutes but read what is useful. Don’t focus on the number of tasks completed. Identify the useful tasks, and prioritize them.
At Justin Cobb Leadership Academy we find the Pareto principle an inspiring tool to use in making entrepreneurs’ lives better.