"The Pareto principle" (also known as the "80-20 Rule) simply means that the relationship between input and output is rarely balanced. When applied to activities, it means that approximately 20% of your efforts produce 80% of the results.
Learning to recognize and then focus on that 20% is the key to successful and also effective time management.
The Pareto principle was named after the Italian Vilfredo Pareto, who observed that 80% of the land in Italy was owned by 20% of the Italian public. The belief is that most of the results in any situation are determined by a small number of causes.
While the 80/20 rule is not an exact science, the rule is often applied to data such as sales figures i.e "20% of customers are responsible for 80% of sales volume".
Here are other examples in business were the 80/20 Rule may be applied to.
Stock - 80% of your stock comes from 20% of your suppliers.
Sales Figures - 80% of your sales comes from 20% of your sales Team.
Employees - 80% of the daily tasks will be done by 20% of the employees.
Customers - 80% of sales will come from 20% of your customers
Advertising Revenue - 80% of revenue from advertising will come from 20% of the advertising.
Product sales- 80% of product sales come from 20% of the products.
The 80/20 Rule can also act as a daily reminder for you to focus more of your time and energy on the 20% of activities that will be the most productive for your business.
Some people have suggested that you should forget about the 80% of the sales team who do not bring in the figures. I disagree, I believe that you should spend more time developing a more balanced sales team. The top selling 20% in one period might not always achieve the best sales figures. It might be an idea to run an incentive in your business, to see what sales people can get into the top 20%. This will push all team members to achieve their targets.
It is not enough to just "work smarter" anymore, you also need to work smarter on the right things. How much of your week is spent on non productive tasks that could be delegated to others?
I also recommend that you start using a daily planner in work. Don't let good ideas and plans escape you. Use the daily planner to keep track of Sales, meeting results, phone conversations and your "to do lists". This way you can stay on track of the most productive activities in your business.
