Pareto’s Principle is one of the most famous principles in business. Some entrepreneurs live by it.
You’ve heard it before, but maybe you haven’t heard of it referred to as Pareto’s Principle. Here’s what Pareto’s Principle is:
80% of your results come from 20% of your work.
That sounds much familiar. The concept is true, and if you look deep enough, you will discover what that 20% is for your business.
The work that leads to most of your results.
Most people stop there. They acknowledge Pareto’s Principle and acclaim that 20% of their work brings forth 80% of the results.
The people who stop at the acknowledgement only see one side of the coin. To every coin, there are two sides.
To Pareto’s Principle, there are two statements.
The first statement is the one that we know well. 80% of our results come from 20% of our work. The second statement?
20% of our results come from 80% of our work.
That’s a lot of work that only leads to one-fifth of your results. That particular small slice of work that you do leads to everything else.
The other side of the coin doesn’t get much attention because it is the disgusting side of the coin. Most of the work you do leads to little or no results.
Can you still work with that in your mind? Most of the work leads to little or no results.
80/20 Done The Right Way
This blog post isn’t meant to discourage anyone. It is designed to change the way we work.
The successful entrepreneurs understand the principle and look at both sides of the coin. They focus most of their time on the 20% of the work that leads to 80% of the results.
As for the 80% of the work that leads to only 20% of the results? That gets outsourced or eliminated.
Why do something when you know it won’t produce much results? The biggest mistake I see people make is they will look at every possible opportunity without honing in on one opportunity to maximize results.
If someone doesn’t produce much results, and you don’t overwhelmingly enjoy that work, then stop.
If it’s something that you still have to do but know it doesn’t bring in the results you are looking for, then outsource that work.
Since 80% of your work produces 20% of your results, you should look to outsource 80% of your business.
Then you can focus all of your time on the 20% of your work that leads to 80% of your results.
Even if something seems vital for your business’ survival, try to outsource it. Scheduling tweets is essential for my business since that’s how I get most of my blog traffic.
Outsourcing that one task allows me to save hours of my time each week. Outsourcing my blog post pictures allows me to save even more time.
For every minute you spend doing something, you can’t spend that same minute doing anything else. That’s the basic concept behind an opportunity cost.
If you procrastinate for one minute, you cannot be productive and get stuff done during that same minute.
If you find yourself not focusing on the 20% of your work that leads to 80% of your results, then you are missing out on opportunities.
I will provide you with an example involving money just to highlight the importance of looking at Pareto’s Principle differently.
Let’s say an entrepreneur works for five hours a day and makes an average of $100 per day.
With Pareto’s Principle in play, one hour brings in $80 while the other four hours only result in an extra $20.
Let’s say the four hours that bring in $20 get outsourced and the same entrepreneur works for five hours each day.
Now those five hours get directed towards the work that brings forth the best results.
Instead of making $100 per day, that same entrepreneur is making $400 per day ($80 x 5 = 400)
Sure, outsourcing costs comes into play, but it won’t cost $300 per day at that rate.
Overall, a profit is made because the entrepreneur was able to focus more time on the work that brought forth the most results.
If you focus more of your time on what works, then don’t be shocked if you get better results.
You’ve figured out Pareto’s Principle and focus most of your time on the work that yields most of your results.
But let’s say you have multiple passions and want to start multiple businesses. Maybe you want to write books or create training courses. Maybe, like me, you want to become a singer.
You can suddenly find that extra time to pursue more adventures by outsourcing most of your work. Inevitably, you will temporarily disrupt your groove.
If you can focus all of your time on the work that leads to the most results, you will have to introduce more work that doesn’t (in the beginning) bring in much results.
Then you discover what works in the new adventure you are taking and outsource everything else that doesn’t yield as much results.
The quicker you master something and the better you master your time, the easier it will be for you to master anything else that you want to master.
Twitter was the first social network I mastered. I only mastered Twitter because I gave up on every other social network.
Now I am on several social networks and have thousands of followers on most of the platforms.
Master one thing and then expand from there.
There is a lot to learn from Pareto’s Principle. The two key lessons are that most of your work leads to little or no results while some of your work leads to most of your results.
You need to focus more of your time on that some of your work that leads to most of your results.
Success is not just a matter of hustling. It’s a matter of hustling in the right direction. You can have a work ethic, but if you get lost and go on the wrong trail, then it will take a lot longer for you to reach the finish line (while some people never reach it).
Hustling in the right direction means focusing most of your time on the work that brings forth most of your results. The busy work that stands in your way, although it may be important, needs to get outsourced.
What are your thoughts about Pareto’s Principle? Do you have any other advice for leveraging it for our businesses? How do you save time? Sound off in the comments section below.