Nobody feels the crush of time pressure like a small business owner.
When you’re just starting out, you are most likely the ONLY person in the business.
You bang out the emails and take the phone calls; you source and possibly produce the product. You run the errands. You pay the bills.
Then you hire a couple of people to help, and suddenly… somehow you’re not only reporting to your customers, you’re reporting to a bunch of employees. You’re answering their questions and fixing their mistakes and filling in when they no-show.
Maybe we could lobby Parliament and Congress to add an hour to every day — just for entrepreneurs. Then we’ll have a chance to be more exhausted than we already are.
Well today I’d like to turn that upside down — with the Pareto Principle. Better known as the 80/20 rule.
Vilfredo Pareto discovered that across multiple countries and continents, 20% of the people had 80% of the money and the remaining 20% of the money was distributed among 80% of the people.
Not only that, 20% of the 20% had 80% of the 80%. And 20% of the 20% of the 20% had 80% of the 80% of the 80%.
In other words…
80/20 squared means 4% of the people control 64% of the wealth.
80/20 cubed means 0.8% of the people control 52% of the wealth.
You can raise 80/20 to the power of four, five, or six, as far as you wanna go — and it’s always true. All the way up to Warren Buffett and Bill Gates.
Anybody who has any inclination towards numbers oughtta find this mighty interesting.
But it gets even more intriguing than that.
The 80/20 principle – the principle of huge disproportions, huge outputs for tiny inputs – doesn’t stop at incomes and net worth.
It applies to nearly everything you can measure in any business, and almost everywhere else. It applies to:
- Productivity of sales people
- Frequency of customer visits
- Size of customer purchases
- Sources of complaints
- Sources of theft
- Software development
…and vendors, product lines, defects. Everything.
And:
It applies to the productivity of every minute in your day.
4% of your minutes produce 64% of your income and sales.
That means in an 8 hour day, two thirds of your money was earned in just 20 minutes.
Which 20 minutes?
I don’t know. But I can guarantee it was the case. It was the time you spent selling the customer who actually ordered; it was the “cherry on the sundae” that triggered somebody to buy; it was a high leverage span of time. In fact it might have only taken two minutes.
All the rest of your time merely served to make that 20 minutes or 2 minutes possible.
Once you’re consciously aware of this, it’s a source of huge leverage. It means that you can move around hours of low-value activity to make room for minutes of high-value activity and get a lot more done.
80/20 says that out of 24 hours, 80% of your productivity comes from 5 of those hours and 50% comes in 15 minutes.
80/20 says that most of your day is spent doing relatively trivial, non-necessary stuff.
80/20 means that there’s not too few hours in the day. It means there’s more than enough time. If you harness 80/20 instead of trying to fight it.
I have coached hundreds of millionaire entrepreneurs, I’ve helped Google advertisers save billions of dollars in stupidity tax. I’m known all over the world for my marketing expertise, and I’ll assure you:
There is not a single thing in business that is more important than burning 80/20 thinking into your mind, your muscle memory, your bones. It’s a non-stop source of 10:1, 100:1, even 1000:1 leverage.
Through this connection with atWork Office Furniture, I have agreed to make my 80/20 productivity program (Force Multiplier) available. In your business that will double, triple, even 10X some aspect of your work.
To register for this program, go to
www.perrymarshall.com/forcemultiplier
Consider this radical thought:
When you apply 80/20, there’s more than enough hours in every day. You have the time to do what’s really important in life. You just need to ruthlessly eliminate the trivia.
Perry Marshall is an author, speaker and consultant with expertise in digital communication networks, control systems, acoustics and e-commerce.
