Are you taking full advantage of Pareto’s Law? Vilfredo Pareto was an Italian economist who lived from 1848-1923. Of course, he was initially known for his observation that 80% of the property in Italy was owned by 20% of the population. This was later summarized into the Pareto Principle, which states that 80% of our results typically come from 20% of our efforts. This is also known as a Pareto Distribution.
Take some time and list all of the tasks that need to be completed in your business. You are probably already thinking, “John, all of these tasks need to be done!” Maybe so, but do they all need to be done by you? Not necessarily… Please allow me to explain. Even in the early years of my business, when I couldn’t necessarily afford to hire a lot of staff members, I had my children (Ages 10-13 at the time) complete filing, do inputs for Inventory spreadsheets & Client Activity Summaries.
This actually accomplished several things. They learned how to work, they took part of the load off me and they also funded their future college tuition through their efforts.
After you’ve made your list of tasks, I’d like you to categorize them into four categories:
L – Lead on these tasks. They are the ones that you do best in your business, simply because you have what my Business Coach Dan Sullivan calls a Unique Ability. You are really great at this, others recognize this positive skillset you have, and you enjoy it so much that the day just seems to “fly by.” They are the tasks that will likely also make you the most profits.
E – Eliminate these tasks. Do you really need them? If you are spending 80% of your time on these, and only getting 20% of your results, you are limiting your profitability.
A – Automate tasks whenever possible. I use tools like Auto-Responders on my website to expedite replies to some of my website requests. I also use some e-mail responses that cover Frequently Asked Questions or FAQ’s. What tasks can you automate in your operation? In this world of rising labor costs, you simply cannot afford to overlook this question!
D – Delegate tasks whenever possible. There are some tasks that just make sense to delegate to others on your Team or to a third-party provider. The question to ask is, “Can someone else do this task, perhaps even better than I can complete it?” In my own operation, I use a third-party provider to do my billing, payroll & several other tasks, which frees up more time to spend with Clients. In most cases, delegation will free you up to focus on more profitable tasks. I know this certainly has been true for me.
The ultimate question for you is “Where, in terms of your efforts, can you place 20% of your efforts and achieve 80% of your results right now?” Talk to your Team about this idea and where it can be applied. There may be some tasks that are 70/30 or 60/40, but they are still worth looking at.
If you will continually do this, I guarantee that you will continue to expand your future opportunities and profitability results!
I urge you to please join me in making the changes we need to in order to succeed and prosper! As we move forward with my Next Level Thinking™ blogs, I’ll start my focus on the benefits of “Upstream” thinking from Author Dan Heath. If I can assist you in any way prior to that, please reach out at email@example.com or at 209-988-8960.