I’m obsessed with the 80/20 rule
So if 20% of my time generates 80% of my income how come it is so hard to double my income while working half as many hours?
First, if it was obvious what few things I should really focus on I guess it would be quite easy after all. But how do I separate all the time wasters from the real money makers (reading this blog is NOT a time waster)? Thus my obsession with the 80/20 rule. I believe if I study what I do, what really worked and focus on repeating that, I can improve my results and make it easier at the same time. Here is an example from a client who wishes to remain nameless so some details are purposely fuzzy.
A small flooring and window covering retailer was struggling to attract customers and generate enough profits to invest in growing their business. We did a simple 80/20 analysis and found that all the large, profitable jobs done in the last year were for measuring, designing, and installing custom window coverings. While 80/20 is a guideline, in this case it worked out almost exactly. Just 20% of their customers accounted for 80% of revenues and probably well over 100% of profits (yes they lost money on all the other jobs in aggregate).
So what did we do; We focused on window coverings! Within a year the business had doubled and profits went up 10 times. They kept the flooring business going with a focus more on selling flooring and carpeting to existing customers. For new business, the marketing was all on window coverings where they had a significant market advantage from their team of experienced designers and installers.
The truth is that by focusing on just a specific niche (residential custom window coverings in their one location) they increased sales, profits, and hired two new staff to handle the work. I know it’s incredibly hard for business owners to think that less is more … but I find that to be true at least 80% of the time (pun intended).
Learn how to use the 80/20 rule to your advantage www.akela-partners.com/accelerate