Why Do So Many Business People Ignore The 80-20 Rule?
Why Do So Many Business People Ignore The 80-20 Rule?
Richard says that 80% of our results come from 20% of our activities. This can be seen to be true in just about any business I have had any involvement with as an Accountant and is something I continually tell people to look out for.
I have seen lots of examples of business people focusing on the small parts of their business that clearly produce exceptional results, and of the phenomenal increase in the success of the business when those small core parts are developed and expanded.
If you look into your own business you will see many things you do as part of your daily routine that have little or no impact on the business turnover.
For example, let's look at a one person business making and selling candles on the internet. They will normally have to make the candles - a drawn out process for a specialist candle maker. Market the candles, handle the orders for the candles, package the candles, weigh the packages, take the packages to the post office, buy the packaging materials, buy the candle materials, deal with customers and suppliers on the phone, by post or email, update the website and/or adverts, design new candles regularly, keep in touch with existing customers to show new designs, continually look at new ways of finding new business and raise awareness of the candles...and so on.
All of these activities are important for the success of the business, but look closely and you will see lots of the things needing to be done do not immediately produce financial results. If you were that candle maker, which of the activities listed would you consider to be the 20% core activities that produce most of the income?? Would you think it was the selling? the manufacturing? the packaging? keeping old customers aware of new designs?
I am not going to tell you now!! That would be too easy.
All I want is for you to look at your own business and see if you can see the 80:20 principle at work. If you can see it, what should you do??
If you want astonishing success, you offload all the subsidiary activities that make up the 80% which do not directly affect your success immediately and focus on your core expertise.
Employ staff or outsource every single task you can that distracts you from your main objective and leave your mind clear to focus on developing the small part of your business that gives you 80% of your income. Just think of the growth you can easily achieve by shedding work that other people can easily do for you. If you can increase that core 20% of your business to just 30% initially, your business overall will grow by 40% - more than enough to pay for the staff, or outsource help that you need. If you can increase that core 20% activity up to 50%, your growth overall will be 200% or more.
It sounds good in theory, but does it actually work?
YES. Any business that has offloaded it's bookkeeping to a dedicated bookkeeper, or bureau like mine, will tell you what a difference it has made to their growth.
Go on - have a look into your business and find just one task to offload to someone else for a week - and see for yourself. Then find another, and another.....
You will never look back!!
Why Do So Many Business People Ignore The 8020 Rule - To learn more about this author, visit Ray Stewart's Website.
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I was discussing Richard Koch's book "The 80/20 Principle: The Secret of Achieving More with Less!" with a client yesterday and it became apparent that lots of business people are either not aware of this concept, or do not know how to relate it to their business.
Richard says that 80% of our results come from 20% of our activities. This can be seen to be true in just about any business I have had any involvement with as an Accountant and is something I continually tell people to look out for.
I have seen lots of examples of business people focusing on the small parts of their business that clearly produce exceptional results, and of the phenomenal increase in the success of the business when those small core parts are developed and expanded.
If you look into your own business you will see many things you do as part of your daily routine that have little or no impact on the business turnover.
For example, let's look at a one person business making and selling candles on the internet. They will normally have to make the candles - a drawn out process for a specialist candle maker. Market the candles, handle the orders for the candles, package the candles, weigh the packages, take the packages to the post office, buy the packaging materials, buy the candle materials, deal with customers and suppliers on the phone, by post or email, update the website and/or adverts, design new candles regularly, keep in touch with existing customers to show new designs, continually look at new ways of finding new business and raise awareness of the candles...and so on.
All of these activities are important for the success of the business, but look closely and you will see lots of the things needing to be done do not immediately produce financial results. If you were that candle maker, which of the activities listed would you consider to be the 20% core activities that produce most of the income?? Would you think it was the selling? the manufacturing? the packaging? keeping old customers aware of new designs?
I am not going to tell you now!! That would be too easy.
All I want is for you to look at your own business and see if you can see the 80:20 principle at work. If you can see it, what should you do??
If you want astonishing success, you offload all the subsidiary activities that make up the 80% which do not directly affect your success immediately and focus on your core expertise.
Employ staff or outsource every single task you can that distracts you from your main objective and leave your mind clear to focus on developing the small part of your business that gives you 80% of your income. Just think of the growth you can easily achieve by shedding work that other people can easily do for you. If you can increase that core 20% of your business to just 30% initially, your business overall will grow by 40% - more than enough to pay for the staff, or outsource help that you need. If you can increase that core 20% activity up to 50%, your growth overall will be 200% or more.
It sounds good in theory, but does it actually work?
YES. Any business that has offloaded it's bookkeeping to a dedicated bookkeeper, or bureau like mine, will tell you what a difference it has made to their growth.
Go on - have a look into your business and find just one task to offload to someone else for a week - and see for yourself. Then find another, and another.....
You will never look back!!
Why Do So Many Business People Ignore The 8020 Rule - To learn more about this author, visit Ray Stewart's Website.
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Anne BarrAnne Barr has over 26 years experience in sales and marketing, six years as a franchisee. She has assisted over 367 business owners and purchasers to achieve their goals in career change, transition and exit strategy. She holds the designation of Certified Franchise Executive from the International Franchise Association, Certified Business Intermediary from the International Business Brokers Association and Board Certified Broker from the Texas Association of Business Brokers. Anne is active in professional organizations, networking groups and volunteers for non-profit entities. As owner/operator of four successful businesses, Anne has proven people skills and enjoys helping clients find the right "fit" in business ownership. Visit www.FranchiseOpportunitySpecialist.com for more information about me and my company. - Visit Anne Barr's Website |
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