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Why Do So Many Business People Ignore The 80-20 Rule?

Why Do So Many Business People Ignore The 80-20 Rule?

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 Barr
Anne 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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Stephanie Robey is President and CoFounder of Pivot Positive, LLC - an Internet marketing business focused on helping people start work at home ventures. Previously, she was employed at The Search Agency with over 20 years experience in graphic design and 10 years experience in online marketing. She was responsible for launching the Conversion Path Optimization (CPO) unit where she and her team have conducted hundreds of optimization tests for online companies across multiple verticals.

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John Brennan Ed.D. Dr. Brennan is President of Interpersonal Development, LLC, a training and development firm. Interpersonal Development has provided sales training and coaching to more than 3,000 sales reps from over 100 companies. A native of Australia, Dr. Brennan received his doctorate from the University of Rochester. His dissertation researched the effectiveness of Behavioral Modeling Technology in training people in interpersonal skills. While he has spent most of his career designing or delivering training, he was also a Vice-President of Sales of a training and development franchise with operations in 25 markets. Dr. Brennan has designed and delivered sales training in North America, Asia, Europe, Australia and the Middle East. He has been a guest speaker at numerous national and regional professional conferences. When Microsoft wanted Best Practices articles on sales for their web site, they called Dr. Brennan. The results are at http://office.microsoft.com/en-us/FX011387391033.aspx His firm’s clients have included Volvo, The Prudential, Merrill Lynch, Eastman Kodak, Gannett, Equifax Europe, the Economist Group and countless small businesses. - Visit John Brennan's Website

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David Barr is the President of Venture Opportunities, Inc. David has been a professional business broker/intermediary since 1980 focusing on General Business Brokerage and Mergers and Acquisitions representing client transaction value from $400,000 to $20,000,000. Mr. Barr has handled the sale of over four hundred and fifty companies. David earned a university degree from the State University of New York majoring in economics and business. David holds the Mergers and Acquisition Master Intermediary and the Certified Business Intermediary designations from the International Business Brokers Association. He is also a Senior Business Analyst and a Texas licensed Real Estate Agent. For more information about David and Venture Opportunities, visit www.bizdealmaker.com. - Visit David Barr's Website

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With nearly two decades in the advertising and design business, with clients like Domino's Pizza, General Motors, Direct TV, Pedigree, Wolfgang Puck, Higher Octave Music, Hollywood Celebrity Products, Disney, and Paramount, as well as thousands of entrepreneurs around the world define, structure, communicate, and position their business for greater profits, BrandU(R) co-creators Kim Castle and W. Vito Montone discovered that entrepreneurs could experience the same power that big brands command for a fraction of the cost with the world's only process-based results-drive Integral approach to business creation. BrandU(R) is helping entrepreneurs grow with the power of extreme clarity from idea...to brand...to market(TM) and helping one million entrepreneurs become successful and whole so that they can make a difference in the world. Are you one of them? If you want to experience clarity all the way to the bank(TM), get started now at http://www.brandu.com. - Visit Kim Castle's Website

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David Acheson is the founder of DCJA Consultancy. DCJA Consultancy is a management consultancy business specialising in B2B sales consultancy. They offer bespoke and packaged sales consultancy including Sales Optimisation Review, Interim Sales Management, Sales & Marketing Review, 1:1 Sales & Management Staff Analysis, Management Training, Solution Sales Training, Creation of New Pay Plan, KPI's, run Customer Feedback Campaigns, assist with Recruitment, Coaching, Appraisals and set up Strategic Marketing Campaigns.  David spent his early career in accountancy and then moved into sales in 1982, working in Office Equipment, IT, Advertising, Training, Outsourcing and Consultancy. He has held many Senior Positions in SMBs and Global Organisations including Head of Sales Operations & Head of Business Development. His knowledge, skills and great experience of the Sales Industry has led to David making keynote speeches and running educational sessions to key businesses through organisations including The Chamber of Commerce and Business Link. - Visit David Acheson's Website


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Ray Stewart
(Visit Ray's Website) Ray Stewart is the MD of Coalville Business Services Limited. He writes articles and reports about bookkeeping and business growth strategies, the two areas of business he is most passionate about. His bookkeeping business website is at http://expertbookkeeping.info and is a free resource for people looking for simple answers to bookkeeping questions and a chance to speak to him for free if you can't find the answer you are looking for. You can also visit his private blog at http://raystewart.biz and subscribe to the RSS feed there to keep right up to date.

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