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Independent Consulting: Applying the 80/20 Principle to Your Business

Written by: Larry Ferguson

Article Overview: The 80/20 principle applies to everything in life, including growing your consulting business. It comes down to managing your limited time so you’re doing the highest value work, and how to outsource the lower value work. One warning: There is something I believe you should never outsource.

Independent Consulting: Applying the 80/20 Principle to Your Business

You're probably familiar with Pareto's Principle, also called the 80/20 Principle. What's the idea behind the 80/20 principle? It's about focusing on what you're good at and what you enjoy.

What do you do well? Where's your passion? Make that the focus of what you do, and then delegate the tasks that you don't do well or that would just suck away your time. It's being smart about how you run your business.

For example, ask yourself this question: Are you good at bookkeeping? Do you do the bookkeeping or do you hire a bookkeeper to take care of that for you?

Is it worth me spending hours and hours trying to find one single error in the checkbook or is it more expedient, and from a business perspective a better use of time and dollars, to have someone else take care of that who can do it masterfully, quickly, and efficiently without hassle?

Another example is that I love gadgets and I love the internet, but is it worth me spending five hours to figure out why something is not working when I can call Microsoft?

Think about how you invest your time and how you use your dollars to really move your business forward. Use the 80/20 almost as a mantra. It will help you identify what you do well and what's worth taking off your plate and delegating to someone else.

One caveat to this and it's a big one is that you cannot outsource your sales and marketing. This is a service business and it's a relationship business.

What you build with people, you can't farm out. The chemistry you create with clients and prospects is so important you can't give that away. That's really the heart and soul of what you're about.

If you're selling a physical, tangible product, it's a little bit different, but as a consultant this is a service industry and people buy you. That's the one aspect of your business that I believe you can't outsource to anybody.

Other things regarding the operations - the structure, the finances, the IT, administrative - these are things you can delegate. Let others do what you don't do best, so your time is best invested in bringing in new business and building relationships.

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Article Tags: bookkeeper, bookkeeping, business perspective, caveat, checkbook, chemistry, gadgets, hassle, heart and soul, little bit, mantra, operat, passion, principle, prospects, relationship business, service business, strong one, tangible product, use of time



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