Maximize efficiency with 80/20 principle
July 02, 2012
BUSINESS TIPS ARTICLE
By: Jessica Lambert, ASU-SBDC Training Coordinator (Business Development) and CTC
SAN ANGELO, Texas Sometimes work can get hectic. It can get overwhelming to the point that you cant remember what youve done, what you havent done and what still needs to be done.
In these types of situations, priorities can become your best friend. With priorities you know that you are getting the most important things done and can get back to the details later. But when its your business and everything is important, even prioritizing can become a difficult task. That is when the 80/20 rule can come in handy.
The 80/20 rule, or the Pareto Principle, says 80 percent of your effects come from 20 percent of your resources. Basically, 20 percent of your work is getting results, the other 80 percent of work is still important, but it is attributing to only 20 percent of your results. How can this help you?
In times of intense stress or too much to do, too little time, take a moment to look at the big picture. What are the things that have to be done that make the biggest difference toward the success of your business? This is different for each and every business.
The 80/20 rule, according to Robert Koch in his book Living the 80/20 Way, has many applications in the entrepreneurial and business world. Additional claims state you gain 80 percent of your profits from 20 percent of your customers, 80 percent of your sales come from 20 percent of your products and 80 percent of your sales are made by 20 percent of your sales staff.
When you are able to see this rule in your business, you can begin to find opportunities to focus on which resources are providing the most results, the most profit, the most customer satisfaction, etc.
If you are in a situation where work is picking up, it might be time to consider expanding or hiring extra employees. The advisers at the Angelo State University Small Business Development Center can help you take that next step. Advising services are available at absolutely no cost to you.
Are you in a situation where business is slow? It may be time to take a step back and see if youre focusing too much of your time and effort on work that isnt providing results. The staff of the ASU-SBDC can help in slow times as well.
Whether business is booming or business is slow, the 80/20 rule can help with efforts and resources that produce the most results. Once you know the 20 percent of your resources that produce 80 percent of your results, you can begin to cut the fluff and help your business grow.
Business Tips was written by Jessica Lambert, Business Development Training Coordinator and Certified Training Coordinator of Angelo State Universitys Small Business Development Center. Contact her at Jessica.Lambert@angelo.edu.