80/20 – ignore it and your profits suffer
Its easy to dismiss the 80/20 principle as just another business gimmick...
But, if it worked 100 years ago to decide the wealth of a nation and it transformed the fortunes of IBM and a small carpet business in Georgia surely it is worthy of a little attention…
Yes, your business is unique, but just spending a little bit of time might help you find at least one way of using the 80/20 principle to improve the results of your business.
The first job is to identify your top 20% of customers, your top 20% of products and services, your top 20% of activities and your top 20% of high value time.
Find the customers, products or services that generate the most income (the 20%) and drop the rest (the 80%) that only provide marginal benefits.
This sounds brutal but reducing the products that make little or no profit and the number of lowest value customers is easier to achieve and makes perfect business sense.
Spend your time working on the parts of the business that you can improve significantly with your core skills and leave the tasks that are outside your best 20% to other people.
Work hardest on elements that work hardest for you.