Most small business owners have a long, long, long list of things to do every day of every week. It’s relentless. It can also be a little demoralising, as the list never gets any shorter and you feel like you never achieve anything. I want you to consider what would happen if you applied the Pareto Principle to your Weekly and Daily list.
The Pareto Principle, or the 80/20 Rule as it’s otherwise known, states that roughly 80% of effects come from 20% of the cause. It’s called the Pareto Principle after the Italian economist Vilfredo Pareto, who observed in 1906 that 80% of the land in Italy was owned by 20% of the population, and he continued these observations into other areas of his life.
The 80/20 Rule is commonly used in marketing – 80% of your sales are typically generated from 20% of your clients – and the same is true of your profit. It’s one of the reasons why big brands implement sophisticated data-driven communication programs, to ensure they keep their ‘Top 20%’ of clients happy and loyal. It’s also why as consumers our wallets and purses are stuffed full of plastic loyalty cards; the cards allow the brands to capture valuable transactional information on our purchases they can then use to drive more relevant marketing communications.
Unfortunately it’s something that is not feasible in most small businesses either because they don’t have high-frequency transactions and/or the systems required to capture, manage and analyse the data is too cost prohibitive for the likely return. However they can put The 80/20 Rule to good use on a day-by-day basis when they’re looking at their long list of things to do.
Try this as an experiment. Get into the practice of writing up your To Do List at the end of each day, for the following day (or you may create a weekly list at the end of each week like I do). Then review it, and consider what’s the 20% of tasks that’s going to deliver the greatest return. Put simply, if you have ten items on your list for the day, choose the two items that will provide the greatest benefit to you or the business. The other eight items can be delegated, moved to another day or dropped altogether.
Try it for a day or two and see how it works. You should find that you’re more productive, plus you’ll also feel like you’ve accomplished more, which is a great feeling.
Let me know how you get on!