Do you ever finish a hectic day and wonder what you’ve achieved, whether you have been busy sorting out a process issue in your company or resolving a nagging problem. When leading a company, you will face many challenges. It’s what we all love about the role of running a business!
I recently discovered the 80/20 Pareto Principle, while I have experienced issues discussed in Vilfredo Pareto’s system, Pareto does such a great job in illustrating how to improve productivity, I felt compelled to share.
For many like myself who start a business, we are skilled within our craft, whether this is a baker or jewellery maker, we have started a company based around our interest. That inherently means we may not be natural business people, and the running of a business is simply part of the delivery mechanism to sell our craft. While this may work effectively for a single worker, however, when you wish to expand your team, your role changes, you become the person responsible for keeping other people employed.
If you wish to turn a sole trading company which in many instances may feel like having a regular job, but for multiple employers into a capital generating business. Your role turns from practitioner into sales and business leader.
So what is the 80/20 principle? Pareto concluded that 80% of consequences come from 20% of causes. This means that 20% of your time at work results in 80% of rewards. So if you can find what you are best at, what drives income within your business and remove all other tasks from your daily diary through automation and delegation, you will have more time for tasks which propel your success.
However, what is even more exciting is that you can also use this principle on 20% of the fulfilling time, meaning that that you could effectively refine this principle to identify the 4% of your overall time which currently results in 64% (80% of 80%) of the reward. This requires thorough planning and is in many situations an ideal rather than a reality; however, having a goal should lead you in a positive direction.
To achieve this principle in my own business, I have put the following steps in place.
Steps to greater success
Create a task list, write down every duty that currently occupies your daily work. Don’t worry about setting the priorities at this point; we are merely doing a brain dump of all those small jobs which currently suck up all your time.
Now that you have a list of jobs, write down how your business currently generates enquires and sales. How did your existing customers find out about you? Website, landing page, blog posts, network meetings, eBay, social media etc.
It is only by defining what has been previously prosperous for your business can you generate new methods for getting more sales. If you are running a new business, you may need to experiment here and take a more protracted approach in developing your ideal 80/20 work balance.
So I’m sure the next step seems obvious, but cross-reference your two lists, and you will see a pattern here. You will see that some of the tasks you undertake daily have little or no impact on sales while other jobs are directly related to increasing your business balance sheet.
Now you have a list of impactful duties you can decide how to manage these tasks. For many of us, we will have natural preferences for specific jobs. If you are an accountant or engineer, you may find web design low on your list of enjoyable duties but know that your business website receives many enquires. This is to say that other tasks could be more naturally aligned with your pleasures and talents.
With a pragmatic mind, decide what duties can be automated or delegated. You may find opportunities within your business which generate income but currently feature low in terms of your own preferences. In such cases treat these tasks with priority by delegating duties to someone who enjoys this type of work.
Achieving the 80/20 work-life is a long game which I’m sure will present many challenges and bumps along the way, however with a clear vision and strategic approach I’m sure it is possible to plant favourable results.