One of the key principles that I have implemented in my life to gain my current success is the Pareto Principal which is more commonly known as the 80/20 principal. In this article I’m going to run you through what it is, why it’s important and most importantly, how to implement it in every aspect of your life. The key to this entire strategy is cutting out the non-important in an effort to increase revenue, reduce stress and not waste your precious time.
What is the 80/20 Principal?
“The 80-20 rule, also known as the Pareto Principle, is an aphorism which asserts that 80% of outcomes (or outputs) result from 20% of all causes (or inputs) for any given event. In business, a goal of the 80-20 rule is to identify inputs that are potentially the most productive and make them the priority.”
Basically what this means that if you measure most inputs in life you will find that roughly 20% (in many cases far less) of them account for 80% or more of the results or outputs. This maps out to most things in life, 20% of the people own 80% of the World’s wealth for example. This principal is incredibly accurate for most things in life and even in nature.
Why is it important?
This might already be obvious to a lot of readers here but just in case, let me offer up a simple argument. If you knew the exact 20% of your efforts that were accounting for 80% of your income, would you spend more or less time working on these items? The answer is obvious you would spend more. Likewise you will be surprised to find out that 80% of the time you currently spend working is accounting for a mere 20% of your income. If we put this into a simple working day, then here is how it would look. During a standard 8 hour work day, this means that 1 hour and 36 minutes of your work is accountable for 80% of your paycheck.
Therefore if you were to figure out which 1.6 hours of your day are creating the biggest results, you could simple cut out everything else and spend 3 hours a day working on those tasks. Double your income and work less than half the hours. That is an, albeit very simplified, example of why the 80/20 rule can have such a massive impact on your life once you implement it correctly.
How to implement it
The problem with the 80/20 principal is that it isn’t very easy to implement. The issue is that you need to have data on hand to allow you to deduce which areas to focus on. Therefore if you haven’t started your business yet, the sad fact is that you will need to try various different approaches before you can begin cutting out the non-important. If you have been working on your business or if you want to apply this to something else, then here are the steps to apply to figure out which 20% is causing the 80% of results.
- Identify all your daily/weekly tasks.
- Identify key tasks.
- What are the tasks that give you more return?
- Brainstorm how you can reduce or transfer the tasks that give you less return.
- Create a plan to do more that brings you more value.
- Use 80/20 to prioritize any project you’re working on.
- Set a plan to focus on activities that produce the most results.
If you have some questions then pop them in the comments and I’ll help where I can!