Applying the Lessons of an Italian Economist to your Business

Vilfredo Pareto

One of the most popular observations I make watching small business owners is the never-ending spiral of trivial activities that they undertake day after day after day.  Though most of these seem important and URGENT at the time, most are low leverage, meaning in six months it wouldn’t have made a difference whether they were done or not.  We seem to focus on the trivial many versus the critical few.

Before you start another day in this overwhelm consider how the 80/20 rule plays a role in your business.  The Italian economist taught us that 80% of the affects come from 20% of the causes.  While you probably can already confirm that 80% of the time you wear only 20% of the clothes in your closet,  consider that 80% of your results are coming from 20% of your activities in your business.  So what are those activities?  Most likely they are one of three things:  attracting more clients, generating more revenue from existing clients or increasing profit margins.  Start looking at your moment to moment activities and question yourself on their impact.  By the way, you might also find that 80% of your sales are coming from 20% of your clients.
Rick Lugash

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