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Pareto & Priorities in Business
There are two things that business owners be that Internet Marketers or traditional bricks and Mortar business owners find challenging: thinking ahead and doing things in order of importance. Establishing priorities and doing FIRST Things FIRST. And yet this skill is so critical to success.
Learning to establish priorities and doing first things first can make the difference between success in business and just surviving. Working hard or working smart. And the same can be said for all the other areas of our lives.
The fact is you will simply never get everything done and you must accept this premise.
Something’s are just not worth your input.
James Fields (Management Consultancy) stated the average worker is productive only 55 percent of the time, 15 percent is spent on personal time and the remaining 30 percent is lost through poor planning, unclear assignments and poor discipline.
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Most business owners have heard of the Pareto Principle, more commonly known as the 80/20 Principle. Roughly stated this says that 80% of your business comes from 20 % of your customers. It’s more a rule of thumb than an absolute rule but it’s fairly accurate.
Other examples of the Pareto Principle are:
20 percent of a book contains 80 percent of the content.
20 percent of our work gives us 80 percent of our satisfaction.
20 percent of our products bring in 80 percent of the profits.
When it comes to your priorities, 20 percent of your priorities will give you 80 percent of your production IF you spend your time, energy, money and personnel on the top 20 percent of your priorities.
In the area of customers, it is vital to identify the 20 percent who account for 80 percent of your business. These are your “crème de la crème” and strategies must be put in place to care for them and provide outstanding communication and service.
For your team, you must identify the top 20 percent producers. Spend 80 percent of your people time with these people to develop them to their full potential
Before you can invest time in ensuring your priorities are met you have to clearly define what they are.
Establishing priorities will come from your mission, your goals, your time frame, all other resources, planning ahead, current emergencies/crisis and potential return on investment.
Also you have to understand where you currently invest your time, and the best way to do this is to simply keep a record for a two week period of the activities you undertake and then analyse and compare them to your known priorities. You might be surprised to discover just how much time you spend on dealing with things that are low priority
When you establish priorities you could get as much as a fourfold return in your productivity. Think what this would mean in your business! Every business person needs to understand the Pareto Principle and how to define priorities as it applies to the areas of customers, marketing, systems, team and leadership.
In leadership, take an honest look at the question “What do I have to do that no one else can do?” A leader can give up everything except final responsibility; you must learn to delegate and never abdicate. You can decide whether you will be reactive or proactive when it comes to the use of your time.
The questions are not;
“Will I be busy?” but “How will I invest my time?”
“Will my calendar be full?” but “Who will I choose to fill my calendar?”
“Will I see people?” but “Who will I choose to see?”
Here are six simple steps to begin your new focus on the 20 percent and setting priorities.
1. Clarify exactly your mission and goals.
2. Place a value on all your activity. What is the value of ONE minute? If you new this you would treat it with respect.
3. Don’t allow others to determine your schedule.
4. Complete a time audit on yourself and evaluate your daily routine.
5. Recognise time wasters.
6. Adopt a do it know mentality and either; Do it, Delegate it or dump it.
Do this, make appropriate changes and watch your productivity and personal satisfaction rise to new heights!
I highly recommend the excellent book The 80/20 Principle by Richard Koch
Until the next time
Courtney
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How long have you been doing this?
How long have you been doing this?
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