Do you want to improve productivity as a small to medium business owner? However, increasing productivity is not about doing more work; it is about utilizing energy for the right things. This idea is the grit of the Pareto Principle 80/20 rule; 20% of the input generates 80% of the results.
Read more to learn how to identify your 20% and implement Pareto Principle in your day-to-day work life.
When you work hard for 8 hours and still feel that the level of achievement is way less than expected, it seems you were not working on the right things. Instead, maybe you were focusing on the wrong lower output tasks. Focusing on the wrong things can include any of the scenarios – like the possibility of working on lower outcome tasks, spending long hours replying to emails, constantly hopping from one task to another from a bunch of activities, or you caught up with some urgent work. All these tasks may not contribute much to accomplish your daily goals.
The 80/20 rule helps to put things into perspective by observing that most essential items in life allocate unevenly. This principle indicates that 80% of all results are from 20% of the effort.
Interpretation of Pareto Priniciple 80/20 rule
20% of the tasks contribute to most of the progress. That remaining 80 % gets utilized in polishing, fine-tuning, and adjusting that foundation. The justification for this staggered process is that not all work requires the same amount of time. So, according to diminishing marginal benefit, the longer we work, the less force and effect our efforts contribute towards results.
The Pareto principle is not about setting the volume of time. It emphasizes our efforts on the work that matters the most – discovering and prioritizing 20% to fuel 80% of our results. We don’t need to utilize this principle all the time. Focusing on the 20% will bring better efficiency to create a difference.
• 20% of customers contribute 80% of your revenues: Focus on satisfying these critical customers.
• 20% of staff contribute 80% of results: Focus on rewarding these core employees.
There are various ways the Pareto principle can transform your business. They are as follows:
It is normal to feel worn out and stressed when you spend your energy on any project which does not produce desired results. Implementing the 80/20 rule helps identify the tasks that significantly impact business and focus your time and energy on those activities for positive outcomes.
Frustration and boredom build-up only negligible results. Identifying the most critical tasks and working on them would head towards more enjoyment and involvement with work.
Through the Pareto principle, you get to do more with less effort and time. This available time and energy you can utilize on your hobbies and with family.
Some of the strategies you can utilize to make the Pareto principle work are as follows:
Identify the pattern of time spent on each effort. Examine and track all activities for a week.
Streamline your business by embracing automation wherever possible to improve the results.
For example, we can talk about invoice management which is traditionally a manual process. Following up and spending hours to collect invoices, manually processing them can easily take up over 10 to 12 hours a week!
Using an invoice automation tool like GetMyInvoices can help streamline your business process by collecting invoices, processing them, and completing payments through your bank. You can use the time saved on the 20% of the tasks that matter.
A small percentage of your clients are responsible for a large chunk of revenue, so invest time and energy on them.
Get rid of all those tasks which consume 80% of your time, energy, and resources, producing 20% of results.
Utilizing the Pareto Principle to life impacts us in a holistic way to embrace our health and happiness quotient.
We have a limited amount of time, energy, and resources to invest in various tasks to achieve targets. Pareto principle ensures that your time, energy, and resources are utilized in the proper way to redeem the highest returns.
See the benefits of automated invoice management:
Better overview. Less accounting work. More time for your ideas.