What Have You Actually Achieved Today? The 80/20 Principle for Small Businesses.

Jason Brockman (0:00)

You know that feeling when you've had an absolutely manic day. You've answered 47 emails. You've been in 3 meetings. You've updated the website. Sorted out an invoice. Posted something on LinkedIn. Chased a supplier. You've been really busy. And then you get to 5 o'clock and think, what have I actually achieved today?

That's where the 80-20 principle comes in.

It's popularized as a business and productivity tool by Richard Koch in the book of the same name. The basic idea is this. A minority of what you will actually do create the majority of your results. Or as we normally describe it, roughly 80% of the results come from roughly 20% of the cause.

Now, don't get hung up on those numbers. Doesn't have to be exactly 80-20. It could be 70-30, 90-10, 95-5. The important bit is the imbalance. Because you tend to assume that we've got 10 things to do, and those 10 things are roughly as important to each other. They're not. Some of them matter enormously. Some of them barely matter at all. And that's true all over your business. Look at your customers. You may find a relatively small number of them generate a disproportionate amount of your profit. Look at your profits. They're often doing the most of the heavy lifting. Look at your marketing. You've probably got 5, 10, maybe 20 different things you could be doing. But which ones actually bring you in the customers? And then there's the big one. Your time.

John used to work more than 100 hours a week. Then he decided he particularly didn't fancy doing that for the rest of his life. He did some 80-20 analysis, and he looked at everything that he was doing and asked, which of these things actually produce the results? He identified the valuable minority, and pretty much stopped doing everything else. He now talks about working around 20 to 25 most weeks, while getting more done than he did in those 100 hour weeks. Not because he's learned to type five times faster, not because he's discovered some magical productivity app, but because he stopped treating every task as equally important. And that's the bit of 80-20 that I think gets missed. People hear it and think, ah yes, 20% of my work creates 80% of my results. Interesting. No, that's not the point. Question is, what are you going to do differently now that you know?

If one marketing channel brings you most of your good customers, why are you spending the same amount of time on the other six? If three customers generate a huge chunk of your profit, shouldn't you be looking after those relationships particularly well?

If one product makes most of your money, why are you spending all of your time developing new products? And if two hours of focused work each week genuinely move your business forward, why are those two hours being squeezed in around emails, meetings, and everyone else's demands? This is where 80-20 fits beautifully with something we bang on about in the 1% club. The one thing.

John describes 80-20 analysis as looking for the small number of tasks that have a disproportionate effect on your results. Once you've found them, you protect them. They go in the diary, they get your best time and your best energy. And the low-value stuff, well, let's automate it. Delegate it. Batch it. Do less of it. Or radical thought, just don't do it at all. Because being productive, it isn't about squeezing more activity into your day. It's about getting more results from the time and energy and money that you've already got. So here's your one thing. Pick one area of your business. It could be your customers, your products, your marketing, or if you're feeling brave, how you spent your time last week.

Write the whole lot down and ask which small number of these produced the disproportionate amount of the result I actually wanted.

Find your valuable 20% and then make one decision. What are you going to do more of? And what are you going to do less to make more room for it? Because your goal isn't to squeeze more things in, it's to get the stuff done that actually matters. That's the 80-20 principle.