THE 80/20 RULE

The Pareto Principle, also known as The “80/20 Rule,” is a very simple yet important concept. It’s named after the Italian economist Vilfredo Pareto who discovered that eighty percent of the land in Italy was owned by twenty percent of the people.

What’s important about the principle is that it occurs extremely frequently. Here are some examples:

If you look, you’ll find that about eighty percent
of your business comes from approximately
twenty percent of your customers.

Even more importantly, if you look closely at that twenty percent, it may be that the top twenty percent of that twenty percent (or the top four percent overall) may represent sixty-four percent of your sales (calculated as eighty percent times eighty percent).

Twenty percent of your time likely accounts for eighty percent of your results.

Focus on ways to leverage this information in order to grow your business and use your most precious resource—your time—most effectively.