You have probably heard of the 80/20 rule… but do you understand how it could change your business?
To review, the 80/20 rule is an observation which states that, in many areas of life as well as business, that 80% of the results come from 20% of the effort. I have found that this is especially true when it comes to small businesses.
Think about it for a moment: how do you spend your time on a daily basis? If you are like the vast majority of small business owners, most of your time is spent either responding to crisis situations, or performing technician-level work.
At best, the time you spend this way keeps your company moving—it keeps your head above water. On the other hand, you probably spend very little time strategizing, observing your market, and planning future growth. In terms of growing your business, this is the time that translates to results. It’s the time you are spending most effectively, because you could probably pay someone $12 per hour to do most of the ‘80%’ type work you do, couldn’t you?
So how can you make sure that you are maximizing the time you spend growing your business? Budget at least 4-5 hours per week for the following activities:
- Keeping up with the state of your market. This includes seeing what your competition is up to as well as connecting with target customers and finding out whether their needs are being met.
- Creating and refining a marketing strategy that highlights your points of differentiation and the value you offer. You need to give customers in your market a reason to choose your business instead of the competition. Focus on clearly getting this message across to your audience!
- Working on a long-term, big-picture plan for the future of your business. Far too many business owners fly by the seat of their pants. Where do you want your business to go? How will you get there?
- Looking for opportunities to provide additional value to your customers. The value you provide to your clients and customers, as compared to the value offered by your competitors, is the key to the long term success of your business. Provide excellent value and bringing in business becomes easy.
- Creating systems to make your operation more effective. Your time, and the time of your staff, is highly valuable. What can you do to make your team more effective? What can you do to make yourself more efficient—so that you can spend more time working ON your business instead of IN it?
Does the 80/20 rule apply to your business? Do you spend too much time on low-level work, and too little time growing your business? If so, the first step is to develop a plan to take your business to the next level. Let me know if you’d like some assistance!
How do you spend your time? Are you caught up in low-level work and unable to spend your time efficiently? Or have you been able to spend your time working on the “20%” tasks that produce results? Leave a comment and share your experience!