Understanding The 80/20 Rule and How To Apply It In Your Coaching Business
The 80/20 Rule. The Pareto Principle. The Law of the Vital Few.
They’re all the same thing. It’s the principle that 80% of our results come from 20% of our effort.
Tim Ferriss popularized this idea in his book – The Four Hour Work Week. While the owner of a supplements company, he took a good hard look at his sales, and noticed that – true to the 80/20 rule – 80% of his revenue came from 20% of his clients – AND they were the 20% that he enjoyed working with the most! As a result, he closed 80% of his accounts and focused ONLY on the 20%. The company and the revenue grew – but equally important – he was able to work WAY less.
Take a moment to measure your coaching business against the 80/20 rule (Pareto Principle):
Where does the vast majority of your revenue come from?
Who are the people you LOVE to working with the most?
Which of your efforts have the greatest impact?
Which of your efforts produce the greatest income?
Which of your tasks produce the greatest satisfaction?
Of the projects you are working on, which move the needle forward the farthest the fastest?
This quick assessment will yield GOLD for you.
What if you were to focus solely on the 20% of your business that yields the greatest results?
How would that change your business?
What would you focus on more?
What would you STOP doing?
How would that impact the amount of time you are spending on your business?
For example, you may find that 80% of your revenue comes from clients you get from speaking gigs you do for women’s entrepreneurial organizations. The resulting change would be to focus 100% of your efforts on landing speaking gigs for those types of organizations and stop trying to speak anywhere and everywhere – Kiwanis, Rotary, the local pet shop.
You may find that your list grows the fastest and the most when you offer a webinar. So if your goal is to grow your list, offer MORE webinars and focus less on other ways of growing your list.
Your Turn to Apply the Pareto Principle
What did you discover? As a result of your quick 80/20 analysis, what will you focus on MORE and what will you STOP doing or focus on LESS in your business?
Here’s to creating 80% of your results from 20% of your efforts.