The 80/20 Rule and Your Business Growth

We all want our business to grow. The problem, as will a lot of things in life where we want to make progress, is that we do not necessarily know where to start. You want to improve things. This can be in one of several ways. You might want sales to grow, costs to fall, your promotional activity to be more effective. Whatever it is that you might want to resolve, you might be totally when it comes to finding a solution. There is a very simple rule that you can go by which can help you improve your business. 80/20 is a fundamental ratio which applies to a lot of things in life. It applies to business, too. This 80/20 rule is also known as the Pareto principle. In short, it means that 80% of the effect comes from 20% of the cause. Using this rule can save you a lot of time and energy. It might seem like an arbitrary ratio. This is because it is. In some cases, the ratio is higher, it can be 90/10 or even 99/1. The point is that it serves as a very useful way of resolving whatever business issue that you might have.

When it comes to growing your business, you will want investors. You need to use this time wisely. If you review what you do to find investors, you will certainly find a ratio approaching 80/20 when it comes to finding investors, and the investment gained from said investors. You will notice that 20% of your time spent looking for investors locates 80% of them. And in turn, 20% of those investors will give you 80% of your investment. This means that when it comes to growing your business, particularly when it depends on external investors, you need to identify this magical 20% which yields 80% of your investment. Once done, it;s quite simple. Repeat the process. Within that 20%, find the 20% of the 20% which yields 80% of the investment return from the 80% gain from the initial 20% of activity.