Entrepreneurs and Paid Time Off – The 80/20 Rule

 

In 1897, Italian economist Vilfredo Pareto discovered the 80/20 rule while studying income and wealth patterns. It is so effective Richard Koch wrote a book on it – The 80/20 Principle: The Secret of Achieving More with Less. Well we can save you the time of reading book if you prefer. Here’s what you should know. The 80/20 principle is this –80% of business results flow from just 20% of your efforts. This is one of the secrets of highly effective people and organizations. Mr. Pareto’s study showed that 20% of the population enjoyed 80% of the resources. Pareto applied this to consumers to discover that 80% of what we achieve in our work is a result of 20% of the time spent; and that 20% of customers are usually 80% of a businesses profits. The statistics work like this. 20% of inputs = 80% of outputs; 20% of causes = 80% of consequences; 20% of our effort = 80% of results.

 

Koch’s book states that the top 20% professionals earn 80% of the income in any one business. The top 20% of businesses do 80% of the sales. The top 20% of friends are 80% of the important ones.

 

If you want to benefit, you’ve got to take action. The 80/20 wisdom says:

 

1. Celebrate exceptional productivity
2. Look for shortcuts
3. Be selective
4. Strive for excellence in a few things, rather than many
5. Delegate or outsource as much as possible
6. Choose careers, employers, and employees with extraordinary care
7. Only do what you do best and enjoy most
8. Do the 20% that leads to 80% first
9. Make the most of the 20% of our time that brings 80% of rewards

 

Making things simple, and not complex increased productivity. In negotiations, 20% of the issues comprise over 80% of the value of negotiation. When you negotiation build a long list of spurious concerns and requirements, make them seem as important as possible, the in closing stages, not to early, concede 80% of unimportant ones. Patient negotiations are the best, don’t peak the negotiation to early.

 

The best way to implement (think) 80/20 is to start acting 80/20. Immerse yourself in top 20% of your activities, make the most of them. Use the resources you have – talent, money, business allies; that’s what you’ve got. Manage resources effectively – keep people and money continually working on 20% activities. Prune the other 80% activities.

 

The objective of Koch’s book is help you make sharp improvements in your business. The right action requires unusual insight. The top 10 highest value uses of your time are as follows:

1. Things that advance your overall purpose (do you know what that is?)
2. Things you’ve have always wanted to do
3. Things in the 80/20 time relationship
4. Innovative ways of doing things
5. Things others tell you can’t be done
6. Things people have done successfully in other areas
7. Things that use your creativity
8. Things you can’t get other to do for you
9. Anything with people who sharpen your character –using time eccentrically and effectively
10. Things for which is now or never

The Golden Rules of career success from Koch are:

1. Specialize in a very small niche, develop a core skill. Be the best in that niche
2. Choose a niche you enjoy, where you can excel and stand a chance of becoming a acknowledged leader
3. Realize that knowledge is power
4. Identify your market and your core customers and serve them better than anyone else
5. Identify where your 20% gives 80% of returns
6. Learn from the best
7. Employ as many net value creators as possible
8. Outsource as much as possible
9. Leverage effectively

If you realize that knowledge is power, take action, read 20% of the book here: 80/20 Richard Koch