Fun With Pareto OR The 80/20 Rule

ParetoMost of you have probably heard of the pareto principle by now.  It’s the 80/20 rule where (according to wiki) for many events, roughly 80% of the effects come from 20% of the causes.

I want to apply this to my business life.  I am sure I waste a lot of time on things that don’t work.  Time’s a wasting and I want to focus on things that work.(to make me more money while continuing to have job satisfaction).  I want to do the important things and stop doing the things that have minimal impact.

When I worked in an office, I was a perfectionist.  I ran myself ragged chasing details.  I thought if I didn’t do things perfectly I would get fired.  I put in a lot of unpaid overtime to be a perfectionist.  It was completely self defeating.  It made me grumpy and since my social skills were kind of borderline anyway, it made me less pleasant to be around.

It wasn’t all my fault.  I bought into the Protestant Work Ethic idea that if I worked my ass off, I would be rewarded.  I have learned since then that it is more important to work at the RIGHT things and even more importantly it is important to be likeable.  Sad but true.

I am more likeable than I used to be now.  I have had 5 job offers in the 3 and a half years I have been “homeless”.  Part of the reason is, I am more relaxed.

In my main business (the one that keeps me in gas for the van and other necessities) it is true that approximately 20% of the clients I have met over the years have paid me 80% of my income.  These 20% are also the ones that from time to time, refer me to others.  If I can just stick with it, and keep cultivating this 20% I feel like maybe I will have something very worthwhile in  year or two.  I just have to stick with it!

Have any of you seen the Pareto Principle at work in YOUR life of business?  If so, please tell me more about it! (Ryu, does this work with strength training?)

About Maureen, Living in a Van

I'm a free-sleeper living in a van in the prettiest part of the world. I do this partly due to financial circumstances and partly because I love a good adventure.
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5 Responses to Fun With Pareto OR The 80/20 Rule

  1. Lynn says:

    Worked in corporate Canada for over 20 years in medical sales and the 3 most touted sayings were: Work smart, not hard! Keep it simple, stupid (KISS) and your above mentioned rule, 20% of your customers will provide 80% of your sales or income.

    • lucy says:

      YEP, but if U worked smart + hard perhaps ‘ the sky would be the limit ‘… I’m a believer of going the “extra mile at work”, like japanes people , to me ‘ work is an honor ‘ always do u’r best+.

      • Me says:

        I think working hard is deeply engrained in me so I agree about going the extra mile (like lots of Americans do). I just realize that there is only so much time and energy to go around so I have to make sure I’m not wasting t and e on pointless endeavors.

    • Me says:

      Did you find it to be true Lynn?

  2. Ryu says:

    It is true in all areas. Especially strength training.

    There may be 100,000 exercises. The number of effective exercises is maybe 15. It is a waste to spend time on the ineffective, just for variety’s sake.

    It is true in school as well. Only the basics matter. They are used all the time.

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