Pareto’s Principle is a fundamental business principle that holds true, irrespective of the nature of your business. Also known as the 80:20 rule, it is a simple, yet powerful approach to look at your business and more importantly focus on the issues that really matter.
So which one of these statements ring true for your business?
1. 80% of your business comes from 20% of your customers
2. 20% of your product or service range contributes 80% of your profit
3. 80% of customer complaints originate from 20% of the causes.
4. 20% of your individual effort and time achieves 80% of the desired results
5. 80% of your business productivity losses results from 20% of the causes
6. 20% of your staff is responsible for 80% of the business outputs and results.
7. 80% of the value in the business is generated by 20% of the processes
Look at your business long and hard and identify those vital few elements which are all that matter, everything else is hot air.