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How To Apply The 80/20 Rule To Your Business & Life

How To Apply The 80/20 Rule To Your Business & Life


Most likely you’ve heard of the 80/20 rule in your life.  It’s commonly referenced and quoted in both casual and business conversation, but oftentimes people don’t really grasp what it is, how it relates to your business or life, or how to apply it.

So what is it…?

The 80/20 rule roughly means that about 80% of the impacts or effects generated from only 20% of the causes.  A thorough amount of research has been provided on this theory and points towards truth in the statement.

Where Did 80/20 Rule Come From?

Before we dive into the nitty-gritty ways to apply this theory to your life, it may be best to understand more about the background.  Where did this rule come from?

This rule is also called the Pareto Principle because an Italian economist Vilfredo Pareto first suggested the 80/20 correlation.  Pareto came to this conclusion in the late 19th century after observing that 80% of his nation’s land was owned by 20% of the population. As he continued his study to other countries, similar results were found.  Ever since, research of this percentile theory has been applied to a variety of topics with an ever-increasing interest in its application to life, business, government policies, etc…

Examples of 80/20

As this theory has stretched to other topics, countless examples of this 80/20 rule can be found in life and business.

For example:

  1. 80% of sales come from 20% of clients
  2. 80% of results come from 20% team-members or employees
  3. 80% of social media or content traffic comes from 20% of the posts
  4. 80% of failures come from 20% of tasks
  5. 80% of industry profits made from 20% of the businesses
  6. 80% of the team’s failures come from 20% of the team-members
  7. 80% of sadness in your life comes from 20% of the people
  8. 80% of fitness gain from 20% of your workouts
  9. 80% of sales from 20% of products

This rule can be applied to an infinite amount of possibilities. However, the takeaway is generally the same. That a large percentage of your success or happiness or improvements are coming from a small percent of actions.  Or on the other hand, that a small amount of problems is generating a large percentage of failures, unhappiness, or difficulties.

This doesn’t just occur in sales numbers or clients but also can be applied to more general principles as in 20% of drivers cause 80% of car crashes. For this reason, you can have fun thinking about ways this may personally apply to your own life or business.

How Does the 80/20 Rule Apply to Your Life & Business?

As seen in the few provided examples, this 80/20 rule can apply to your business operations and life altogether.  Whether the exact percentages of the results for each of these topics are exactly broken out in 80/20 – you will still find that many of your successes (in business or life) are only due to 20% of efforts, and vice versa for failures as previously explicated.  However, understanding this and its correlation is just one step.  The next step is to use this knowledge and data as leverage to limit failures or downfalls and increase positive results.  Companies or businesses that are able to truly dive into what is creating their successes or failures have an incredible power to drive their business.  Awareness of the 80/20 rule unlocks potential for not only business but also holistically to personal life.

So How Do You Apply The 80/20 Rule To Life & Business?

It all starts with the question

Would you like to know what is driving sales? What is wasting money? What is making you unhappy? What is improving your physical fitness?

Figure out what it is you are curious about and dive into it.

Get data

If you already have data in your pocket, such as from sales data, marketing stats, budgeting, and so on – this part is easy! Just dive into that data and see for yourself what is it that it is driving sales, draining money, driving web traffic, or whatever your curiosity may be. You know the result you are looking for (sales in this example), but now its time to find the cause (clients).

However, what if you don’t have data? Well, this rule is a good reason to start gathering data.  How can you know what clients are buying from you the most if you aren’t tracking? Or how can you know what marketing tactics are working if you aren’t pulling any data? For this reason, it is highly beneficial to transfer all business activity to digital platforms to really be able to see the data behind it all.

And if you are curious about a looser situation, aside from business stats? For example, something without data backing could be…the mentioned question of what is causing unhappiness.  Well, for these cases no true data is out there, but you can do your best to really reflect on your personal life and set aside time to dive into what may be the root cause of this impact you are feeling.  After some time to yourself with little distractions, you’ll be surprised at the “data” you can gather about your personal life…with our always-on digital world, it is important to take these breaks and self-reflection.

Invest in What Is Working

If you have found the 20% of content that is causing your traffic or the product that is generating 20% of sales…really think about the similarities between this 20%.  What do these things have in common?  It’s telling you what your consumers like!

If you find that 20% of your web traffic is from video content – post more videos.  20% of people are buying the “premium package,” put marketing behind this package, or tweak the sales price, or offer exclusive deals.  The 80/20 rule tells you that even putting money investment behind these key elements will only increase your results. Or maybe that other 60% that isn’t driving results can be less focused on to turn more attention to what’s working.

Or more personally, really focus more on that 20% of workouts that are helping grow muscle or the 20% of friendships that are making you happy.  Now that you know what is worth spending time and money on, move forward with more pep in your step behind these activities and watch the results shine!

Cut Out What Isn’t Working

If you are studying a case of what 20% of tasks are you failing at or what 20% of things are making you unhappy, etc…

You can either completely cut these things out of your life and business entirely or really focus on improving them to cut these down. It’s not always the best case to just drop a certain task or team member or workout, but sometimes cutting the issue at the source can help if you find it the best solution.  However, more often than not the 80/20 rule serves as a reason to invest in teaching these failing team members or putting the time in yourself to learn how to do that task that is wasting time more efficiently.

Keep Recycling This Tactic

Once you apply the 80/20 rule once to your life and business, you will want to keep applying it.  The results truly can be amazing.  Once you have found your system for tackling this theory, keep finding ways to apply it to your life and watch your personal life or business relish in the new booming successes

Why is the 80/20 Rule Successful

Aside from hefty scientific research that points to its validity, the general takeaway of the theory undoubtedly holds true.  Invest in the 20% that is working for you or head-on face the 20% that is driving poor results.  Once you find the root of your successes or any downfalls, the doors are open to the countless opportunities you have to grow your business and personal self.

Getting Started

Check out this list of fitness careers that let you follow your dreams which includes what it takes to start a career in personal fitness training. This is your most affordable and fastest way to become a highly qualified personal trainer.

Is your re-certification coming up? Learn more about earning your CEU credits. You can find the full list of CEU courses here.

If you are ready to start your online personal training or coaching business, don’t forget to learn more about our online coaching course.

One of the most popular and fastest ways to get started working with clients while you travel is to coach/train online. You will want to learn more about GymGo. GymGo lets you work with clients and make money in different ways: online, live-streaming virtual training & on-demand training. Use our link to get yourself a free 14-day trial >>> http://www.gymgo.com/nesta

Remember, NESTA and Spencer Institute coaching programs are open to anyone with a desire to learn and help others. There are no prerequisites!

That’s it for now. Take action!

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