Most of you have heard about the Pareto Principle or as it is most commonly referred to as the 80/20 rule. The 80/20 rule states that 80 percent of your time or effort is spent on the tasks that only generate 20 percent of the return. This has been proven to be true in nature, finance, and most of my daily life occurrences. I fight against this principle every day and most of the time I feel like I am losing the battle.
As I sit here thinking about what I have accomplished this week, I ask myself, “How could I have been more productive and generated a better return for my employees, customers, and business?” I talk a lot about focus, and I believe as many of you do that having a clearly defined purpose is imperative to achieving happiness and ultimately success. As a small business owner, I find it hard to remain focused on our purpose and not deviate from that path.
When a customer asks me if I am interested in a piece of business my gut reaction is to say yes without first asking myself if this opportunity is on purpose for what we do and who we aspire to become.
For most small businesses it’s hard to turn down opportunities when you are constantly chasing margin, but the reality is that there is an opportunity cost associated with every decision. Before you quickly answer the question “YES WE DO THAT” you need to ask yourself, can we deliver a great product at a fair price, can we offer something of real value to our customer and is this opportunity on purpose for who we want to be as an organization.
This is a tough choice for all entrepreneurs. The reality is that you have to stay focused on your purpose or someone else will.
To learn more about the 80/20 rule from one of the smartest guys on the planet, check out this video from Tim Ferriss.