Print by Matt Jones
I think we can all agree that we want to get the biggest bang for our buck when we’re working on our businesses–when we’re working on anything, for that matter.
If you have even a drop of Puritan blood in you, you’ll probably agree that there is something about productivity that feels divine. And I do believe it is. Our industriousness can absolutely be an expression of God, of our soul, and certainly, of our purpose.
The Value of Making Stuff
“Making stuff” and “making stuff happen” are both high on my priority list. I used to beat myself up for being so obsessed with productivity. Now, I embrace my desire to fill the nooks and crannies of my days with creation because it’s part of my contribution to the world.
But there’s a difference between the doing that’s just doing stuff and the doing that creates results. There are certain times when just doing stuff is incredibly valuable, like showing up on your mat for your yoga practice, taking a walk in nature, playing with your kids, or sitting still and breathing.
(Let’s be honest, though: Do we ever really do anything without desiring some kind of outcome, even if it’s simply peace of mind? I don’t believe we do. And I don’t think that makes us any less spiritual. It’s called being human.)
As someone who enjoys the actual experience of being in action, I have wasted a lot of time doing things that haven’t produced results. I’ve gotten caught up in the excitement of planning events that don’t add to my bottom line, of networking with people who aren’t really great customers or potential business partners, and carrying out marketing plans that don’t put money in the bank.
Can you relate?
The Rule That Changed Everything
I first read Tim Ferris’s book The 4-Hour Work-Week with my friend Raina. We were fresh out of college and the idea of working smarter, not harder, and deliberately designing our lives was salve to our idealistic souls.
Tim’s book was the first place I read about the 80/20 rule in business. Listen up for this one because it is a GAME CHANGER!
The 80/20 rule says that 80% of our actions in business bring in 20% of our results and that, more importantly:
20% of our actions bring in 80% of our results!!!
Following this brilliantly refreshing and freeing paradigm, then:
- 20% of your customers/clients bring in 80% of your revenue
- 20% of your marketing efforts bring in 80% of the new business you attract
- 20% of your daily activities produce 80% of your success (if you measure it in dollars, new customers, new accounts, business growth, and other quantifiable metrics)
Woah, Nelly! This one really excites me because here’s what it really means for you and me:
If we identify the 20% of our activities that are producing 80% of our results, we can free up time, energy, and resources to be hundreds of times more effective.
Just being aware of the 80/20 rule won’t make a lick of difference in your business. It’s what you DO with it that counts.
So here are 6 simple steps for you to take to implement this in your business (and life in general) immediately:
1. Start tracking your time.
Set a reminder to go off automatically every hour using your phone alarm. When it goes off, write down what you were doing for the last hour. Do this for a week to get a good snapshot of how you’re spending your time.
2. Add it up.
At the end of the week, go back and look at how you spent your time. Add up the hours spent doing your various activities: writing copy, spending time on the phone with clients, doing presentations, meeting girlfriends for coffee, mindlessly surfing the internet, etc. No judgement here–this is just information.
3. Look at your income from the past month and ask yourself:
- What were the sources of my income? (e.g,. group coaching, individual programs, online product sales, speaking fees, consulting income, etc.)
- What percentage of my total income came from each source?
4. Look at new business that came in over the past month and ask yourself:
- Where did this new business come from? If it was from your website, use Google Analytics to figure out where the traffic is coming from. This is a free tool that will rock your world.
- How did these new clients/customers find me?
- What activities did I do in order for these new clients/customers to find me? (e.g., in-person networking, joint venture partnerships, guest blogging, speaking, referrals, events, etc.)
5. Quick analysis.
Analyze your income from step 3 combined with your new business from step 4. Without needing to create complicated financial models or even open Excel, you should be able to get a pretty good feel for where the 80% of revenue is coming from and which 20% of your activities created it. It probably won’t be the exact ratio, but you’ll find it’s in the ballpark of 80/20.
6. Putting it all together.
Lastly, look at your time tracking from step 1 and ask yourself:
- How can I more effectively align my actions with the activities that have proven to bring in 80% of my revenue/results/new business?
- What activities will I stop doing because they are not producing results? (This step alone is incredibly freeing.)
Pretty cool, eh?
If we spend our time wisely, we have more of this precious asset to spend on the things that make our hearts go pitter-patter and our souls sing.
This concept is not meant to make you into a human sphincter around your business and your time. No, my dear. Not at all.
Effectively implementing the 80/20 rule gives you the freedom to be more of you more of the time. (Click to Tweet.)
Don’t forget to check out the free webinar replay to dive deeper into this and 6 other simple, doable strategies to help you make a profit and a difference. There’s a $200 present in there for you that’s only good until 12pm EST today, Thursday, February 28th. The webinar will be up until Monday, March 4th at 3pm EST.
Click here for the webinar replay.
And please leave a comment to let me know:
- What was your biggest takeaway from this post?
- What actions are you going to start doing more of to get more bang for your buck?
- What actions are you going to start doing less of or eliminate altogether because you’ve realized they don’t produce results?