Applying The Pareto Principle To Your Business (80/20 Rule)

When people start a business, they think the more they work, the more money they can make but that’s not always the case.


Imagine being able to work fewer hours and earn more money. How would you spend that time? What would you be doing and who would you spend it with?


Today, I’m going to share with you one of the most impactful principles I’ve applied to my life and business and it’s known as the Pareto Principle (AKA the 80/20 Rule).


You Will Learn:

  • What the Pareto Principle is
  • Specific examples for business 
  • How to apply the 80/20 Rule to your business


Let’s dive in!


What is Pareto’s Principle (80/20 Rule)?


In the early 1900s, Italian economist, Vilfredo Pareto, found that 80% of the wealth in Italy was owned by 20% of the population.


Even more than that, Pareto noticed this same uneven distribution scattered throughout life.


  • 80% of your outfits come from 20% of the same clothes
  • 80% of screen time is spent on 20% of your apps
  • 80% of sleep quality comes from 20% of sleep


You get the idea. In short, 80% of results come from 20% of your efforts.


But how does that relate to growing your business?


Examples of Pareto’s Principle in Business


When it comes to applying Pareto’s Principle to your business, here are some more specific examples:


  • 80% of your profits come from 20% of your clients
  • 80% of customer complaints come from 20% of your customers
  • 80% of sales come from 20% of your products


As you can see, not all of your efforts in growing your business produce the same results. Business building is a journey. It takes time, experimentation, and learning from mistakes.


Chances are, you want to make more money in your business and potentially work fewer hours at the same time. Pareto’s principle can help you achieve that, so long as you know how to apply it.


So how can we apply this principle to our business and really get the most out of our time and effort?


Applying The Pareto Principle To Your Business


To really get the most out of this principle, we need to get in the habit of identifying the 20% and the 80% then double down on what’s working.


Pareto’s principle is more art and intuition than science, though you can see it in the data.


For example, if you have multiple digital products and notice that only one of them is bringing in the bulk of your revenue, double down on promoting that product.


If you have multiple lead magnets and only one of them is getting the most opt-ins, double down on promoting it through your website and social channels.


Another great way to distinguish the 20% from the 80% is to ask the Focusing Question. This comes from Gary Keller's book, “The ONE Thing”.


Here’s the Focusing Question:


“What is the ONE thing I can do that, by doing it, will make everything else easier or unnecessary?”


Asking this question helps you pinpoint the ONE task that would make the biggest impact in your life/business right now.


You’re not focusing on 2, 3, or 5 things. ONE thing that would work like the first domino and make everything else easier or totally unnecessary.


Take a minute out to ask yourself the Focusing Question and write down your answer.


Next, regularly check what has worked and what hasn’t in your business. You can do this every week, month, or year. Whichever works best for you. 


Daily is a little excessive in my opinion because that’s not much time to collect data.


"What Do I Do With The Remaining 80%?"


Once you’ve gotten in a habit of identifying the 20% of actions that produce 80% of your results, you really have 3 options for the old tasks: 


  • Automate
  • Delegate
  • Eliminate


First, focus on eliminating. I like to eliminate as many useless tasks as I can so I’m only putting my time into things that really move the needle.


For example, I once had a suite of 5 online courses, but only one of them was actually selling. It was by far the best course and encompassed all of the other ones. 


I decided to eliminate the courses and delete them (personal decision). It made my life easier and I was able to focus my efforts on selling the better course.


If you can’t eliminate the task or thing, then try and automate it. Most things can be automated nowadays using a tool like Zapier or if you’re building a knowledge business as I teach, Kajabi has a ton of automation features you can use to grow your business.


Automating tasks allows you to not have to hire employees, which will keep costs down in your business. But not everything can be automated, like video editing.


That’s when we delegate.


If a task in your business can’t be eliminated, or automated, and is not the best use of your time, delegate it.


Either hire an assistant to do it for you or check out a website like Fiverr.com, Upwork.com, or PeoplePerHour.com


There, you will find plenty of people willing to do it for you.




The Pareto Principle (80/20 Rule) is an outstanding mindset to develop as a business owner.


You need to be able to distinguish what is worth your time and effort when growing a business and that’s what this principle allows us to do.


After reading this article, you have tangible examples of how this principle works in the world of business, you know how to find the 20% of efforts that produce 80% of results, and you know what to do with the remaining 80%.


Now it’s time to apply what you’ve learned to your business and start seeing the benefits yourself.


Take what you learned here, use it, and start working less today!

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