Pareto Principle for entrepreneurs

Written by on 12th March 2019

Pareto Principle plays a key role in your business growth. The Pareto principle states: “With only 20% of the work 80% of the results are achieved. That’s why you should just leave 80% of the workout – and do more of what actually contributes to success! “The 80/20 rule promises a significant acceleration in productivity. Today, the Pareto distribution simply describes the phenomenon that a small number of things have a big impact, while many other things are less effective or efficient. Those who strictly follow the 80/20 rule in their business can save a ton of resources in terms of time and energy, as well as tears and blood.

When it comes to time management and productivity, there are several strategies, rules, and principles. One of them is 80-20 Rule Based on the observation that only 20% of all customers account for 80% of revenue in business, this rule also works fine on time management also, after 20% of the time spent solving a problem, the problem is solved 80%. So, first of all, it seems useful to get rid of 80% of our customers and activities to become more effective. But it is not that easy, because this 80 % is not always avoidable and dispensable. We cannot just neglect customers, even if they are currently making little sales; but it means to invest your majority of time in customers and activities which produces the maximum output.

Set priorities:

In time management, the Pareto principle can help to improve one’s time/performance ratio. It makes us plan and prioritizes our goals and desired output. It helps us to calculate and analyze the effort and resource. One of the major advantages is it helps us to postpone things which are not essential or trivial. The following tips help you to manage time efficiently.

  • Recognize what activities are among the 20% that bring the most success.
  • Always complete these 20% activities first.
  • Recognize which activities are unnecessary.
  • Hold back the trivial or less important activities for later.
  • Outsource
  • Invest the extra time you gain by focusing on the really important things in life.

In your company, the Pareto principle can not only be applied in time management but can also be useful in other areas like;

Employee planning and leadership:

How do I use my human resources most effectively? Which tasks do I delegate? Who are my service providers? How can I help my employees to work more effectively?


Which customers are my top priority and how to maintain them? For which customers need my maximum effort?


Which products should be the focus of my marketing and sales activities?

Strategic planning:

You must have a clear strategy and planning in your business. Consider all the pros and cons of applying the Pareto principle in your business. How much harm can be done if I consistently follow the 80:20 rule in certain divisions and neglect less effective areas?


Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.


View cart

%d bloggers like this: