I talk about the 0/20 rule so much in my articles that it is time to write a detailed introduction to this concept. This rule is vital for every business man (anyone, if you look at it). Therefore, if you have not heard about this rule before, I suggest you read this article carefully. Because what you will read here can change your life.
The 80/20 rule sounds like a statistical issue at first, in a way it is. I usually try to avoid complex numbers and act with more emotions, ideas and concepts. The nice thing about the 80/20 rule is that it doesn't require you to be an expert in statistics. Although it has a number of features that touch the economy and was proposed as a statistical analysis by a statistician named Pareto, this does not mean that the 80/20 rule can only be understood and used by economics professors.
See what Wikipedia says about this rule:
‘It was put forward by Joseph M. Juran, an important thinker in the field of management. It is named after the Italian economist Vilfredo Pareto, who observed that 20% of the people own 80% of the land. This rule is mainly based on the notion that many of the consequences in any given situation are due only to a very small number of causes. "
Although I cannot remember exactly when I first encountered the consequences of the 80/20 rule in my private life, I remember the first time it started to affect my life. I was at my local bookstore and bought from one of the shelves the book 'Living by the 80/20 Rule' written by Richard Koch. Koch chose the 80/20 rule and created his own series of books around this topic. Living with the '80/20 Rule' was a book just for me because the book basically shared the secrets of a productive life in which one can achieve maximum satisfaction by focusing on one's own passions (Koch has other books on business life and the 80/20 rule for managers. but none of this has impressed me as much as this book). At that time, I thought I wasn't working hard and accused myself of being lazy, but I realized that the life I lived was based on the 80/20 rule. Probably if I was working harder, I couldn't be more productive than I was then.
What Exactly is the 80/20 Rule?
Speaking in numbers, the 80/20 rule basically means that only 20% of inputs yield 80% of results. As revealed by Pareto's research, this rate is mostly 80/20, but in some cases it can reach a much higher rate. In some cases, even saying 99/1 would be more appropriate.
At this point, it doesn't matter what numeric value you use. The important thing is to be able to understand that your happiness and the vast majority of what you experience (almost eighty percent) are the specific activities you do in your life, which account for twenty percent of your total activities.
If you take into account what I've said so far, you might expect me to tell you that 20% of your activities lead to 80% of your financial results, and it is. Your income-generating activities will likely not exceed the fingers of one hand. Of course, you can apply the 80/20 rule at many points in your work and work life, but your holistic happiness and life satisfaction are, in my opinion, more important variables to focus on.
Examples of the 80/20 Rule
Today, there are many economic conditions. One of them is the division of total wealth and resources on earth, at which point a small percentage of the total population gets the largest share from the pie and therefore it would not be wrong to say that it reflects the 80/20 rule. Apart from this, various examples can be given, such as only 20 percent of the employees in any company in the business world are responsible for 80 percent of the company's output or 20 percent of the customer segment creates 80 percent of the total revenue. These are not incomprehensible rules, of course not every company has to exhibit such a landscape and the ratio here may not be 80/20 in any case. But if you look at many of the key metrics in an industry, you can see that the minority creates the majority of results.
As the smallest scale, you can find many examples where you can look at your own daily life and apply the 80/20 rule. You probably do most of your daily conversations with just a certain number of people in your phone book. You spend most of your money on only a few specific expense channels such as rent, loan payment or nutrition. There are so many people you know, but you spend most of your day with just a few people every day.
In this article, I will try to show you how I apply the 80/20 rule to my own life, how I can increase my fear and satisfaction with life, and how I support my lifestyle.
The 80/20 rule in business life
Achieving 80/20 ratios in business life is a must for maximizing total performance. Identify the proportion (20 percent) of services or products that generate the majority of revenue and ignore those that are left with only marginal benefits. Spend your time working on parts of your business that we can develop with your core competencies, and let other people do the work outside of this 20 percent. Make sure you put the most effort on those that will create the most value for you. Reward your successful employees and recognize that others are not essential. Focus on improving your services and products and creating new sales techniques for your customers that generate the bulk of your income, rather than your low-income customers.
Transforming the 80/20 Rule into a Lifestyle
As you start analyzing your life and breaking it down into smaller pieces, you will witness that the 80/20 rule is the dominant principle at many points. The key here is that once you identify the dominant determinant of your happiness, you can make sure everything works in harmony with each other and avoid spending time on activities that make up 80 percent of your total activities, even though they give you less satisfaction.
What I'm trying to say is very simple, focus on the activities that bring the best results for you. Do this both in your business and private life. The biggest problem for many people is that they don't know exactly how to build their lives on the things they love. Now let's focus on that a little bit.
There is such a human profile in the perception of society: The person who does his best to be discovered, who will have to endure long and horrible working hours at work every day until his luck returns, and who is finally discovered and becomes a famous name. Do not be surprised if I go down such a road and finally say that the proportion of such people who are really famous is also governed by the 80/20 rule. Because only a very small percentage of these people achieve a celebrity end.
The same can be said for entrepreneurs. What percentage of you who are reading this article are probably working in a job they do not like at all, while still imagining that you are still building your dream job after long working hours?
The truth is that This is a very sad fact, many people on earth do not like what they do and can only live with their passions on weekends and outside office hours. Few people have the chance to spend all their time with their passions and favorite jobs, around the clock. If you want to be one of these lucky people, there are some things you should do beforehand:
Focus on Your Passions, Not Your Financial Assets
The simplest thing here is to accept the fact that not everyone can be famous. Of course, not everyone reading this article will be able to build a million dollar business. But I am not telling you to give up your goals, because I work on my own goals every day. Today you can work smarter to experience greater satisfaction, and that's what we call the 80/20 rule. The more you can apply this rule, the more likely you are to become one of those famous people and entrepreneurs we've mentioned, because thanks to the rule, you will start spending much more time on your competent businesses.
The first thing you have to do at this point, which is the hardest part of this job, is to determine what you are passionate about. Some can easily answer this question: "I want to be a famous pianist / singer / poet / writer", "I want to start my own real estate company / coffee shop / advertising agency". Others have a more general answer. They say "I don't want to have a job to go back and forth every day" or "I want to start my own business" but they do not have a specific job description yet. If you do not yet know what your passion is about, I suggest you test yourself first. It's always easier to know what you don't like, so you can try to keep doing this until you find what you like.
Outputs and Inputs
I need to draw attention to the issue of inputs and outputs right before I go into Lafa. Many people are ideal consumers by nature, in other words, we are all resourceful beings in incorporating input into our lives. Everyone can list the things they enjoy doing in their life, one after the other: eating at pleasant restaurants, eating junk food, reading books and magazines, joining party and dance clubs, watching movies, listening to music, meeting new people, surfing the internet, sports and shopping . All of these activities are inputs to our lives, which means we consume other people's output.
You may consider your activities that you are passionate about, but if all you do is consuming, it may not be possible to create a sustainable passion. If you intend to include the 80/20 rule in your life, you need to position the activities that turn into passion for you in a certain place in your life because with these passions, you will be producing new outcomes that others can enjoy doing. Yes, you can earn money by watching movies, eating at a restaurant and reading books, but if you do this for a long time, it will not be satisfying for you, or you need to be able to do something in return. These will be your outputs, that is, the value you create.
If your intention is to create your own restaurant or a blog about your own food or create value as a cook, you can claim that you love to eat in nice restaurants and that your only passion is food. If you love to listen to music, you might also be happy to make your own music or write your thoughts about the music industry on your blog.
You can turn your passion into a sustainable source of income simply by creating value for other people that they enjoy. You've probably felt amazing when you passionately reveal things that have already helped others so many times already. But for now, if you don't know where to start and feel helpless because you don't know what you are passionate about, the first thing you need to do before you start applying the 80/20 rule is to be creative and turn the inputs you take into your life into valuable outputs. Remember, it will never be possible to be completely happy just by consuming it.
Before you start living the 80/20 rule: concentrate all your energy on the things you enjoy doing.
Part-time job - Part-time passion: Reduce the time you spend doing a job you don't like, devote much more time to your passions. At this point you might say that you cannot do this because you need money. Whereas I am somewhat doubtful that you really need as much money as you claim. While many people can make a living with a part-time job, they prefer to work more time jobs because they desire much more. Over time, desires transcend needs, one of the biggest dilemmas in the materialist world, profoundly influenced by modern marketing techniques.
I don't suggest you live like a hermit, of course, but I believe that true happiness can be achieved by doing what you love most to do, not by making more money. Sometimes it can be inconvenient to be dragged after the saying money calls money. However, when you pursue your passions, you can access a greater source of income because the value you create will be much greater. Therefore, spend your energy to increase your investment in your strengths and over time you will be rewarded for this.
Reduce your salaried job to three days a week and spend more time writing your novel faster, bringing your innovation to life, or coding your software idea. So increase the time you spend doing what you really want.More Business Posts: Business ideas