Engage the Pareto Principle: To Multiply Your Revenue by 16 Times!


Wow, that sure sounds great, but can it become a reality for my company and me? You bet, as long as every day we engage in activities that produce great returns on our invested time. The same can be said for not making productive use of our time. When the Pareto Principle is applied correctly, the net results on the time invested are 16 times more productive. Let me walk you through this simple process to show you how you can increase your productivity. First, let’s take a look at where this principle got started.

Italian economist Vilfredo Pareto created a mathematical formula in 1906 to explain the unequal distribution of wealth in his country. He believed that 20 percent of the people controlled 80 percent of the wealth. As his theory became more accepted and was applied to explain other daily events, it became known as the Pareto Principle – Pareto’s Law or the 80/20 rule.

Think about how this principle applies to aspects of your daily life. Would you believe that you wear 20 percent of your clothing 80 percent of the time? Or that 80 percent of your e-mails go to 20 percent of the people in your address book? Did you know that 80 percent of America’s food is grown by 20 percent of its farmers?

Do you realize that 20 percent of your clients generate 80 percent of your company’s revenue? 

Learn how to engage this principle in your marketing and advertising activity to maximize revenue. Let me show you an example of how you can increase your company’s revenue 16-fold. Let’s say you need to accomplish 10 activities in a week to earn $1,000. We know from Pareto’s Principle that 20 percent (two activities out of the 10) will generate 80 percent of your weekly income, or $800. Conversely, 80 percent of your activities will only generate 20 percent of your income.  

Activity Weekly Income Generated Goal: $1,000 per Week
1 $25 Eliminate or Outsource
2 $25 Eliminate or Outsource
3 $25 Eliminate or Outsource
4 $400 Priority Activity
5 $25 Eliminate or Outsource
6 $25 Eliminate or Outsource
7 $400 Priority Activity
8 $25 Eliminate or Outsource
9 $25 Eliminate or Outsource
10 $25 Eliminate or Outsource

If you have two activities worth $400 each and eight worth $25 each, focus on those that produce the highest income. Forget the $25 activities and focus on the big ones. When you double your time spent on the $400 activities, you can triple or even quadruple your income. Find out which of your activities are giving you diminished returns. It does not serve you well to allocate the same amount of time to all of them. If you must complete those lesser income-producing tasks, outsource, barter, hire or partner with people who can do them for you.

Find your highest income-producing activity.

Marketing and selling products better than your competition leads directly to success and greater income. You can attract more customers and expand relationships with current customers when you employ proven marketing principles and put the correct systems in place. You or someone in your company must be savvy about effective marketing techniques and how to engage the Pareto Principle to multiply your income potential. If this is not your area of expertise, bring in a marketing consultant who can get you on track toward multiplying your revenue.

Your challenge is to do more of what you do well (activities that generate greater income) and less of what does not earn the revenue you desire. When you focus on what you do best, you will be more productive, feel more accomplished and generate more revenue – even 16 times more.