80% of your profits come from 20% of your customers…
I was tagged into a post about some advice I’d shared with someone:
“I’m flat out, but the best piece of advice I was given is from Martin about air traffic control at London Heathrow Airport and how they cope with thousands of planes a day. They land one plane at a time. Works every time.” – Kate
A key challenge in ANY business as it grows, and scales is to avoid getting bogged down in the detail.
We use the 80/20 Principle by Richard Koch: roughly 80% of the effects come from 20% of the causes. For example:
- 80% of your accomplishments will come from 20% of your task list…
- 80% of your profits will come from 20% of your customers…
- 80% of complaints you receive will come from 20% of your customers…
- 80% of your sales will come from 20% of your products and made by 20% of your sales staff…
- 20% of your marketing efforts represent 80% of the results…
BUT most businesses try to land too much; the key is to land one plane at a time. Heathrow is the world’s busiest airport with just two runways!
You have access to massive improvements in your profitability by focusing on the most effective areas and eliminating, ignoring, automating, delegating, or retraining the rest.
BUT there’s a tendency to solve the immediate problems facing you or your team.
The problem will only be solved forever if something else is ‘fixed’.
It’s key to identify the 20% of things that are causing the 80% of issues, as by solving this you’ll be solving A LOT of issues!
Worth taking a step back and focusing on this week ….
BW,
Martin
PS here’s how we helped a business owner just like you, improve his productivity…
“Martin’s tools and tips have helped increase productivity in my business by more than 50%. We’ve moved from ‘firefighting’ into a position where I have been able to grow my business thanks to a focused goal, new services, and of course, increases in efficiencies.” – Keith
Martin Norbury
Investor | Business Mentor at Advocate | Author of I don’t work Fridays
Image source: https://pixabay.com/users/thepixelman-406384/