Here's a simple exercise to carry out on your business this week.
Take your total revenue from the past 12 months and sort it: biggest sales transactions down to the smallest sales.
Start adding up the biggest sales and see how many sale transactions it takes before you reach 80% of the total revenue figure for the 12 months.
I can pretty much guarantee you that 20% (or less) of your sales transactions will make up 80% (or more) of your total revenue for the year.
(I carry out this exercise repeatedly and it's almost always bang-on 🤓 )
Now, who are those customers/clients within your all important 20%...🍾 ?
Don't stop there...
- You can do an 80/20 analysis on the 20% (meta, I know 😉 )
- Do the same for product/service split.
- How about profit split?
- etc
The Pareto Principle ('80/20' rule) is one of the most powerful principles that applies pretty much anywhere and everywhere.
Unleash it to your advantage...🚀🚀🚀