The Secrets to Success by Achieving More with LessJul 25, 2018
Welcome to this video. This week, we are going to talk about a book called The 80/20 Principle by Richard Koch and the subtitle is The Secrets to Success by Achieving More with Less. And I can remember when I first learned about the 80/20 rule, also called the Law of Pareto, when I was in high school way back then and my teacher taught me in school. In economics class. The Italian mathematician, Alfredo Pareto figured out that 80% of the profits came from 20% of the customers. Also, from 20% of the articles that people were selling and also that the 80/20 principle is also applying to nature.
And I've studied it a little bit more and a few years ago, I found this book, The 80/20 Principle, and I started using the principles in my business. So, I asked myself and you may ask yourself also what 20% of effort can I take that gets me 80% of my results. Or what are the 20% of my customers who bring me 80% of my sales and profits? And when you look at that from an economic standpoint, then you can make business decisions. And not all customers are equal. They are equal as persons, of course, but since I'm in business and since you're probably also in business, then our goal in business is to make money.
And if we do not make enough money, we are not having enough money to make a living and we need to start working on a job for someone else. Most of us don't want to do that. For myself, I made a decision a long, long time ago that I want to work for my clients and not for a boss. So, I started using the information about The 80/20 Principle and I read Richard Koch's book and I started applying it and with good results.
It meant that I'm very critical who I worked with and what I do. And the whole purpose also of my business is to find the 20% of clientele who can bring me 80% of my gross sales. But it's not about me. It's about my client, right? So, I need to add value to my client and how much value can I add to my client that my client sees me adding more value and is going to pay me. I just spoke about that in last week's video of not pissing off your clients and adding more value than you ask in return.
But I also have to be honest with you that a lot of my clients are very good clients, of course, but they are the 80% clients that bring me 20% of my gross sales. And that's fine too, right, because this 80 % of my clients can bring me one or more new clients who fit in the other category, so who can be huge clients, big clients. And I do a lot of work for a small number of clients and I do all the work with websites, internet marketing, social media, what they allow me to do with a very small team of business partners.
I would invite you to do exactly the same thing. Look at your business and maybe the 80/20 principle can apply to you too. And also, I want to read a little excerpt from the book which is on page 194 and it's all about the 10 golden rules for career success. Richard Koch says number one, "Specialize at a very small niche and develop a core skill." What you might do is do the same what I do. I've developed my core niche which is internet marketing, social media websites, web, and small IT services for small companies and help them with the services and be their number one person to go to.
You might do the same thing with your business. Another thing is number seven: become self-employed early in your career at best. Self-employment is also a point of the 10 golden rules for career success based on the 80/20 rule. You have a choice either to work for a boss and I did that early in my career but it didn't work out for me so I decided in 1994 that it would be better for me to start my own business, and I'm a business owner since then.
You may be in the fork of the road in your career too and maybe you are wondering if this whole thing about internet marketing and social media might be something for you too. I have a program in helping people like you set up their own consulting agency and help local companies with internet marketing with social media and with web.
Let's finish this week's session with a reference to the 80/20 book. I highly recommend it. You can buy it from Amazon.com or Bol.com if you're in the Netherlands.
Have a great week and talk to you next week.
Bye for now.