Think about it for a moment; you use 80% of your carpet 20% or the time and 20%, 80% of the time.
You wear 80% of your clothes 20% of the time and 20% of your clothes 80% of the time.
This same princliple applies to everything in life. Our health, fitness, happiness, effectiveness, communication, ev-ery-thing…
There are quite a few books out there on the subject and Perry’s is one of the better.
Now this isn’t an exact figure, but it’s a pretty damn good guide and in a moment I’m going to show you a simple method that I learnt in a high level mastermind recently, that will revolutionise your profitability in business.
First I want to reiterate that truly understanding this as a business owner could be the difference between, being successful and being wildly wealthy beyond imagination. You see the only thing that we really have a finite amount of is time…
It doesn’t matter how hard we work, how much we charge, how many hours we put in, we cannot escape the fact we have 24 hours in the day or the fact that we will ultimately end up 6 feet under some day.
So beyond popular belief Money is not the ultimate end goal. Money is only the vehicle to get to our end goal.
There is even an old fable that goes something like this;
“There was once a businessman who was sitting by the beach in a small Brazilian village. As he sat, he saw a Brazilian fisherman rowing a small boat towards the shore having caught quite a few big fish.
The businessman was impressed and asked the fisherman, “How long does it take you to catch so many fish?” The fisherman replied, “Oh, just a short while.”
“Then why don’t you stay longer at sea and catch even more?” The businessman was astonished.
“This is enough to feed my whole family,” the fisherman said.
The businessman then asked, “So, what do you do for the rest of the day?”
The fisherman replied, “Well, I usually wake up early in the morning, go out to sea and catch a few fish, then go back and play with my kids. In the afternoon, I take a nap with my wife, and evening comes, I join my buddies in the village for a drink — we play guitar, sing and dance throughout the night.”
The businessman offered a suggestion to the fisherman. “I am a PhD in business management. I could help you to become a more successful person. From now on, you should spend more time at sea and try to catch as many fish as possible. When you have saved enough money, you could buy a bigger boat and catch even more fish. Soon you will be able to afford to buy more boats, set up your own company, your own production plant for canned food and distribution network. By then, you will have moved out of this village and to Sao Paulo, where you can set up HQ to manage your other branches.”
The fisherman continues, “And after that?”
The businessman laughs heartily, “After that, you can live like a king in your own house, and when the time is right, you can go public and float your shares in the Stock Exchange, and you will be rich.”
The fisherman asks, “And after that?”
The businessman says, “After that, you can finally retire, you can move to a house by the fishing village, wake up early in the morning, catch a few fish, then return home to play with kids, have a nice afternoon nap with your wife, and when evening comes, you can join your buddies for a drink, play the guitar, sing and dance throughout the night!”
The fisherman was puzzled, “Isn’t that what I am doing now?”’.
You see it’s not money we are all really after its time. The more time we have the more money, love, happiness and anything else we want, we can make.
So what’s the secret to more time you eagerly ask…
As a business owner I believe its training and delegation. Sounds bloody boring doesn’t it?
Yeah but stick with me for a minute because you might be surprised at the effect this will have on your business and quality of life.
“Yeah BUT no one can do it as well as I can” As business owners we are all guilty of saying this at some time in our careers and we are usually right, except…
This can be one of the biggest killers of being effective with our time and living the life we want. Think about it, if you are so attached to the fact that everything has to be perfect and only you can do it, you will never reach all of your goals in business because you will always be the bottleneck.
So the first thing to invest more time (I know it seems counter intuitive) in is in training staff to be and more importantly “think” like you.
This is laying the foundation for the next step.
Now I’m not going to give a university lecture about delegation as I’m sure you have heard many similar material over the years and understand that; if you can get someone else to do it then you now have free time to spend on higher leveraged things. Like golf 😀
So how do you combine the Pareto principle and delegation to ensure that the work others do is as perfect as yours?
By using the 10/80/10 method.
A simple method by where you do 10% of the most important work and then drop it down to the next most capable person (that you have trained ;)), they then do the most important 10% and pass down to the next most capable person of a lower hourly rate and so on.
Usually at the end of a project, job, whatever you are doing there is going to be the important task of quality control, so as you can see it gets passed back up the chain only where input at each level is vital.
Now I know the math’s is not going to be exactly 10% at each step before someone writes in to tell me that I have go it wrong. This is merely to demonstrate the method.
Now you can drop the task as many levels as you want and each level doesn’t have to be exactly 10%, it could be less, but you get the picture right?
Instead of you (the highest value person) or your next highest value person putting in 100% of the effort you are now only putting in 20% each and the brunt of the work is being done at a much lower hourly rate.
Whether you charge at the same high hourly rate or offer your clients a discount is up to you, but understanding this simple method can relieve you literally hundreds or thousands of hours over your career that you could spend fishing.