01. The Italian Stallion Who Will Change Your Life
I want to introduce you to a very clever man, and my favourite Italian, his name is Vilfredo.
Signor Pareto was an economist who stumbled on what we now know as the ‘80/20 Principle’ also known as the ‘Law of the Vital Few’.
It was in 1897, the year the pencil sharpener was patented, Marcel Proust met Jean Lorrain in a pistol duel, and the first British Bus Service was opened, when Vilfredo was studying patterns of wealth and income in nineteenth-century England.
He found in the sample he was researching most income and wealth was owned by a minority of the people.
He also found two things that got his Italian juices flowing:
- There was a consistent mathematical relationship between the proportion of people and the amount of income or wealth they enjoyed. And the distribution of wealth across the population was predictably unbalanced.
- The pattern of imbalance was repeated consistently when he looked at the data across different time periods, or in different countries.
In other words there was always a small minority who had most of the money in any year and any country.
Sadly Vilfredo was a great economist but not very good at communicating his ideas, and not having the benefit of the internet or social media back then, it took a while for anyone to really use the 80/20 principle and explain the phenomena and the implications of it.
The thing is, the 80/20 Principle exists.
The 80/20 Principle in short, means in any system the majority of the effects come from a small number of causes.
Vilfredo found that 80% of the wealth was owned by just 20% of the people.
And funnily enough a century later this still holds true. But it’s not all about the distribution of wealth. The principle holds true in other areas of life:
- Just 20% of your carpets get 80% of the wear
- 80% of the people live in 20% of the towns
- 80% of the people die of just 20% of the most common causes
- 80% of the crime is caused but just 20% of the criminals
- On Facebook, you’ll do 80% of your interaction with just 20% of your friends
- In your wardrobe just 20% of your clothes will be worn 80% of the time
And so on…
The numbers don’t have to be 80 and 20, they can be 80/10, 99/1, and so on, but there is always a consistent pattern. And although it isn’t fair, you can’t change the numbers. You can only make choices about what you want to do in the face of these numbers.
If you took this single principle, and you invested all your time and energy into putting this into practice, your life and your business would be transformed beyond anything you ever imagined possible. All the rest would just be the cherries on top.
For you, as a salon owner, the relevance is about to become clear:
Take the 80/20 principle and apply it to your salon and I will guarantee you will find:
- 80% of your business comes from just 20% of your clients.
- 80% of your sales are of just 20% of your products or services.
- 80% of your profits come from sales of just 20% of your products and services (and they are not necessarily the same as the ones above).
- 80% of your marketing results come from just 20% of the marketing you do.
- 80% of your headaches, stress, and problems come from just 20% of your clients.
- 80% of your achievements come from just 20% of the time you spend working on them.
- 80% of your time is effectively wasted.
What does this tell you about your business? Well firstly that your most effective and profitable ‘things’ are 16 times as effective and profitable as your least effective things.
Here’s why: If you have 100 tasks of equal difficulty to do and 100 hours to do them then…
- 80/20 means you will do 80 of them in just 20 hours. That means you’re getting four tasks done every hour when you’re most productive.
- 80/20 also means you’ll do the remaining 20 of them in 80 hours. And you’re not taking four hours for each task.
In other words in the time it takes you to carry out your least productive tasks - four hours - you could have carried out 16 of your most productive tasks, because you can do four of those every hour.
Is the penny dropping? I hope so. The information I’ve just given you is so profound that it should change the way you do business forever. It should also change your life, giving you more insight into what is important and what is not and give you freedom. But only if you act on it.
The beauty of this idea is implementing it is free, you can do it straight away, and you will start seeing results straight away.
For example you could:
- Focus your efforts on the clients who are worth the most to you. If these are also your favourite clients it’s no big surprise and a bonus to boot. If they are not your favourite clients you need to change this so that you’re doing your most productive work with the people you like working with.
- Identify the tasks within your business that give you the best results and do more of them. Stuff that is not given you results should be delegated, relegated or just ignored. Your mantra should be Delegate, Outsource, Automate.
- Take the time you save by delegating etc and invest it on high priority tasks. A common mistake is to waste the time you save and treat it as ‘free time’. Don’t. Take that time and do more of the important stuff in it.
- Embrace the idea of ‘recursion’. Take your business as a whole and you will find 80/20 relationships all through it. Take the top 20% of something and you’ll find there is an 80/20 split within that. Take that 20% and you’ll find another 80/20 split and so on. For example, in a clientele of say 1000, 200 of them are great clients, 40 of those 200 are excellent clients, eight of those 40 are outstanding clients and at least one of those eight is going to be truly and unbelievably awesome.
- Grow a pair (or strap on a pair, whatever your persuasion) and fire your worst 20% of clients. Take no prisoners they are energy vampires and will suck the life out of you (works with staff too…).
- And here’s a challenge for you: Grow an even bigger pair and fire all but your top 20% of clients…
P.S. The 80/20 Principle underpins much of what I am going to show you in all the articles that follow. These relationships do exist in your business, and simply by focusing your time and energy on the small number of things giving you the greater part of your results, you will forge ahead of your competitors in leaps and bounds.
P.P.S. If you can’t wait for the next article and want to know more, get your FREE copy of my book Grow Your Salon FAST here. Just enter the code GSGVIP when prompted. You will have to invest in post and packaging so I know you are committed to reading it. But don’t worry, your money is safe with my 100% Money-Back Guarantee. Click here to find out more.