What exactly is the Pareto Principle and how can you achieve a great deal more with less?
Some things are very hard to explain. On the surface, we see and know that they work, yet often we wonder why, as there seems to be no logic to them. The Pareto Principle is such a thing. Some have called it a phenomenon, a fact or a situation that is observed to exist or happen, especially one whose cause or explanation is in question.
What Is This Mystical Pareto Principal?. And who, Or What Is Pareto?
It all started in Italy in 1897 by Italian economic Vilfredo Pareto. Pareto observed that 80% of the land in his Italian homeland was owned by just 20% of the population. He also witnessed this happening with the plants in his garden—20% of his plants were bearing 80% of the fruit.
He then turned his attention to England in earlier times and noticed that approximately 80% of the country’s wealth was owned by just 20% of the population. He was so intrigued by his discovery that he looked at the effect of this imbalance on other non-related events and found that this mathematical formula worked on many other things too, over and over again.
The Pareto Principle – The Biggest Wins All Start Small
What we have here is a way that we can work out a successful strategy for nearly anything using this formula. Here is how you can use it to create winning strategies and situations, much of the time.
Let’s say, for instance, that you sell a range of products. Out of the products you sell, a small percentage of those products are very likely to make a lot more of the profit than others. I realized this myself when I started a self-publishing book business.
Many authors just release 1 book and wonder why it tanked. This puts them off writing any more books and an opportunity is lost. If you look at many of the world’s famous authors, not every book of theirs is a best seller. Therefore, in anything you do, you have to rack up numbers. You have to then understand the data.
Find The 20%
Once you find the aces in the pack, you simply do more of whatever the aces represent. I’m telling you all this because I know it works. In self-publishing, you may become successful on your first book or your 17th book, if you don’t keep producing books, you’ll never know. Once you have produced many books, a small percentage, perhaps 20%, will return 80% of your profit. This is when you make more books like the 20%.
This works in all aspects of life too. It may not be exactly 80/20, but it will always be a skewed number, perhaps 70/30 etc. Once you realize this, you can see the winners, so do more of that, you can also see the losers, so drop or do less of them.
20% of the books you publish will make 80% of your profit
20% of the people you sell to will make up 80% of your turnover
20% of your friends will make up 80% of your social life
20% of your previous partners probably gave you 80% of your problems or 80% of your happiness
Should I go on?.
20% of the food you eat probably gives you 80% of the calories.
20% of the places you have traveled to have given you 80% of your happiness or excitement.
What do you think? leave a comment below, I would love to hear your thoughts.
Have a great day
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