The 80/20 rule applies to everything in business. As owners we need to learn to focus on the 20% of our activities that will generate 80% of the return on our investment of time, energy and financial resources. We need to learn to set goals around that essential 20%.
Video Transcription
My name’s Gary Furr and I own a business called The Growth Coach, which is a business coaching firm. My background is I started my career in an industry and I helped grow that company as operations officer from 3 – 5 million and then I quit that company and started my own company and did that for 6 years and grew that company to be a million dollars in business and then I sold that and went to work for another organization as operations officer and we grew that company from 16 – 40 million at the time I was there. I left that company in November of 2012, reasons of too much international travel and I just wanted to be home and stay around. I left that company and started The Growth Coach because I wanted to help business owners to gain greater success in their businesses.
There’s issues whether you’re small or you’re big. The disadvantage that a small business has is they don’t often have the personnel or the resources to overcome those issues and they’re not proactive and they don’t take steps to correct right away, they can be very costly. Whereas a larger organization, you have resources you can put on a particular issue. You have money to back you up so they don’t have such a dramatic effect but small businesses have issues just like large businesses. There’s really no difference. It doesn’t really matter the industry, all businesses have issues.
Cash flow is the number one problem for any business and even small businesses and a lot of businesses gone bankrupt with a lot of account receivables on their books but no cash. Managing cash flow is a critical issue for small business. The other issue that I tend to run into a lot is a business owner wearing so many hats and they can’t get everything done so they’re wearing all the hats, they’re trying to do everything themselves and things fall through the cracks and they can’t get it all done. That’s a pretty common issue. Probably the third issue that I would have seen most common is too much clutter in their lives. They’re not focusing on that 20% of their activities that will generate 80% of their revenue. They know, everybody knows the 80/20 rule but very few people practice it.
The 80/20 rule is that 80% of the return on your investment of time, energy and money comes from 20% of your activities. If you can learn to focus on those 20%, that 20% that generates the greatest return of investment of time, energy and money, you’re going to be much more effective in your business and many people, like I say know that, but very few people practice it. As a coach, I try to help people to understand “what is that 20% that’s going to bring you the greatest return? Let’s focus on that. Let’s set goals and action plans in relation to that 20% because that’s going to bring the greatest return.”
People are resistant to change. They get into doing the status quo and they get comfortable with that. It’s hard for people to get out of their comfort zone and you really need to get out of your comfort zone to make a difference in your business and be willing to be open to other ideas because in this environment, in this business world, if we think that we can be successful in business based on talent alone, it’s not going to happen. You can’t just survive in business based on talent alone anymore. You have to have these other business skills that are necessary for success. That’s why 95% of small businesses go bankrupt, is because often times a person is very talented, they are very technically confident, they do their job but they don’t have the other skillsets to be successful.
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