Wilfredo Pareto discovered the 80/20 rule when he wanted to determine who owned all the lands in Italy in the 18th century. He found out that 80% of the lands holdings were owned by just 20% of the families. As he continued his research he soon discovered that many things fit that profile.
Applying The 80/20 Rules For Sales
So how do we apply the 80/20 rules for sales? Well as entrepreneurs we seem to manage to bog ourselves down doing all sorts of non-productive activities. Sure we justify them as necessary activities but in many cases we’re just doing busy work that could easily be delegated or maybe not even done at all.
Because sales are such a critical element of our businesses, it is the #1 item that owners ask for help or guidance when I advise them.
The Formula
So here is my simple formula; until you have enough sales to provide you with sufficient revenue to cover your monthly fixed cost, including your salary, you should be spending 80% of your time on sales related activities, period! Make sure these activities are actual productive and really sales related. Too often, we classify all sorts of activities as sales related when in fact, they’re really not.
So what are sales related activities? Here’s a list of seven:
- Preparing prospect lists
- Making calls to the list
- Sending emails to the list
- Going to meetings with existing or prospective clients
- Preparing quotes or proposals
- Following up on quotes or proposals
- Cold calls if necessary
In other words, activities directly related to generating an order.
For some people these are unpleasant activities but as business owners you need to get over it and make this activity a priority otherwise you’ll struggle along for years.
The 80/20 rules for sales will help to keep you focused on what’s important. Thank you Mr. Pareto.
Copyright © Greg Weatherdon
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Get More LIFE Out of Your Business
You shouldn’t be the hardest working person in your company.
Many small business owners find that even after the struggling start-up years, they’re working too many hours and still managing every aspect of their businesses.
Greg Weatherdon has been there, done that. As an entrepreneur, he learned not only how to get a business to the point of running smoothly, but also how to reduce the number of hours he worked, delegate more responsibility to his employees, and take longer vacations while his business chugged along like a well-oiled machine. And now he is providing the secret to success.
Do you suffer from any of the following?
1. Business ownership isn’t living up to the dream.
2. Endless workdays.
3. You can’t find good people.
4. Profits are less than expected.
5. You can never take a vacation.
You’re not alone. But there is a solution. As Greg demonstrates, with some time and effort, you really can Get More Life Out Of Your Business.
