The Pareto Principle: How to Apply It and What to Avoid

The Pareto Principle, named after economist Vilfredo Pareto, states that 20 percent of invested input gets 80 percent of the results. In a perfect world, inputs and outputs would be balanced. What you put in and what you get out would be equivalent–or, if we could really get lucky, business owners would put a little in and get a lot out. You’d see a regular rate of return on all your efforts at work… but that’s not how it really goes.

Recognizing the 20 Percent–Put a Little In, Get a Lot Out

In the real world, the work of 20 percent of a corporation’s staff often results in about 80 percent of the company’s profit. 20 percent of your marketing efforts accounts for 80 percent of your conversions. Pareto himself used the rule to explain how 80 percent of Italian property was owned by 20 percent of Italy’s population.

The good news is, that shouldn’t be a discouraging statistic. Recognizing what works best is just good business management. Mike Stromsoe’s Unstoppable Profit Producer Program helps you recognize and maximize the impact of that supercharged 20 percent.