Taking advantage of the 80/20 rule

I previously wrote that the Pareto Principle dictates that 20% of yourtime and expenses will drive 80% of your revenues. Focus on that 20% and don’tworry about the rest.

I have 120 itemson my to-do list today.  I can’t possibly do it all. However, 20% of thoseitems are important and will help me meet my goals. I focus on that 20%: 24tasks.  The rest can wait.

So far, I’ve spent$133 on this website. Some of that was wasted on a blogging website that Idecided not to use. Other money was spent to park certain relatedwebsite names for the next five years. 80/20.

It would be niceif we could cut our expenses and time investment by 80%, without losingprofits. But alas, life does not work that way. Rather, we need to continuously review ourinvestments of time and money, and trim away the excess fat.

When I worked at Deloitte,the trainers taught us to use a “C” drawer. All tasks could bedivided into A (do-it-now), B (do it soon), and C (don’t do it until you haveto). Put your C items away.  Don’t dothem until you have to.  

Twenty years afterthat training session, I still keep a “C” drawer in myoffice, all full of long-forgotten tasks that no one ever cared enough tofollow up on.  I occasionally clean it out and marvel at all of the time I saved.

About Mark P. Holtzman

Chair of Accounting Department at Seton Hall University. PhD from The University of Texas at Austin. Worked at Deloitte's New York Office. BSBA from Hofstra University.


  1. Do you know your whales and high-rollers? « Accountinator - March 19, 2012

    […] revenue (inference: 97.6% of users don’t contribute revenue!).  This is similar to the 80/20 rule (only more so).  20% of customers (or less) account for 80% of revenues (or […]

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