The Pareto Principle and What It Means For your Business

You may not have heard of the Pareto Principle, but we’re betting you’ve heard of the 80/20 rule? We'll show how it can be positively applied to businesses

You may not have heard of the Pareto Principle, but we’re betting you’ve heard of the 80/20 rule?

This was a rule originally put forward by Vilfredo Pareto, who during a study into the relationship between population and wealth in Italy, discovered that 80% of Italy’s land was owned by 20% of the population.

This general rule of thumb has since been attributed to many other situations, most notable areas of business. In this blog, we’re going to show you how important the 80/20 is and how it can be positively applied to your business.

Time Management

When it comes to business, it is often the case that 20% of your efforts result in 80% of your revenue. Or that a specific 20% of your customer base can account for 80% of your sales. The power of Pareto’s law is that if you can establish what the magical 20% is, you can then focus all your efforts into that rather than distributing your time and effort into other things that aren’t actually of importance.

Cutting away the trivial can be tricky we know. Humans have a tendency to create ‘To Do’ lists that are half compromised by ‘easy’ tasks, to trick ourselves into thinking we are accomplishing a lot in one day. If, however, you put Pareto’s law to use and focus on the 20% of tasks that are essential to generate the 80% positive outcome, you will quickly find your entire business becomes much more efficient and the results much more consistent.


We all know by now that to have a business that grows and becomes well-known means putting time into your social media presence. Unfortunately, most people get far too bogged down in creating the content but very little time in the actual promotion of it.

The whole point of attempting to generate brand awareness is to, you know, make people aware you exist. Once again, Pareto’s law can save our metaphorical bacon. 20% of your time should be focused on the creation process of content (blogs, short posts, infographics etc.) whilst 80% of your time should be solely dedicated to pushing and promoting it. If you shift the balance this way rather than the opposite you should start to see a vast difference in how much attention your content receives.


The way you manage your team can also be greatly improved by incorporating the 80/20 rule. One of the biggest problems between management and team members can usually be stripped back to a lack of communication. If you’re spending more time making demands and not enough time listening, you can easily find yourself alienating your team and thus not getting the best from them.

Leadership often mistakenly makes people assume they need to be the main driving force of a team, the one doing all the talking and generating all the ideas. In truth, 80% of your time as a Manager should be reserved for simply listening. Whether that be to take on board any problems or to let your team be the source of the creative ideas for the company, your own input should only be 20%.


And remember the 80/20 isn’t always about 80 + 20 = 100, it can just as easily be the 70/30 rule. The whole point of Pareto’s law is to recognise an imbalance and use the knowledge to skew the odds in your favour.

Give it a go, you won’t be disappointed.

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