Get 80% of Results From 20% Of Your Effort and Time
It’s nearing October and I can’t believe how quickly the season has flown by.
September Flower Farming
As our growing season starts to wind down, I am looking back on 2022 and am having a lot of mixed feelings. It’s been our most financially successful year yet, and I’ve taken more time off/left the farm more than ever this season (a major win for me!). However, I’m still feeling slightly strained and burnout is tugging at my heartstrings a bit more than I’d like. As I always do at the end of a season, I question EVERYTHING.
Every year I eliminate more and more on the farm. I delete more tasks, more flower crops, more obligations, and more headaches.
As a result, I’ve had more and more free time each summer, have increased revenue, and have been a happier person overall. Yet, most other farmers seem wildly unavailable, bogged down, and overwhelmed. I’m still not quite where I want to be, but at least I don’t feel like burning down the whole farm now like I usually do at this point in the season.
Recently, a fellow, more experienced farmer lamented to me how tired she was from working such long hours over the summer and fall. I thought about how I’d been working fewer hours and have been leaving the farm more than ever.
I immediately started questioning myself: “I am so much less experienced than this farmer who is working 80 hour weeks in August – am I doing something wrong? Am I letting my business slip? Surely, I am not supposed to have free time right now…right? I should be working harder! Could I be making more money if I worked more??”
After a few moments of nearly spiraling out of control, I realized that I am, in fact, 100% where I’ve wanted to be and happy about it. I’m making money, sales are up, but our work load is down. What more could I ask for? I’m glad to be in the position that I’m in, even though farmers aren’t “supposed” to have free time in the summer & fall (phooey).
I came to this result of taking vacations in August and working less hours because of a super old guy named Vilfredo and his garden.
Vilfredo Pareto was this old economist guy who lived in the late 1800’s/early 1900’s who studied the mathematical distribution of wealth in society. He discovered that about 80% of the wealth was produced and possessed by 20% of the population (sad but true). He also observed that this distribution could be applied to nearly everything in life outside of economics.
In Pareto’s garden, he observed that 20% of the peapods he planted produced 80% of his peas. He observed that generally, with most things he looked at, 80% of outputs are caused by 20% of inputs.
Phrased another way, 80% of the results come from 20% of the effort and time.
This principle came to be known as “Pareto’s law”, or “the 80/20 rule”.
This principle became quite famous and was applied to hundreds of aspects of business and life. For many businesses, only ~20% of their customers are yielding the majority (~80%) of their revenue. These numbers may not be exact, but the general idea is that a small portion of your customers are your top fans/loyal advocates/ ‘til-death-do-us-part fanatics, actually generate most of your income. The remaining 80% of your customer base only contributes to about 20% of your profits. I dare you to take a look at your own business, and I’ll bet you’ll find something similar happening. I sure found it to be true with mine.
I applied this principle to nearly everything in my life and business. I asked myself questions like:
What 20% of things are resulting in 80% of my desired happiness and outcomes?
Which 20% of things are causing 80% of my problems?
What 20% of our crops are resulting in 80% of our revenue? (This was a GOOD ONE)
Which 20% of our customers are resulting in 80% of our revenue?
Which 20% of our tasks results in 80% of our progress?
Which 20% of our sales outlets results in 80% of total sales revenue?
The answers to these questions led me to shift my focus on the 20% of crops, customers, tasks, and markets that were yielding the most results.
Shifting focus from 100% of my customers to catering to the 20% who care the most about us has increased our revenue without actually gaining a larger customer base (more customers does not always equal more revenue).
Eliminating nearly all crops that aren’t adding significant dollars to our bottom line also has increased our revenue, while decreasing the number of hours we work (and the clutter in my brain-space).
Because of the 80/20 principle, I now am able to:
a.) Make more money
b.) Work less
c.) Go on vacations/leave the farm during the growing season
d.) Take 1-2 days off from the farm each week for most of the growing season
e.) Focus on projects I actually want to work on
f.) Spend more time with my friends and family
g.) Have hobbies outside of work
h.) Focus on my health, fitness, and personal growth
You can apply this principle to your:
1. Revenue (which 20% are contributing to 80%+ of total revenue?)
2. Profits (which 20% are contributing to 80%+ of total profits?)
3. Expenses (Which 20% are contributing to 80% of the expenses/waste?)
4. Customers (which 20% are producing 80%+ of the revenue?)
5. Products (which 20% are producing 80%+ of the profits?)
6. Marketing & Advertising (which 20% of my marketing is producing 80% of the desired result?)
7. Daily Tasks (which 20% of the tasks will result in 80% of my desired result?)
8. Yearly Tasks (which 20% of the tasks will result in 80% of my desired result?)
9. Home Life (Which 20% of my obligations result in 80% of my unhappiness?, or, which 20% of my obligations result in 80% of my happiness?)
10. Relationships (What 20% of the friends I have result in 80% satisfaction/joy?)
Or anything else in your life.
Use this to shift your focus to the fraction of items that actually produce the result you want.
One more example from our farm to paint this picture crystal clear:
Once I took a look at my business through the lens of Pareto’s law, I discovered that a huge chunk of my unhappiness during work was from exhausting conversations with couples who wanted full service weddings (it’s just not my thing). They asked too many questions, were too particular, and took up far too much of my valuable time. Sometimes they didn’t even book us, which made it felt like an even bigger waste.
On the other side of the spectrum, a few wedding clients simply trusted me, paid their deposits with little to no hassle, and wanted to pick up their flowers from the farm.
Those few, easy clients weren’t contributing to 80% of my unhappiness AND were still contributing to wedding profits. So what did I do?
I changed our business model.
Now, if you want to book a wedding with us, you simply email me to see if your date is available with us, and if it is, I send you a link to book everything else yourself. Easy peasy!
The result was me reducing my communication time with clients from 10+ hours a week, to less than one hour a week (usually even less), and streamlining the booking process made the sales process frictionless, so people purchased easily resulting in increased wedding revenue. Couples who seek full-service packages are referred to other amazing florists in our area who love doing it, so the couple will get the attention and result they deserve. Our revenue increased. Win-win for everyone!
I’ve been sitting down analyzing our 2022 numbers and applying the 80/20 rule to everything once again, with plans to eliminate even more from my plate and to continue to focus down on what truly matters (my happiness, and the overall health of the business).
If you want to make more profits on your farm, have a work schedule like a half-way normal human being, and actually enjoy your summers a bit more – I highly recommend giving this exercise a try.
Apply the 80/20 rule to as many aspects of your life and business as you can (of course, with some intuition tacked on to it), and see what happens. I’d love to know what you find out and the results you achieve from it! Comment below with any insight, “ah-ha” moments, or clarity you find.