How I Do Less, With Less Stress and Make More Money

Do you often feel that you:

  • have too much to do?
  • have too many calls to return?
  • have too many people nibbling away at your time and energy?
  • have too many 'clients' sucking up your time and never closing a deal?
  • spend too much time away from family?
  • can't remember your last vacation?
  • are still struggling to make ends meet?
If you answered yes to any of these questions, you're doing too much of the wrong kind of business!

Ever heard of Pareto? He was an Italian economist at the turn of the 20th century who observed that 80% of results come from 20% of the inputs.
The Pareto principle (also known as the 80-20 rule, the law of the vital few, and the principle of factor sparsity) states that, for many events, roughly 80% of the effects come from 20% of the causes...It is a common rule of thumb in business; e.g., "80% of your sales come from 20% of your clients."
Smart guy, Vilfredo Pareto. Are you taking advantage of this principle in your business? It's a tough thing to wrap your brain around - I know it was for me. For about 9 years in this business, I did what most agents do, what we're told to do - I tried to please everyone all of the time. Not smart. I was able to grow my business, sure, but not at the pace I knew I should be acheiving. You simply can't be all things to all people.

There had to be more to the way this business is done. My partner and I decided - without having considered Pareto's Principle - that we needed more time off before we just burned out. We also came to realize that life is just too short to deal with jerks.

So we stopped.

The year we decided to make a radical change in our business (around 2004), we each took about 5 or 6 weeks vacation. We reduced the number of people we dealt with to a small number of clients who were serious about making things happen and who we realized would produce the bulk of our income anyway. In other words, we fired about 80% of our clients and spent more time working with the other 20%.

It was magic! We were home for dinner and for kids and grandkids functions! We almost completely quit working on weekends and turned off the cell phone after 5 or 6 pm. Our smaller group of clients were happy to see that we were taking time off. Imagine that - your clients are happy that you're not available - this was incredible!

Because we were focusing on meaningful business relationships, we closed more deals, made more money, and became much less stressed out. The business was fun again!

The 80-20 rule doesn't just apply from our side of the desk though. If you're an investor or property owner, consider using this principle in your business too. Take a good hard look at what you're doing every day and decide to focus your efforts only the 20% that actually gets results and let the other 80% go by the wayside. Stop calling every agent in town to 'get the scoop' and interview several until you can narrow your contacts down to one or two really good agents that you can work with. With just one contact that you feel you can work with, you'll have less to keep track of, and fewer headaches. And since you'll have a better, more constructive and trusting relationship with that person, you'll find that you actually do more productive business and your income will go up while your down time also increases.

I just love a win-win solution, don' you? How else can you apply the 80-20 rule to your daily life?

2 comments:

Ed Kohler June 19, 2009 at 12:46 PM  

Great post. I imagine a lot of agents don't believe this is even possible.

Doug Lytle June 20, 2009 at 12:02 PM  

Thanks Ed. Not only do most agents not believe it, they had the hardest time adjusting to our new found freedom. Did I mention that we ditched our pagers too? Not being instantly available to our colleagues was probably the toughest part of this transition.

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