Pareto’s Law – The Definitive Guide to Bigger, Easier Profits After you’ve heard the adage “work smarter, not harder” for the gazillionth time, you probably want to gag. Reading Timothy Ferriss’ The 4-Hour Workweek, you’ll find it again; this time, swallow the gag reflex and pay attention.

It comes in the form of Pareto’s Law, the 80/20 principle (another teaching point that’s been around the block more times than a new driver in a Mini Cooper). Never mind. You really do need to learn this principle – and put it to use – if you want to boost the bottom line and still have time for a life.

Even just the title of Ferriss’ book should be enough to nudge your imagination. What would you do with a workweek that only lasted four hours or less? If it’s really a possibility – and it is – it’s worth taking another look at something that actually works, and not just looking, but putting it to use.

Here’s how it works: Pareto says you get 80% of your results (good or bad) from 20% of your input (what you do). In business, it can look like this: 80% of your sales come from 20% of your customers. That means that you’ve got a dead weight factor of 80% among your client base. They’re requiring an inordinate amount of work, and are only producing a small portion of your revenue. Translation: not good.

How do you put this principle to use to boost your profits?

1. Track everything.
First, you’ve got to be able to know which clients are the most profitable. If you’re not keeping track of this info, start. If you’re in an MLM selling health and beauty products, you need to know which clients buy the whole anti-aging line – on the autoship plan, and which buy the occasional mascara, if you call them… after seven attempts to reach them. It works the same way for every business – product- or service-driven, from haircuts to custom-built private jets. That same 20% of your customers are easy. They know what they want. They buy it from you. They’re happy. You’d better know exactly who they are.

2. Know that 20% like you know your own dog.
You want to be able to pick these customers out of a lineup because you know them so well. What makes them such great customers? What trends do you see? How do they like to be contacted? What are you providing that compels them come back for more? How did you find them? Where can you go looking to find more just like them? By taking the time to get to know them, you can learn a lot – it’s time well spent. Essentially, by learning all about these customers, you form a blueprint for your ideal customer. With this blueprint in hand, you take the first step in designing your customer base.

3. Be picky.
When you’re new in business, you’re so grateful to have anyone come through the door that you’ll put up with a lot just in hopes of making a sale. It’s not a good precedent to set for your business, but it happens. The trick is moving away from that as quickly as possible. Given the choice, why would you gather unpleasant, high-maintenance, penny-pinching customers who tax even your best customer service person’s patience? Instead, you could assemble a group of loyal, quality-driven, appreciative clients who value what you provide and make doing business a pleasure. It’s a matter of choosing quality over quantity, at first.

4. Get into cloning.
Well, not really. But you do want to redirect your efforts from how you used to do marketing and sales – anyone with a pulse – to attracting more who fit the blueprint of your ideal customers, and by spending more time and energy on the customers you’ve got who are already ideal. You can find more of these precious gems by asking for referrals, by going where they go and doing what they do, and by doing everything you can to provide exquisite service to them.

5. Systematize it.
You’re probably not in the position to just go willy-nilly firing clients who don’t meet your dream come true blueprint. But you can definitely make sure that your new clients are the ones you choose. Set up a ranking system so you’re able to keep track of your clients and their profiles. Customize your service so you spend the bulk of your resources on the most productive clients – while still providing excellence to your B-list clients.

It’s always possible that today’s 80%-er may become tomorrow’s best client – or they may introduce you to that dream client. Regardless, your goal is to provide excellence to all clients, while actively pursuing the ones that’ll make your life easy and your business boom.

An internet business isn’t something you want to jump into without any training – but with a bare minimum of tech skills, anyone with a computer, internet access, and a hobby or interest can build a business.

Additional Resources on this topic:

http://en.wikipedia.org/wiki/Pareto_principle

A friend of mine Terry Daniel  posted a great link on Facebook that I want to pass alone to everyone. A great site called insidecrm.com , it’s an article on top social media site:

Customers buy products for three main reasons: status, price and function. To sell tothem, determine which of these is motivating them. For example, drivers buy Michelintires for a variety of reasons: They are safety-conscious; they like the brand; they are impressed by the tires’ long life; the tires fit their self-image. Don’t assume you already know why customers buy your product.Ask them such questions as:• How do you make purchasing decisions?

The creators of the The Blair Witch Project, an independent film shot on a low budget,knew that their horror-movie customers enjoyed being scared – so they focused on function. When the film debuted at a festival, promoters plastered “missing persons” signs around town to generate curiosity about what happened to the protagonists. They opened the film in small theaters, where it quickly sold out, and they spread rumors that it was too scary for normal theatrical distribution. This created more buzz. Theaters reported earning as much as $56,000 per screen, compared to the $10,000 to $12,000 per screen they earned on mainstream blockbusters. Because its creators understood its customers so well, The Blair Witch Project became one of the most profitable moviesever made. Customers fall into these four types:1. Those who buy the best products they can afford.

Note: this recording was originally posted in April 2008…but I just had to bring it back due to the high demand…It’s one of my wittiest posts to date!

Todays marketing minute will focus on getting rid of those dreaded TIME WASTERS, those customers that drain your energy while making you little or no profit. The ones that you keep hoping will one day give you that big job or tell all their friends to come buy your product or service. Is it crazy to think that you can PICK the customers with whom you do you best work with and leave the rest behind? The answer is a resounding No…

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Choosing your customers sounds like a dream come true. In some perfect world, we could hand-select our customers and they would behave exactly as we want them to. They would provide us with all the work we want and would be a joy to work with.

Well, that perfect world is here. The secret to having a roster of choice customers is to do something that is pretty unorthodox; something that will have you shaking in fear; something that will take you totally out of your comfort zone. The secret to having your dream customers is, to dump the ones that are not ideal for you.

Yes, I know that we go into business to get as many customers as possible and to be as successful as we can. So the whole idea of canning our customers is totally foreign. It goes against everything that we as business people believe. However, by taking this step, we will make our business interactions much less stressful, produce better work and be on the path to attracting more ideal clients.

So how do you go about this process? You can’t just pick up the phone and say “I’ve decided to dump you as a client” to any client who upsets you on any given day. You need to put these steps into action.

Thoroughly analyze your list of clients. Put them into three categories: the ones you totally enjoy working with and work best for and with; the ones you dread working with and therefore give less of yourself to; and those who fall into neither category.

Then, do some deeper analysis of the list of ideal clients and ask yourself what it is exactly about them that makes you enjoy working with them. When you have compiled that list of reasons, you now have the criteria of what makes an ideal client for you.

Those who are in the list of those you dread working with are there because interactions with them tend to be difficult, they rob you of your energy and your productive time and therefore your work for them is less than stellar. By getting rid of these clients, you will enjoy your workday more and work at your peak potential more often. This will result in better output from you and even happier clients.

When you have made the decisions of which clients you will no longer serve, the way to trim them from your client database is by referring them to other people who may be more capable of serving them well. Essentially having a good fit with your clients is important to doing a good job, if you are not a good fit, you are doing them a service by referring them to someone else who may be.

When you have successfully eliminated the stressful, demanding, counter-productive factors, a.k.a. clients, in your business, you will see that you have created a much better work environment for yourself. Just imagine how pleasant and enjoyable it could be to work with only your ideal clients. It will refresh your spirit and creativity and you will be a much more positive, confident and successful individual.

By doing so, you will find yourself much more productive and producing better results for your remaining clients. This good work will, in turn, reward itself, by earning you more referrals to other ideal clients. Your happy clients who you enjoy working with will be thrilled to recommend you because they are so pleased with your work. Your client base will fill back up, replacing the less-than-perfect clients you got rid of and more.

Remember those clients who were somewhere in the middle, neither a joy to work with nor a torture? Your increased productivity and better work will often reflect positively on these clients and they will become more like your ideal clients. If they do not, and they fall into that category of those you dread dealing with, it is your signal that it is time to do a little more cutting into your client database.

The scary step of choosing the customers you want to work with and getting rid of the ones you don’t want to can make a huge impact for the better on your business and your life. Once you embrace the step that needs to be taken, you will be rewarded with the results you seek in your business.

Guarding Your Most Precious Resource…your TIME!

Think you’re good at time management? Chances are that you do, nobody thinks they’re bad at this. We’re all so busy being busy that it seems like a mortal sin to let time get away from you. In fact, most people would say they’re way beyond time management , they’re time masters! So, maybe we’re not talking about you; we’re talking about someone you know well.

Based on results, cold, hard numbers, that is, there’s no link between a full schedule and a full bank account. Business owners typically spend 80% of their time on 20% of the tasks needed to make their businesses succeed. (Darn! There’s that 80/20 rule again!)

Time is the one truly limited resource you have. Money can be replaced (usually a headache). Personnel can be replaced (more of a headache). Buildings, products, even ideas, there’s more where those came from. But once you’ve spent your 24 hours today, they’re gone. A wise business person recognizes this, and squeezes the most value out of every minute. If you’ll adopt a sense of vigilance with the clock, you might be surprised by how many of your minutes sneak past you without giving up the goods.

Where does the time go? Every minute appears to be honorably discharged , until you take a closer look at the results you get from it.

Case in point. Every business owner knows that relationships are huge in the master plan for success. You are your brand , and to get that face time in, and you’ll stay on your prospect’s radar. Treat your small customers just like you’d treat your big ones. These sayings sound good , but face-to-face time is some of the most expensive you’ll ever spend. You could easily kill an entire afternoon schmoozing, getting to know your prospect’s needs, building an everlasting bond and all with the idea that your loyalty upfront will pay off with something big down the road. Chances are, you’ve just spent 80% of your day on a client who might (if we’re really generous with the numbers) add 20% to your bottom line for the month.

Does this mean you should shun face-to-face meetings? Not necessarily. But neither should you necessarily jump at the first mention of a meet and greet. After you figure in your travel time, the time you’re likely to spend cooling your heels in your prospect’s conference room, and all the extra minutes that will pool at your feet just by the nature of an in-person meeting, you’ve lavished quite a luxury on your prospect and with no guaranteed return on this investment.

In-person meetings are great but recognize them as the powerful tool they are rather than running willy nilly just because someone asked.

Or, here’s another one for those who are just getting started. Want to drive every business contact and vendor crazy from the get-go? Waste their time along with yours!

Commercial printers see this on a daily basis. Brand-spanking new entrepreneurs come in to kick some tires. They’re long on enthusiasm, short on funds, and nowhere on viability. They’re ready to take on the world, and want to get four color brochures, banners, business cards, a custom logo, a website, and even custom-printed t-shirts for their hordes of satisfied customers. Creativity , check! Clue , nope! In fact, not only do these folks end up ordering only a cheap set of single color business cards, they do it only once because they don’t stay in business long enough to need a reorder.

Enthusiasm is great but it’s no substitute for solid planning and real action.

Here’s one more example that disguises itself as fiscal responsibility. Say you need something done. You call every listing from A to Z to find the absolute best price. Calling, calling, calling , the minutes and hours leaking through your clenched fists as you search for a way to save a few dollars. When price becomes king, you forget all about quality, or the value of momentum.

Getting the most bang for your buck is great but not when you end up stepping over dollars to save a few cents.

Chances are you’d never even consider sitting around playing Solitaire on your computer during your workday , most entrepreneurs would recognize this for a gross misuse of irreplaceable time. But if you let your guard slip throughout the day, you might be surprised to see how many minutes escape unused.

Become a true master of the 24 hours you have each day. Constantly evaluate whether any given task makes the highest, best use of your time. Make the adjustments you need so that you’ll use the 80/20 rule to get the results you want.

My varied vocational path has afforded me the opportunity to cross paths with many highly intelligent, creative and all-around remarkable folks with varying degrees of “career success”.  Naturally, one man (or woman’s) notion of “success” does not fit all, but suffice to say that most agree that given one’s career path, “success” includes a certain amount of financial aptitude and a general satisfaction derived from one’s work.  This being said, in considering how to approach an article on small-business ownership, I made a rather astounding discovery.  Most nearly everyone I’ve spoken to regarding their respective careers has confessed to me at one point or another that they secretly long to start their own business!  Admittedly, I have taken quite a fancy to it myself.  In today’s saturated marketplace, overwrought with products and services and spinning wildly with the alacrity at which technology is advancing, many workers accustomed to the 9-5 work day, complete with office cubicle are discovering that small-business ownership is no longer the privilege of stuffy, right-brained workaholic behemoths.  Today’s business owner can be anyone from the terminal-degreed super-brain to the creatively inspired housewife.  To be sure, it’s an exciting time for today’s business owner, and much of this can be attributed to that technology of which I spoke earlier.

Investing in a small business today is available to all of us, that’s right…you heard me…and this includes…you! Naturally many of you immediately responded with a steady stream of “buts,” head-shakes and gasps, granted, a natural response.  However, the notion of you investing in a small business of your own is within your grasp, and largely because the “investment” of which I speak has little to do with the money you may have been told you would need to come up with, and more to do with creative inspiration, time and a tech-savvy spirit!  The key to the successful small business today has little to do with “initial overhead,” and more to do with a strong Business Plan, clear goals, a strong, quality product and a professional website and on-line marketing strategy.  Of particular importance when establishing your venture is the professional website.  Today’s small-business website is its calling card, it is ground control, headquarters, the mother ship, I think you may get the idea.  A business’ primary aim in establishing its product/service is to facilitate a client base of individuals or organizations which may have a vested interest in the service/product you provide, and to cultivate existing relationships with your current client base.  Much of this, as I mentioned earlier can be done through savvy, low-cost internet marketing, but without a company website to link your banner ads, eblasts, and e-promotional material to, your efforts are virtually fruitless! 

These tips for developing a website for your small business will launch your brainchild into the new millennium and open the doors wide to establishing a strong client base and a profitable business venture!

1. Choose and Insure your Domain Name:

 When thinking about a Domain Name for your website, liken it to the process you underwent when deciding upon a name for your business.  Uh, you have done that, right?  You will want to select a Domain Name that establishes your business. Many businesses opt for a Domain Name that refers to, is similar to…or “is” their business name.  Unfortunately, many folks shopping the internet market make a terrible mistake when attempting to acquire their Domain Name of choice.  Many will enter the chosen name into a common search engine search bar (such as Yahoo or Google) to see if anything “pops up” as it were.  Although this may sound like a plausible way to identify whether or not your name of choice is available, you may be dooming yourself and your chosen name to a hefty price tag for its “getting”.  Sadly, it is a common on-line practice these days for profiteering web-skimmers to identify which possible Domain Names have been searched for, and the frequency with which it has been done.  These names will then be bought out by these web surfing pirates, wherein they will be optioned to you later for a ridicules fee.  To truly protect your Domain Name, make a list of ten or so names that genuinely appeal to you, in order of preference.  Make sure you have your credit card ready, and then do your search in the order in which the names appear on your list.  Once you have found a desired Domain Name that is available, purchase it immediately (i.e. right then and there) and you’re in!

2. Select Your Web Host:

Now that you have selected your Domain Name (feels good, doesn’t it), you will want to find a company to host your website.  A web hosting company essentially consists of a large network of computers which can easily accommodate your website, (thousands, actually) and make them viewable to the virtual community.  There are many things to consider when deciding upon a web hosting company.  Unfortunately, there is no “one size fits all” formula for the process.  For some, cost is an issue, for others who may be inordinately lacking in technological prowess, you may want to consider a company that offers packages which may include building your site for you, and even updating it regularly and providing competent and reliable technical support. 

I strongly encourage you to take your time with this research project, and that is exactly what it is!  Spend some time on the web researching various web hosting companies, read as many on-line articles offering “choosing a web host” tips as you can.  Do not make this decision hastily, as most web hosting companies will charge, at minimum a monthly fee, and others may charge a hefty initiation fee.

3. Develop your Web Pages:

Once again, the process of developing the content for your web page is not for the faint of heart, particularly if you are not known for your “html magic”.  Any good architect or remodeler begins with a blue print or floor plans before undertaking their task at hand, building your web page should include the same, a thoroughly blueprint articulating the desired effect.  How many pages would you like your website to have?  Most websites offer at least four, including:  Home, About Us, Services and Contact.  However, depending on the services and/or products your business offers, you may want to include additional pages pertaining to Client Testimonials, Photo Galleries, Menus, Portfolio, Directions/Maps, etc.  I think you’re beginning to get the idea.  There are thousands of ways to design your website.  A web designer can be contracted.  However, they are usually quite pricey.  There are also thousands of programs a consumer can purchase to facilitate building one’s own site.  This can be time-consuming.  Particularly, as I’ve mentioned earlier, if one is not particularly technologically savvy.  Once again, I encourage you to do your research when deciding how to approach the building of your website and its pages. This is your “calling card”.  As such, a shoddy website, with poorly written copy and an unattractive design, or a site difficult to navigate will quickly drive your potential client away.  Create a site that will keep them with you for at least five minutes!

4. Develop a Presence on Major Search Engines & Client Opt-Ins:

Now that you’re up and running with a bonafide business site of your very own, you need to let “us” know about it.  A site unseen is no better than a figment of one’s imagination, so get out there and promote your site.  You’ll need to begin promoting your site by 1) seeing to it that major search engines such as Google, Yahoo, AOL, etc. are listing your site prominently when searched for and 2) developing an extensive mailing-list.  When attempting to elicit clients, nothing sours a web-ster more than an inbox overburdened with spam.  Make sure to include in your promotional materials, as well as on your website, an opt-in link, requesting emails from interested parties so that you might send them emarketing promotional material with their respective blessing.

Armed with these easy web tips, you are well on your way to realizing your small-business venture, creatively professionally, and perhaps most importantly, inexpensively.  It all begins with your web presence, folks…jump from here and you’re sure to fly!

What with all this talk of networking and “putting yourself out there” as it were, many of you may be thinking, “as much as I appreciate the need for social interaction where my business is concerned, what if I’m not a people person?  What if I don’t know how to be “easy” with communicating my strengths and value”?  This is a valid question, for some networking is as natural as taking in air, for others…well, as difficult as uncomfortably holding your breathe.  Fortunately, networking is not a cut-and-dry affair.  Although most of us associate networking with getting to as many business/social functions as possible and verbally putting that best foot forward, there are other, less socially-oriented methods of networking that may be more in keeping with your own personal style.  Of course, understanding your personal style is critical in helping you to identify the most effective way of marketing your skills, talents and services to that vast social network out there we call the world!  This begs the question, what kind of business owner are you?  “There are 9 key types of personality and understanding each will help you to enjoy your business more and provide your company with what it needs to grow,” says Darrell Zahorsky, President of Profit Innovators, Inc. and business consultant of the New York Times.  These 9 Personality Types of Entrepreneurs will assist you in assessing how you can best operate in your business, meet the needs of your clients and find networking and marketing strategies that will prove most effective.

1. The Improver:  The Improver focuses on improving the world in some way via the business venture.  Improvers are notably adept at maintaining an ethically sound business; integrity and moral standing is key.  These business types can fall into the trap of perfectionism and often may be over-critical of employees and customers.

2. The Superstar:  The business venture in this model is centered around the high-energy, adept and charismatic “superstar” CEO.  This personality will often build a business around the personally developed brand.  These personality types can fall prey to workaholism and are often highly competitive.
3. The Advisor:  This is the quintessential “customer service” personality type, and most likely to proffer up assistance and advice to customers…famous “Advisor” creed, “the customer is always right”. Beware the “burn-out” rate associated with this personality type.  These entrepreneurs will frequently focus so heavily on customer relations; they may leave their own personal needs and that of the staff by the wayside. 

4. The Artist: As the name suggests, these personality types are often highly creative and idealistic.  Most commonly associated with creatively-inclined businesses, such as web and graphic design.  These personality types are frequently overly-sensitive regarding their artistic output…beware of taking things personally.  Some criticism can be constructive.

5. The Visionary:  These personality types are focused primarily on the future and notably forward-thinkers.  A high degree of curiosity and a sincere interest in the world around you is the foundation of these entrepreneurs.  A word of caution, these personality types can frequently get caught up in the “dream” and lose sight of the “real world” as it pertains to the best interests of the business.

6. The Analyst:  These thinkers are the “fixers,” and often function in a highly linear and systematic fashion.  These businesses are often centered in scientific exploration and research or engineering.  These types excel at problem solving.  A noteworthy caution:  analytical thinkers can find themselves trapped behind their own minds…work on the notion of trusting others to do their respective part.

7. The Fireball:  The fireball, once again as the name suggests, is a business leader laden with passionate drive, energy and exuberant optimism.  Customers often trust that these businesses are “can do” businesses, first and foremost.  Personality Alert:  These personality types notoriously over commit themselves and their staff, balance your inherent exuberance with effective business strategizing. 

8. The Hero:  The hero brazenly leads their business and staff into any surmountable and seemingly insurmountable challenge.  Perhaps the Star Trek creed best serves this courageous personality type, “boldly goes where no man has gone before”!  A word of caution to this great entrepreneurial lion, take heed to avoid forceful tactics in your business dealing and beware of over commitment.

9. The Healer:  This personality type provides a nurturing and harmonious business environment.  These entrepreneurs seem to have the uncanny ability to stay cool in virtually any situation. However, a word of caution:  your need to maintain sanctuary within your business may feed a largely unrealistic comfort zone.  Open your mind to the hazards of outside realities and plan for business turmoil, don’t avoid it.

Clearly, there exists a considerable amount of “gray” when assessing one’s one personality type, but making this assessment early on in your business venturing is critical to analyzing your own needs as well as those of your company, your staff and your customers.  There are a plethora of intensive on-line personality tests to help you in gauging your own modus operandi.  Visit these sites and test yourself.  They’re often free and require 10-30 minutes of your time.  You’ll find the investment to be invaluable!

See: 
http://similarminds.com/software.html

http://www.2h.com/entrepreneur-tests.html

http://www.humanmetrics.com/cgi-win/JTypes2.asp

Speaking of New Year’s Resolutions, how many years have you pondered the notion of starting up your own business, envisioning a day comprised of doing what you love and loving what you do, working on your own schedule, developing your skills and talents and channeling them through a product or service you want to stand behind, yet you never took steps to realize your business venture because you, like so many like you were trapped beneath your own self-defeating ideas about your dream. “I can’t _____________, I don’t know where to begin, I don’t have the start up capital,” etc…simply fill in the blank. I’m sure this sounds familiar, right?

I have some good news for you, you can…if you desire it, you were meant to manifest it, and furthermore, start-up capital isn’t necessary. I know this seems simply too good to be true, but it is true, nonetheless. Today’s business idea, marketing plan, industry venture doesn’t begin with thousands of dollars in merchandise imprinted with logos and mailed willy-nilly to hundreds of faceless “potential” clients. Today’s market is a virtual market, and it all begins with you, your good ideas, a computer with Internet connection and Gettingthewordout.com. The idea behind Getting The Word Out is the saving grace for any start-up small and mid-sized business, regardless of your product, your location or your demographic, and it begins with one simple concept…guerilla marketing! The small business market has its advantages; small markets are conducive to maintaining intimate relationships with clients and acquiring low-cost publicity. However, the critical concept behind guerilla marketing requires ingenuity, time and creativity on the part of the small-business entrepreneur.

Guerilla marketing emphasizes concentrating on developing relationships with current loyal customers, rather than focusing on acquiring a homogenized new customer-base. The catch-word here is “quality” marketing. The small-business owner, utilizing guerilla marketing tactics, must create a “standard” of excellence and mainstream their product or service, rather than developing a business with diverse and unfocused services or products.

With an emphasis on “personalizing” the relationship between business owner and customer, much latitude exists within the realm of technology to bring this technique to fruition. Developing an effective Website, utilizing Email Autoresponders and maintaining “constant contact” with your customer-base is the proven, workable marketing method behind guerrilla marketing, and accounts for its unequivocal success for the past 20+ years. But you don’t need to take my word for it, visit www.gettingthewordout.com and familiarize yourself with this profoundly effective guerrilla marketing blog for invaluable tips and step-by-step procedures to bring your small business into the 21st century of effective guerilla marketing!

Tis the season for quality family time, overindulgence and general holiday cheer. As such, for most of us, those areas of our life so many of us struggle to discipline ourselves in throughout the year, whether it be maintaining general health and fitness or managing our business with success can frequently fall to the way-side, replaced by a general sense of uninhibited merriment. With the approach of the New Year, often comes the internal need to re-commit our selves to those things we value, the diet, our friendships, and our business ventures. As such, reconnecting with your client-base via both direct and e-marketing mail campaigns to bring in the New Year can create a sense of camaraderie and refortification of your shared vision…business success!

As such, a direct mailer or email to your client pool emphasizing your goals for their business or service needs for the New Year can build morale and help in reassessing customer need. A simple spirit-boosting note with strong action verbs, as well as an itemized list of your goals for your customers’ success reminds your clients that maintaining that relationship and providing the services or products they have come to rely on is your primary goal for 2008!