Running an effective business is the key to work-life balance for entrepreneurs, and in this article I outline the most common problem standing in between you and that dream. Pin this article right now if this is something you’d like to improve for yourself… because it can be done – with the right systems in place.  

Ever Heard of the 80-20 Rule?

Perhaps you’re already familiar with the 80/20 rule, also known as “The Pareto Principle”? I hope so. It’s a well known term in the organizing and productivity industry – for good reason. Named after Italian economist Vilfredo Pareto, the principle states that roughly 80% of outputs are generated by 20% of inputs. In other words, the majority is most often fueled by the minority.

Isn’t that how it always is? 🤨

I happen to think it’s one of the most amazing guidelines ever because it’s applicable to so many situations in life.

Let me give you a few examples:

• you use 20% of the clothing in your closet 80% of the time
• You get 80% of your business from 20% of your clients
• You tend to use 80% of the groceries you buy, but 20% are discarded
• 80% of customer complaints arise from 20% of your offers
• 20% of your team members create 80% of sales opportunities

Naturally, there are exceptions to every rule, but the Pareto Principle is largely accurate…so accurate that it can be a little scary sometimes. That’s why it’s so useful to analyze your business with it. 

In the context of running your business, the Pareto Principle can be applied to various areas of operations in order to optimize efficiency and effectiveness. By identifying the key factors that contribute to the majority of your outcomes, you can prioritize your efforts and achieve significantly better results.

Today, I’d like to cover one such coveted result specifically – work-life balance. 

The ONE Data Point We Investigate the Most

When I start working with any business owner, one of the things we tend to talk about first is the Pareto Principle, ak.a. the 80-20 rule. Why? Well, because looking at the data reveals so much about the business and where the energy leaks are located.

In fact, there is ONE data point in particular that ALWAYS tells me exactly how effective a business is at its core, and it’s the amount of time that gets spent on new projects vs. recurring tasks. In other words, is the business able to consistently support ongoing areas of operations at a high level?

The unfortunate reality is that 80% of business owners spend 20% of their time on maintaining and fulfilling their offers, when it really should be the other way around. The 20% of business owners that spend 80% of their time in their zone of genius are the ones that survive.

Let’s dive deeper into this important point.

The 80-20 Rule Reveals Your Effectiveness

An effective business spends 80% of its energy, time, and resources on its areas of operations, meaning maintaining and fulfilling the offers and promises it has made to its clients.

Examples:

• Sandwich shop? You should be making and selling sandwiches 80% of the time
• Freelance Writer? You should be writing articles 80% of the time
• Project Manager? You should be managing projects 80% of the time
• Photographer? You should be spending 80% of your time shooting and delivering images
• Content creator? You should be creating and compiling content 80% of of the time

You get the idea.

Whatever your genius (a.k.a. money-making) zone happens to be, that’s where you should be spending the majority of your time. The other time – 20% or so – can be spent on administrative work, improvement projects, etc. That’s how you know you have an effective business established.

You might wonder: “Wait a minute! Shouldn’t it be the other way around? Doesn’t the 20% fuel the 80%?”

Well, yes, but in terms of systems and operations, it’s actually like this: the 80% you spend on maintenance and fulfillment is what lets that other 20% really shine and return a new 80% ROI back to your business. Without being clear on your offers and what supports them, you end up choosing the wrong projects to focus on. It’s a loop.

The Illusion of Busyness = The Illusion of Business

When I speak to overwhelmed business owners, or even business owners who just want to work less but aren’t able to, it becomes painfully obvious that they’re doing the exact opposite as what I stated in the former paragraph. They are spending 80% of their time on admin tasks, new projects, and things that don’t really matter… and (at most) 20% of time in their genius zone. This is exactly why they’re overworked. Shiny object syndrome is often to blame.

An overwhelmed sandwich shop is likely only selling sandwiches 20% of the time. A content creator who isn’t happy with the growth of the following is probably only spending 20% of time making content. What are they doing the rest of the time? It doesn’t matter. It’s not in their genius zone, and that’s why the results are poor. They are simply doing other types of tasks – tasks that don’t actually move anything forward. We call that “the illusion of busyness.” You can also read that as “The illusion of business.”

If you want work-life balance, you have to understand two things: 1 – your zone of genius, and 2 – how to stay in it. The owner of an effective business would know the answers if I asked those questions.

Indecision > Insecurity > Instability

There could be plenty of reasons why a business owner spends time in places other than the genius zone, but it often has to do with insecurity around decision-making in combination with one of the main pillars of work-life balance: time, money, or energy.

“I don’t have the time” is a classic phrase, but when we dig into the numbers and have an honest conversation of what’s going on, there’s often more to it. Having “enough time” is a reflection of how time is prioritized. If you look objectively at a sandwich shop that doesn’t sell sandwiches more than 20% of the time, you’d naturally wonder what’s going on…right? Doesn’t that seem a little odd? For you to run a truly effective business, you have to put that objective hat on, think, and be honest about how you spend your time.

Business owners in stretched situations tend to constantly question their decisions around offerings, how they are fulfilling those services, and what tools they use to do so. That indecision fuels insecurity, which fuels constant change….and if things are always changing, we can’t automate anything. We need stability. A truly effective business runs on stability.

How to Fix an Imbalanced Business

If this hits a little too close to home, take a deep breath. It’s OK. The shock that comes with the realization that you’re in opposite land is often a bit heavy. I see it as a positive though, and I’ll tell you why. It’s a wake up call that needs to happen for the needed change to come about. We we can identify a problem, we can hunt for a solution. Now we know what to fix.

So how do you fix ineffective imbalance in your business?

In one word: systems.

Systems are what make any business run, and if they aren’t present, you – as the business owner – have to carry the load. That load is very heavy, and will lead only to burnout. Slowly, but steadily, we have to implement systems for you business that will allow you to work your way up to the optimum level, meaning 80-20.

Working Towards Running an Effective Business

You won’t be able to run an effective business overnight. It will take some time to get there, and that’s OK. As with everything else, we have to start small and work at it for a bit. We need to practice.

Attempting to achieve an 80-20% ratio right off the bat would be too difficult, so I tend to suggest that people shoot for 60-40 overall. That’s a much less intimidating goal, but even that’s a lot sometimes. It’s perfectly fine to start with 50-50 or even lower. Remember – your starting point is only that – a starting point. Eventually, you get to 60-40, then 70-30, and finally all the way.

Outsourcing is a great example of how to begin. You don’t have to hire someone full-time right away. Perhaps you can delegate one task on a part-time basis? or maybe something even smaller just for an hour or two? Then you can take that hour (or two) and turn it into genius time for yourself.

Each Level Fuels the Next

The more time you spend in your genius zone, the more energized you will feel. Your genius zone is where things are easy. There’s less friction. It’s where YOU thrive because it’s work that fuels your spirit and makes you money at the same time.

That’s why – with each new level – you will start to feel significant relief. Empowered with that newfound freedom, momentum will take over. Then there’s no going back. The snowball has been created. Once you get started, I know you’ll want go all the way because time will start to free up. So will energy. And then, the money will follow as the shift takes place. As I mentioned before, if you can at least 60% of your time spent correctly, you’ll feel a significant different in your work-life balance. The rest will work itself out from there. Promise.

Are You Running a Truly Effective Business?

Now, I’d love to know: After reading this, what stood out to you? Where does your business land? Are you running a truly effective business, or are you simply masquerading  “busyiness”? Let me know in the comments below, so I can better help you achieve your goals.

As always, if you want more direct help, I invite you to join me in Creative Systems Architect, my online course on how to run a truly effective business by leveraging systems and operations. An effective business is key to work-life balance, and that’s what I want for every entrepreneur. That’s when we can truly make an impact. And besides – it’s never to soon to start making the shift toward better work-life balance.

Wouldn’t you agree?

Featured Photo Courtesy of JEESHOTS

• About the Author
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Caroline Guntur Organizing & Productivity Coach

Hi there! I’m Caroline, and I’m here to help you get organized and be more productive, so that you can live better and have time for what matters.

www.theswedishorganizer.com

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