The 80/20 Rule

by Thom Tracy

0 min read

The 80/20 rule, also called the Pareto principle or the law of the vital few, states that approximately 80% of the effects come from 20% of the causes. To put it another way, 80% of the output comes from 20% of the inputs. This relationships holds true in economics, business, software, sports, and a wide variety of other areas.

In business, 80% of the profits often come from 20% of the products, or 80% of revenues may come from 20% of the clients. Do an 80/20 analysis on your revenues so you can identify time-wasting products or clients and take appropriate actions.

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