Getting paid: The 80/20 rule

We all want to find a way to work smarter, not harder right? How often do you come home to a mountain of quoting and admin work after a hard day’s work and you think to yourself, “There has to be a better way!”

Understanding how the 80/20 rule applies to your business, whether you are a plumber, electrician, builder or anything in between, can not only help your bottom line, but also contribute to significant business growth!

Applying the 80/20 rule works in a few ways:

  1. 20% of your customers generate 80% of your net profit;
  2. 20% of the goods or services you sell contribute to 80% of your revenue, and;
  3. 20% of your staff create 80% value for your customers.

Study your business

Who are your top 20 per cent clients that generate 80 per cent of your profits? Or on the flip side who are the clients who are a constant headache? You find yourself revisiting your quotations several times, they complain throughout the project and you may even need to revisit the job to complete work that wasn’t even in the scope! That is the 80 per cent of client contact which makes up 20 per cent of your profits!

The 80/20 rule highlights what is important and what is not, and places emphasis on not sweating the small stuff (or the clients you should really cut loose)

If 80 per cent of complaints are coming from 20 per cent of your customers, instead of turning yourself inside out trying to please them, wouldn’t it be better to focus on the customers who love your work and contribute to your profits? Focussing on the customers who provide you with most of your profits by finding new ways to assist them will provide longer customer lifetime values and more referrals and repeat business. This is how the 80/20 rule works in your favour.

Twenty per cent of your tasks will bring 80 per cent of your results, so focussing on that 20 per cent becomes your top priority. If you have time left over in your day, you can get started on the other 80 per cent.

Practice makes perfect

The 80/20 rule is not about doing less work. It’s about establishing the most valuable areas in your business and fine tuning your focus on them.

Everyone is time poor. But instead of wishing for more time in your day, why not use your time to only do the most important things?

When you start to adopt the 80/20 rule, you will notice that you have time left over – your work quality and productivity will be higher. Enabling you to prioritise your day like never before. All because you know all the essential actions that will help you get the best results. The best part of using the 80/20 rule in your business, is that it is repeatable and cumulative. The more you repeat it, the more value you get!

Tracie is Managing Director of TAE Projects, delivering commercial refurbishment projects, predominantly in the accommodation sector. Tracie is also the Founder & CEO of Renovators Directory, an online platform bringing the entire home improvement sector together Australia-wide. Learn more at