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The budding Turks
Raj K Pathak
The Budding Turks-80-20 rule for entrepreneurs 28 October, 2011
The 80-20 rule helps budding entrepreneurs to make dramatic improvements in profitability by focusing on the most effective areas and eliminating, ignoring, automating, delegating or re-training the rest, as appropriate.

WHILE WORKING with CyberMedia, I was driving SME CEO Knowledge Series-India’s biggest 360 degree countrywide media initiative to connect with SMEs across the country. Each time, I would get stuck with a decision to be taken, I would seek advice from my immediate boss Mr Krishan Kant Tulshan. Every time he would tell me to keep the 80-20 rule in mind. Over a period of time, I realised that the 80-20 rule is an important rule a budding entrepreneur should keep in mind all the time.

Entrepreneurship is all about wealth creation - so an easier way to understand 80-20 rule would be to know that “the richest 20% of the world's population controls 80% of the world's income".

The 80-20 rule shows up in several different aspects relevant to entrepreneurs. For example:

§  80% of your profits come from 20% of your customers

§  80% of your complaints come from 20% of your customers

§  80% of your profits come from 20% of the time you spend

§  80% of your sales come from 20% of your products

§  80% of your sales are made by 20% of your sales staff

However, let me caution budding entrepreneurs that the 80-20 rule may be easy to understand but is difficult to implement. One needs to first compile and then analyse the data to actually understand what constitutes 80% and what forms the balance 20%. Based on the data developed, a budding entrepreneur may make  dramatic improvements in profitability by focusing on the most effective areas and eliminating, ignoring, automating, delegating or re-training the rest, as appropriate.

About The Author
Mr. Raj K Pathak has been passionately promoting entrepreneurship through various media platforms for over two decades and is well known for conceptualizing and producing India's first Television show titled BUSINESS MANTRA for small business and entrepreneurship. Connect with the columnist: pathak560@gmail.com
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