Have you ever wondered whether working for a particular client was really worth your time and effort? I bet you have. At some stage we all do. We toss up on the good and bad of working for this particular client. The good being instant gratification of income to pay the bills and the bad investing far too much time in return for pay.
Being in a situation like this can be enough to wonder what we did wrong during the initial negotiations. Did we perhaps under quote ourselves for fear of not landing the job, only to find that we would have been better off without it anyway?
Who was Pareto
The Italian economist Vilfredo Federico Damaso Pareto discovered a simple formula back in the early 1900′s that allows business owners to determine whether they are on the right track or not. The Pareto formula describes the unequal distribution of wealth in society and how it is acquired by a minority of the population.
The 80/20 Pareto law means that 20% of people control 80 % of the world’s wealth.
While the Pareto law refers to money and income, the Pareto distribution is applicable in many other types of observable phenomena, such as scientific, social and geophysical studies.
The Pareto law and effective business practice
As business owners we can eliminate a lot of unnecessary clutter that ties us down and hinders us from moving ahead by applying the Pareto law. A term frequently used in MLM is the 80/20 rule which in effect means to spend 80% or your time and energies with 20% of your team.
Applying this law to your business is a requirement if you are serious about not wanting to waste time with the wrong people or tasks.
Of all the tasks we perform each and every day, only 20% really matter if we are totally honest with ourselves. Those 20% are actually responsible for 80% of our results.
“80 percent of output is produced by 20 percent of input.” by
As you can see, it pays to look at this in order to become more effective at creating cash-flow.
How to determine on whether to sack a client with Pareto’s help
Ok, so we are not supposed to sack clients. After all they are our livelihood. While this sounds great in theory I disagree. I really don’t see the value of sticking with a difficult client just to get a bit of work.
I rather spend my time – and my energies working with clients that don’t behave like obnoxious, needy little pricks and move on. For lack of knowing, we don’t see this when we first start working with a client.
It is also hard to see which clients are producing the most income for us (and no, it isn’t always the one who pays best!).
So how can we determine whether working with someone really is beneficial for us?
By calculating data of at least 8 existing clients you will soon see on which client is most valuable to you and which ones can be sacked (especially if they annoy you).
The exercise will churn out some interesting information that might actually surprise you.
Doing this calculation will soon allow you to see whether your hunch has been right and help you to let go of your worrisome client in peace.
I’d love to know what you do, when a client annoys you to the brink of a nervous breakdown. Do you have some secret ninja method to get rid of him/her, or are you simply melting back into the ether’s of the Internet.