Have you heard of the 80-20 rule, also known as the Pareto Principle?
Named after the Italian economist Vilfredo Pareto who observed that “ 80 percent of the land in Italy was owned by 20 percent of the population”, the principle says that 80 percent of the consequences comes from 20 percent of the cause.
The 80- 20 rule can also be applied in other areas — from investments to software development, including how to improve your personal productivity, finances, as well as businesses.
Let’s take a look as to how we can apply the Pareto Principle to your freelancing career.
Applying the 80-20 Principle to Your Workday
If we take a look at the Pareto principle and how it affects your work day, you will most likely come up with this conclusion: 20 percent of your work will earn 80 percent of your overall income.
Furthermore, if you try to breakdown your usual work day and assign the 20 percent to the “actual work” done, it would most likely look like this:
- 20 percent = actual work such as writing, coding, designing, etc.
- 80 percent = answering emails, thinking new ideas, tracking finances, cooking, workout, watching TV, making to-do lists, reading feeds, doing Facebook, etc.
Now that you are aware of what constitutes the 80 percent and if you’d like to implement the Pareto Principle, you can actually think about cutting on the tasks, projects, or chores within the 80 percent category. After all, some of these components do not contribute to your end goal, right? Eliminate and simplify.
Applying the 80-20 Principle to Your Clients
Tim Ferriss talked about this in his book, The Four Hour Workweek. His solution was to determine which customers/clients provide the least revenue and most number of complaints in businesses. He suggested that it will probably do you good if you let these clients go.
Same goes with your clients in freelancing. Say, you have 2 recurring clients who are very easy to deal with and pays you well. You probably do the entire 20 percent of your work for these clients. On the other hand, there is this third one-off client who eats up around 80 percent of your work and is a bit of difficult to work with — always changing the terms of work, a lot of revisions to be done, etc.
Are you sure you’d like to spend most of your energy to a one-off client who demands a lot yet pays poorly? Sit down and figure out how you can apply the 80-20 rule to the clients and projects you decide to take on.
In a gist, the 80-20 rule in online freelancing is all about focusing on what’s important (20 percent) and minimizing or eliminating what isn’t (80 percent).