The 80/20 Rule, also known as the Pareto Principle, states that 80% of results often come from just 20% of actions. In business, this could mean 80% of revenue comes from 20% of customers, or 80% of problems stem from 20% of causes. Understanding and applying this principle helps businesses focus on what truly matters and make smarter decisions.

What is the 80/20 Rule?

The 80/20 Rule originates from Italian economist Vilfredo Pareto, who noticed in the early 1900s that 80% of Italy’s land was owned by 20% of the population. Over time, this principle proved to apply across many disciplines and business is no exception.

In business, the 80/20 Rule can look like:

• 80% of profits coming from 20% of products or services
• 80% of complaints coming from 20% of customers
• 80% of productivity coming from 20% of staff effort

While it’s not always exactly 80/20, the rule highlights imbalanced cause-effect relationships that impact results.

Why the 80/20 Rule Matters for Businesses

At Josty, we’ve seen many small-to-medium businesses (SMEs) stretch themselves too thin by focusing on everything instead of what delivers the most value.

Using the 80/20 rule allows business owners and managers to:

✅ Prioritise the high-impact activities
✅ Reduce time and resources wasted on low-value tasks
✅ Make smarter strategic decisions
✅ Accelerate growth with less effort

How to Apply the 80/20 Rule in Business  

1. Customer Insights

Identify your top-performing customers, those who generate the most revenue or repeat business. Focus your marketing, service, and loyalty efforts on them.

2. Product/Service Analysis

Which 20% of your offerings drive 80% of your revenue? These are your heroes. Invest in improving, upselling, or expanding those.

3. Time Management

Where do you or your team spend time that doesn't drive results? Eliminate or delegate those low-return tasks.

4. Problem Solving

Instead of solving every issue equally, find the few root causes that generate most of your challenges. Fix those first.

5. Sales Strategy

Train your sales team to focus on high-potential leads. Don't chase every deal, chase the right ones.

80/20 in Action: A Real Josty Insight

A regional services business was drowning in admin, slow growth, and constant firefighting. Through a Business Review and applying the 80/20 principle:

• It was identified that 3 core services responsible for 85% of their revenue
• Discovered 2 clients that took up 40% of their resources but delivered under 10% of margin
• Helped reallocate time and marketing to their top client segment

Within 6 months, the business had reduced stress, increased profitability, and had clarity around growth.

Final Thoughts: Less is More

The 80/20 Rule is not about doing less, it’s about doing what matters most. In today’s fast-paced environment, strategic focus is your edge.

At Josty, we help businesses identify the few things that make the biggest difference. Whether it’s through business planning, sales strategy, or operations support — clarity and focus lead to sustainable growth.

➡️ Ready to find the 20% that will change your business?

Get in touch with us

Post written by Jason Jost