There’s something called the Pareto principle. You may have heard it mentioned as the 80/20 rule.
The idea behind it is that 80% of your results will be achieved by 20% of your work. Most business owners find this concept to be true, often realizing that 80% of their income is generated from just 20% of their work.
When Rachel heard about the Pareto principle, she took a hard look at her digital business. She asked, “Is the remaining 80% of my work essential?”
Know Your Branches
Rachel started by defining the different branches of her business. She offered web design services to some clients. She also ran a web hosting company. She designed book covers for authors (many of whom also had her design their sites) and taught a DIY course on Canva.
All of these branches were contributing to her income but some were more profitable than others.
If you examine your own business, you may find that you also have multiple branches with different levels of income.
Prune Your Branches
When Rachel noticed her business branches, she wrote down how much income she’d earned from each one in the last year. Her two least profitable branches were the DIY course on Canva and the book cover design. She made a decision to stop offering the book design service and instead refer her clients to another book designer. (She decided to keep the Canva course and you will see why below.)
Once you have an idea of your profitable branches, you’ll want to consider if some of them need to be pruned. As you organize your branches, be sure to write down how much each is earning you as well as how much time you’re spending on it. That’s because sometimes, you may want to prune a branch that’s profitable but taking up too much of your time.
Focus on Your Branches
Rachel had two branches that weren’t earning as much—her DIY course on Canva and the book cover design. She easily let go of the book cover design. But Rachel didn’t let go of the Canva course. The reason she didn’t is because the course aligned with her goal—to create more time freedom in her business. She wanted to stop working for as many clients and instead leverage that branch so she could have more time to spend with her family.
The amount of income a branch brings in should never be your sole consideration. You should also take into account what your business goals are.
Then ask yourself, “Is this branch bringing me closer to my goal or further away?”
Ideally, branches that aren’t in line with your goals should be the first you prune. However, there may be a reason that you leave a branch in place temporarily. For example, Rachel left her web design branch intact. Although she wanted to shift her business to a product model, she was still earning the majority of her income through her services.
The Pareto principle is a great way to look at essentialism. By eliminating business branches that are no longer a good fit or that aren’t in line with your goals, you’ll be able to focus on the branches that truly matter.