Have you ever heard of the Pareto principle, or the 80/20 rule? It’s the idea that 80% of results come from just 20% of your efforts. In other words, a small percentage of what you do has the biggest impact—whether it’s gaining clients, growing revenue, or expanding your network.

As an entrepreneur working in a coworking space, you juggle countless tasks—meeting potential clients, refining your pitch, marketing your business, and handling operations. But not all efforts drive equal results. Maybe 20% of your networking leads to 80% of your business opportunities. Or a small portion of your marketing efforts generate the most engagement.

The key is to identify what truly moves the needle and focus your energy there. Prioritize the connections, strategies, and tasks that yield the biggest returns. By applying the 80/20 rule, you can work smarter, not harder—making the most of your time, resources, and coworking environment.

What Is the 80/20 Rule?

At its core, the 80/20 rule is a time management strategy. Also known as the law of the vital few, it was developed by Italian economist Vilfredo Pareto in 1906. One of his books, Cours d’économie politique, stated that 80% of Italy’s land was owned by only 20% of residents. 

A few years later, engineer Joseph M. Juran applied this principle to quality control. Based on his findings, 80% of quality issues were due to 20% of causes. Today, the Pareto principle is widely used in marketing, management, economics, and other areas, such as fitness and personal finance. 

For example, you may realize that 80% of your sales come from 20% of your customers. Or that 20% of what you do in the gym accounts for 80% of your gains. 

How to Apply the 80/20 Rule in Business 

Business owners can use this principle to prioritize the 20% of activities or factors that yield the most impactful results. Depending on the context, you should focus on:

  • The 20% of marketing processes that drive 80% of leads or conversions
  • The 20% of products that generate 80% of sales revenue
  • The 20% of website pages that attract 80% of traffic
  • The 20% of business processes that cause 80% of inefficiencies
  • The 20% of suppliers who provide 80% of the materials you use
  • The 20% of customers who account for 80% of total profits

Once you have identified the 20%, you should deploy resources where they are most needed. This approach can boost your productivity, reduce costs, and increase profits. 

Without further ado, here’s how to use the 80/20 rule to level up your business. 

Focus on High-Value Clients 

For many companies, 20% of their profits come from 80% of their clients. Some customers make repeat or high-value purchases, while others are occasional buyers who place small orders. 

What you should do is prioritize those 20% of shoppers who bring the most value to the table. 

For example, you could reward their business with freebies, gifts, special discounts, or free access to exclusive events. Another option is to launch a loyalty program tailored to their needs. 

To identify these customers, check your sales data, email open rates, and website analytics. Then come up with a strategy to nurture them and keep your brand top of mind. 

Ditch Your Problem Customers 

Next, ditch the 20% of clients who waste your time or complain about everything. For instance, most businesses have one or more customers who ask a million questions about a product or service but never buy anything. Or customers who repeatedly return items for no obvious reason. 

Simply let them know they’re not a good fit for your business. Be polite and professional about it, or they might badmouth your brand. 

Identify Your Most Profitable Products or Services

If 20% of your products account for the majority of sales, allocate more time and resources to them while phasing out underperforming items. 

First, review your sales data to see which products generate the most revenue. After that, focus on improving their features or promoting them to a larger audience. 

Let’s say your top-selling product is a handcrafted leather bag. Here’s what you could do to increase your profits:

+Highlight the bag on your homepage

+Feature it in newsletters, social media posts, and YouTube videos

+Start a pay-per-click (PPC) campaign revolving around the bag

+Launch new versions of the bag (e.g., the same model in a different size or color)

+Publish guest posts on fashion and lifestyle websites or blogs 

You could also write a series of blog posts and link to the product page. This would allow you to tell the story behind the bag, highlight its uniqueness, and guide customers in their buying journey. 

Retain Your Best Employees

Identify the 20% of your highest-performing employees—and give them the environment they crave. This could mean investing more in their training, rewarding their work, or even promoting them to management. 

Simply put, provide them with the resources they need to thrive in their roles and stay with your business. 

According to a survey of 200,000+ employees, top performers have very specific expectations in the workplace. For example, 5.4% of them said they want the opportunity to develop their skills through ongoing training and constructive feedback.

This doesn’t mean you should ignore your other employees. On the contrary, ensure they have access to mentorship programs, skill-building courses, and other opportunities to better themselves. 

Analyze and Improve Business Processes 

Review your core processes to identify the 20% that drive 80% of the results. Next, allocate more of your time and resources to them so you can achieve continuous improvement. Consider using ready-made website templates to streamline your web development process, saving time and resources that can be redirected to more impactful tasks.

Take SEO, for example. If you have a business website or blog, you likely spend hours creating content, optimizing images, building links, and so on. 

After a thorough analysis, you may realize that optimizing your blog posts for keywords with low search volume is a waste of time. Or that you’re spending too much time building links to pages that don’t serve user intent. 

Document these processes and their impact on your key performance indicators (KPIs) to see what works and what doesn’t. Then focus on those that make the biggest difference in terms of traffic, conversions, ROI, or other KPIs. 

Get Things Done Faster and Better with the 80/20 Rule

The 80/20 rule can be applied to just about every area of business, from marketing and SEO to product development. Depending on your needs, you can use it to improve product quality, make investment decisions, handle customer relations, and much more. 

For example, top-performing marketing teams leverage this principle to determine which channels drive the best results. Software developers, on the other hand, can apply the 80/20 rule to figure out which features of an app matter most. If you’re an investor, focus on the 20% of asset classes with the highest returns. 

Note that implementing the 80/20 rule requires ongoing work. It’s not a one-time thing but a long-term commitment to improvement. 

Start by applying it to one or two business processes; measure the outcomes and make further changes as needed. Implement it on a larger scale as you learn the ropes and gain more insight into your customers, sales performance, and other areas.