What is 80/20?
As advisors to business, we see it on a daily basis. Companies are trying to grow. They develop products, they market, they advertise, they sell, they reinvest. As the company grows, it becomes more complex. Layers of cost are added to support that complexity. Their focus moves away from the original business as brand extensions are added. In short, their top line grows and their bottom line shrinks.
Complexity adds costs and eats into profits. Complexity is added to sales, administration, clients, products, vendors, policies, and facilities. As you grow, you become more susceptible to the 80/20 principle.
The concept underlying 80/20 is simple:
It is a fact. It makes no difference if you are a manufacturer, a contractor, or a law firm, the principle applies.
What we find is that companies do not spend enough time on the critical 20% of their key customers and products and spend too much time on the less important 80%.
Once you know who your top 20% are, you can begin to understand what drives your profit and where the true costs are in the business.
Our advisors eat, sleep and breathe 80/20. We have successfully implemented this concept in hundreds of businesses of varying sizes throughout many different industries. Our data-driven approach is free of canned recommendations. Many claim they know how to apply 80/20 in a business context; however, few can implement the concept properly.
In the first 12 months, our clients experience…
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