2016-12-21 00:00:00ProductivityEnglishLearn about the 80/20 rule, also called the Pareto principle, and how to use it to analyze certain aspects of your small business.https://quickbooks.intuit.com/ca/resources/ca_qrc/uploads/2017/03/business-owner-calculates-profits-using-the-80-20-rule.jpgThe 80/20 Rule

The 80/20 Rule

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The 80/20 rule, also called the Pareto principle or the law of the vital few, states that approximately 80% of the effects come from 20% of the causes. To put it another way, 80% of the output comes from 20% of the inputs. This relationships holds true in economics, business, software, sports, and a wide variety of other areas.

In business, 80% of the profits often come from 20% of the products, or 80% of revenues may come from 20% of the clients. Do an 80/20 analysis on your revenues so you can identify time-wasting products or clients and take appropriate actions.

References & Resources

Information may be abridged and therefore incomplete. This document/information does not constitute, and should not be considered a substitute for, legal or financial advice. Each financial situation is different, the advice provided is intended to be general. Please contact your financial or legal advisors for information specific to your situation.

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