174. The 80/20 Rule Applied to Coworking Businesses

IN THIS EPISODE, I DISCUSS:

It’s easy to be really busy all day long in a coworking business and not get the right things done.

It’s even easier to pay your team to be in the space all day and not get the right things done.

What are the right areas of focus?

How much time should you and/or your team focus on them in a given day?

Let’s approach this question using the 80/20 rule.

The 80/20 rule was originally called the Pareto principle. The Pareto principle states that for many outcomes roughly 80% of consequences come from 20% of the causes (the “vital few”). (source: Wikipedia).

Here are some examples of the 80/20 rule (all sourced from Wikipedia).

The Pareto principle also could be seen as applying to taxation. In the US, the top 20% of earners paid roughly 80-90% of Federal income taxes in 2000 and 2006, and again in 2018.
In computer science the Pareto principle can be applied to optimization efforts. For example, Microsoft noted that by fixing the top 20% of the most-reported bugs, 80% of the related errors and crashes in a given system would be eliminated
In baseball: 15% of all the players last year produced 85% of the total wins with the other 85% of the players creating 15% of the wins
In health care in the United States, in one instance 20% of patients have been found to use 80% of healthcare resources.
Many video rental shops reported in 1988 that 80% of revenue came from 20% of videotapes.

And finally, more relevant to our discussion...It is an axiom of business management that "80% of sales come from 20% of clients.”

We might also assume that 80% of our leads come from 20% of our sources:

20% of our members will be very engaged in our community while 80% will be less so.

20% of our members will drink 80% of the coffee.

20% of our virtual mail clients will produce 80% of our mail.

What are the 20% of activities in your coworking business that drive 80% of your results ?