Have you heard of the 80/20 rule of business?
I'm sure you have. I was freshly reminded of it, in a conversation
with a colleague the other day. And, it got me thinking...
A few years ago, researchers discovered a principal that seemed to
hold true across every industry - from sole proprietors to Fortune
500 companies - consumer behavior, administrative functions,
employee resources - they all are subject to this rule:
That 80% of results come from 20% of actions.
20% of your product line will be 80% of your sales.
20% of your time will bring in 80% of your revenue.
20% of your resources fund 80% of your profits.
This begs the question: what are those "80%" activities that are
responsible for the 80% of your profits?
Also, this means that all the rest of your efforts are only
affecting 20% of your profit.
Successful businesses have found that by focusing on the "80%"
functions, they can improve their bottom line very dramatically,
very quickly.
And, since it only takes 20% of the effort, improvements can be
made quickly and easily.
What are your businesses "80%" activities?
There is a big one that may surprise you.
It is your Accounts Receivable Department.
Many businesses are bleeding money out of their A/R department
because of outdated methods and out of control costs.
I wonder how much profit you could save just by making a few
simple adjustments.
Below you will find a couple of blog posts I've written that will
help you focus on the 80% that can reap huge rewards by boosting
bottom line profitability.
I think they will be helpful.
Drop me a line if they are, or if you would like to talk through
your specific company's processes to see how we can get that 80%
rule working for you.
Bob Blackburn
Managing Director
Cash Recovery Network
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