Friday, February 6, 2009

The Pareto Principle

Firstly, my apologies for taking so long to post! There have been quite a few life changes in the last couple of months for Carly and myself- times are busy sisters!

About a month ago, I stumbled upon something called The Pareto Principle while I was studying marketing techniques. Wikipedia describes The Pareto Principle as this:

The Pareto principle (also known as the 80-20 rule, the law of the vital few and the principle of factor sparsity) states that, for many events, roughly 80% of the effects come from 20% of the causes. Business management thinker Joseph M. Juran suggested the principle and named it after Italian economist Vilfredo Pareto, who observed that 80% of the land in Italy was owned by 20% of the population.[3] It is a common rule of thumb in business; e.g., "80% of your sales come from 20% of your clients."

They go on to say (for perspective):

The Pareto Principle also applies to a variety of more mundane matters: one might guess approximately that we wear our 20% most favored clothes about 80% of the time, perhaps we spend 80% of the time with 20% of our acquaintances, etc.

The Pareto principle has many applications in quality control.[citation needed] It is the basis for the Pareto chart, one of the key tools used in total quality control and six sigma. The Pareto principle serves as a baseline for ABC-analysis and XYZ-analysis, widely used in logistics and procurement for the purpose of optimizing stock of goods, as well as costs of keeping and replenishing that stock (Rushton et al. 2000, pp. 107-108).

In computer science and engineering control theory such as for electromechanical energy converters, the Pareto principle can be applied to optimization efforts. (M. Gen & R. Cheng, Generic Algorithms and Engineering Optimization. New York, Wiley, 2002)

Microsoft also noted that by fixing the top 20% of the most reported bugs, 80% percent of the errors and crashes would be eliminated.

The Pareto principle was a prominent part of the 2007 bestseller The 4-Hour Workweek by Tim Ferriss. Ferriss recommended focusing one's activities to those 20% that contribute to 80% of the income. More notably, he also recommends firing the 20% customers who take up the majority of one's time and cause most trouble.

(On a side note: Four Hour Work Week will be our next give away on March 15th- you must be a follower by the 1st to be in the drawing).

So what does this mean? How can we use this to make our business more efficient? Let's put it to the test (Keep in mind please that this is a VERY basic scope of how this can work for you.)! This is going to be different for every business out there. Carly and I spoke about the 20% of clients that bring each of us the most income. To get to that conclusion, you must first make a list of the types of clients you receive. Be as specific as possible. For example (using our tree business- your list may be completely different):

1. Clients in urban and suburban areas

2. Clients in rural areas

3. Men clients

4. Women clients

5. Clients who find us from Craigslist

6. Clients who find us through fliering

7. Clients who find us through our website

8. Clients who find us through word of mouth

9. Homeowners

10. Land developers

Now in practice, you should be literally writing down every client you've ever had and where you've found them. We will use my ten above as a test- though we get clients from more than 10 sources.

From the ten sources above, the principle states that two of them deliver 80% of our clients. The top two on that list for us are clients in rural areas, and clients through word of mouth (very specific word of mouth/ generally professionals in the tree business that do not do quite what we do, and therefore send clients our way).

So now we have a starting place. We need to focus more of our energy and advertising dollars on clients in rural areas and clients through word of mouth. We have to start getting creative about how this can work. Off the top of my head- we can take out an ad in rural newspapers. We can do fliering in rural areas (where so far our fliering has been in suburban areas). I have a very specific idea for how to create more word of mouth leads: cold calling tree businesses that I know don't do what we do. Then we can offer a finders fee for any leads they send our way, or offer to send the clients that contact us regarding what they do their way. I am leaning towards the former, because I will hopefully end up with quite a few professionals offering to send clients our way. If that's the case, I can't in good conscience promise them each that we'll send clients their way since there'll be more than one of them.

Another spin off from the Pareto Principle is Six Sigma. Six Sigma is process improvement for the sake of your business.

From Wikipedia:

Six Sigma is a business management strategy, originally developed by Motorola, that today enjoys widespread application in many sectors of industry.

Six Sigma seeks to identify and remove the causes of defects and errors in manufacturing and business processes. It uses a set of quality management methods, including statistical methods, and creates a special infrastructure of people within the organization ("Black Belts" etc.) who are experts in these methods. Each Six Sigma project carried out within an organization follows a defined sequence of steps and has quantified financial targets (cost reduction or profit increase).
Read more in depth here:

I have also come across an online book called "Six Sigma For Small Business" that you can download for more in depth learning.

So now you have an idea of how you can use process improvement to advance your business. This is a topic that a gajillion books have been written on, so I feel almost silly posting something so remedial, but my hope is that it will make your thirst for more information grow and you'll get out there and figure out how to make this work for you!!!!

Godspeed ladies!

Thursday, January 15, 2009

Announcing the winner!

Congratulations to Taradactyl in the Modern World, winner of the Style Statement workbook drawing! Email your mailing address to and we'll send it out!

Please contact us by January 30th or we'll have to choose another winner.

Friday, January 9, 2009

Manifesting Money and Prosperity (Yes! In This Economy!)

My thought process about life has changed drastically in the last couple of years or so. There have certainly been times that I've felt I didn't have enough. I have heard so many people say that business is slow because of the economy and their outlook is one of fear. They feel they will not succeed in present times.

My dad's catch phrase is: "Your Focus Determines Your Reality" He actually stole it from Star Wars, but it has still got to be one of the most brilliant things ever spoken. When he began saying it, I just passed it off as another one of his things that he says (and if you knew him, you'd know he has quite a few little sayings that he pulls out of his back pocket from time to time). As time went on, it sunk in deeper, and deeper, and deeper.

I began studying the Law of Attraction (LOA) over two years ago, and I am a believer. You are all probably believers and don't even know it. If you're a part of any religion or follow any spiritual teachings, there is a theme. Pray/cast spells/ perform rituals/ whatever it is that you do, and be FAITHFUL, and it will come to you. Ask and it is given. That is it. That's all there is to it. It sounds so simple, and yet your focus determines your reality. If you are focusing on a bad economy where you cannot thrive, guess what you get? A bad economy where you cannot thrive.

Practice being mindful of your thoughts, the things you speak, and the things you write. Keep your focus on the fact that there are still people out in the world with jobs that are still buying things (yes, even your product or service!!!) Focus on any incoming money you have, rather than outgoing money (hello tax returns!). Focus on the things that make you feel prosperous. Do you even know what makes you feel prosperous? Maybe that's a good place to start.

Here's a few resources for you deserving and powerful business women:

Multiple Streams of Income

The was written by my friend Melanie on her website: Aim for Abundance! Please feel free to peruse her site, I have a feeling you'll leave with inspiration.

Money and the Law of Attraction by Jerry and Esther Hicks (currently on sale- woot!)

Subscribe to the Everything LOA E-zine for tips in your email box.

A great video on "flowing downstream with money" here.

You can also join the discussions on money manifestation at The Wise Ways of Women.

Keep your vibe prosperous, and remember, your focus determines your reality!!!

Carly adds: My personal favorite is The Power of Positive Thinking, as it's more Bible-based, which is my faith preference. :-) When I started listening to the book on CD on my way to client appointments my sales skyrocketed! Believe it and receive it!

Monday, January 5, 2009

What's Your Style Statement?

Meet a workbook designed to shake you out of the things you've settled on (career, fashion, friends, home, etc.) and help you focus your intentions on what is truly right for your unique life. Is there any more powerful choice than to be authentic in every move you make?

You know the choices that you've made that bring you joy? Becoming friends with the right person, ditching a job that didn't fit, finding the dress that was exactly "you", art that grabs you by the eyelashes and won't let go? Take the time to discover your Style Statement and you'll find yourself making a lot more of those perfect choices. In Style Statement: Live By Your Own Design, you can take a profoundly fun journey to find the two words that represent who you are!

At first blush, it may sound over simplistic, self-absorbed, pretentious... but keep an open mind. I've started applying it to my life and already it's helping me to not only make wiser buying decisions but also to understand why I love what I do. There's also the added bonus of finding a newfound appreciation for yourself and what makes you tick.

Journeying through the many thought-provoking questionnaires and examples of others who've found their Style Statement, I found myself surprised by my own answers. I must have forgotten how much I yearn to travel, love sharing information, and want to wear dresses. (Dresses? Me? Really?).

The more true to your desires you are, the better able you are to fully love your life and make empowered choices. This is so incredibly important both for your business life (Seriously, why spend the majority of your waking hours doing something you don't find fulfilling? No excuses!) and for your personal life. It's important to be the fully realized version of yourself, especially if you have sweet impressionable children learning from your every move.

The book also has a "Lifestyle Map" which can be very helpful in keeping your goals balanced when putting together a visualization board/ Treasure Map. (We'll be discussing Treasure Maps in March).

I highly recommend working through the Statement slowly and mindfully. Relax and let it come naturally for the best result. Also, don't worry about what others think about your style statement. It only has to please you.

I enjoyed this book so much I gave it to all my girls for Christmas. Now we'd like to gift you with your own copy! We'll be randomly drawing one follower on January 15th. If you'd like to be included in the drawing please join our followers. We'll be doing a different giveaway each month!

Also available for purchase in our Amazon store.

(If you're curious, my style statement is Designed Celebration, and Dani's is Magical Visionary.)

Wednesday, December 10, 2008

Holiday Hiatus!

Hello brilliant ladies! Just a quick hello to let you all know we have not forgotten you, but are taking a short break for the Holidays. Beginning in January, we will have our first book give away!!! The first book will be Style Statement by Carrie and Danielle. Carly will be doing a book report at the first of the month so that you all know just how fabulous it is. Please stay posted for our very first give away, as well as more fantastic business and parenting ideas to come!!! We'll be back shortly-

Here's to a rockin Christmas and a prosperous New Year!!!!!

Edited To Add: If you would like to take part in our first free book give-a-way, please sign up as a follower. We will be drawing our winner from that group. Good luck!