The Economy: Maximizing the 80 / 20 Rule...With a Twist.

With the recent slowing of the economy in most major sectors (minus a few exceptions) how are we going to – spring back to life? Should we “wait” for someone else to act, so that we can eventually hop on the bandwagon? Or, are we going to be the ones who get our ball rolling? And, you already know the dangers of “waiting” for everything to upright itself. This really only happens when we – get going! So, let's take a little pause to see what we can do in our neck of the woods to clear a path, ahead. To do this, we’ll use the 80 / 20 rule with a twist…

In an economic downturn, there is simply not enough money going out – to come right back in. And, visa-versa. It’s the balance between these two places that causes the economy to come to a halt. It doesn’t matter if it’s in a specific market, or if it’s affecting the world at large. This dynamic always has to start and end somewhere, before it gets balanced. So, the world’s economic situation has many levers; but the relationship dynamics underneath of those are very easy to understand:

To move ourselves into a higher gear, we simply have to be aware of what’s happening underneath. Then, we can do our part – in our business – to push that drag, along…

If customers have enough to keep on spending, then – we’ll have more in our pockets, too. If they don’t, eventually our numbers will be going down, as well. In the most polite terms, this comes down to “passing the buck.” This phrase is often used in a negative nature, but at the heart of it; that’s exactly what we’re all doing to make our lives and the economy – work. That’s the rhythm of it: Back and Forth. Two ends of the same string. And, if you think you’ve found a way to make your wheel or string move ahead easier – good for you! Or, you can come up with another idea that’s based on this framework. To leap from where you are now into something better, simply remember those two ends. With my 80 / 20 suggestion, you can start here and adjust the specific ratios, as you go along…

At the end of each quarter, take the net gains you have (minus operating costs) and keep 80% for yourself. That’s your gravy. Take 10% to reinvest in your business – where the customers and employees are. This could include: a raise, supplies, incentives, sales, new products – you get to choose. But remember, the more money they have – the more they’ll be spending. (And, this works for outside businesses, too. Since your customers are someone else’s employees, see how this directly affects you, as well?) We’re all contributing to how much money we’ll have at the end of the day. So, take the remaining 10% and put that into what’s outside of your business. This could be a charity, an environmental cause, or it could be an outside investment into another business, perhaps. That way, you hold onto a very large percentage of what’s yours, and you’re also helping to keep what’s outside of you – alive and well. This is also keeping you in business. (Remember that string?)

A healthy, profitable and sustainable business – means that you’ll keep the relationship to what’s there and around you – thriving! In doing so, not only will you keep what you’ve worked very hard to build up with you, but you’ll also be maximizing the larger equation that keeps it this way…

In a world that would love to see a massive jump in positive gains – emotionally and financially, we can “wait” for others to do it and hopefully we’ll benefit from it, someday. Or, we can be the leaders in our field to get the ball rolling, again.

We can always adjust what we’re doing in our business, of course. However, to maximize gains we have to be willing to do what we can – right where we are now…Regardless if we’re on the upswing or the downturn. That’s all anyone can do…

So, let’s get going – shall we?