Pareto Principle: How to Use it to Grow Your Freelance Business

The Pareto Principle was originally used to describe the uneven distribution of wealth in Italy. Later on, many observed this similar phenomenon in their own areas of expertise such as in business management.

Also known as the 80/20 rule, the principle expresses that that a minority of efforts usually lead to a majority of the results.  As a freelancer, if you can determine the tasks which produce the best business results, you can increase your ROI with just a few steps.

Start by applying Pareto’s 80/20 principle to the following areas of your business:

Clients

Do you have recurring clients who provide work each week, or do you take on mostly one-off clients that require a lot of discussion back and forth about salary, work terms, etc.?   Ask yourself which kinds of clients offer the most rewards for the least amount of effort and focus on finding more of this type of client.

When you find quality clients, go the extra mile and develop a close relationship with them.  Don’t be shy to come to the table with suggestions of things you can do to help them improve.  Also, ask for leads on other quality clients.  With a bit of work, you can turn one time clients into return customers, saving you a lot of time and increasing your profits.

Correspondence

If you are a full-time freelancer, you’ve probably experienced a lot of bargaining about rates/ services. You can speed up the negotiation process by offering potential clients answers to frequently asked questions in your initial correspondence.  Include answers to common questions like a breakdown of your rates for various types of work, available payment methods, contact information, working hours, etc.

Another way to cut down the back and forth is to be upfront about your rates and have them highly visible on all freelancer profiles, website, online portfolio, etc. This strategy will eliminate discussion with clients who want to pay less than the rates you deserve.

Daily Tasks

Spend a week or two logging your time, categorized by task. Once you’re done, create a pie chart to see where all your time goes. You may notice that about 80% of your working time is spent answering emails, writing to-do lists, posting on social media outlets, sending invoices, and tracking finances while about 20% of your time is spent on actual freelance work.

Take a moment to consider which tasks can be eliminated or automated.  Do you really need to check your email every hour, or can you schedule 3 specific times a day to accomplish this task?

The Pareto Principle is very useful in analysis, troubleshooting, decision making, and planning. Its value reminds freelancers to focus on the 20% of your effort which matters most. It’s not just working smart but working smart on the right things.

What are the tasks that provide you with the most ROI?  Let us know in the comments below.