The results are in!

We are very proud to announce that the first NVSBS Weekend Business Challenge is officially over! Give yourselves some applause, because everybody who participated (even if they didn’t send in anything) should be proud. We thank you for being with us to witness the Weekend Business Challenge’s first step.

This week’s topic was the Pareto principle, or the idea that an average endeavor gets eighty percent of its results from only one-fifth of the time and money investment that it receives. This 80-20 rule concept is fairly simple. However, we asked you to think of additional applications for it, and think you did.

For starters, Nick quite succinctly stated his point of view on the topic in a comment, and I would like to share it with everybody else:

"In order to find the most productive activities I track every activity during the day. I use MS Outlook as a ledger of my business accomplishments. That helps me to spot ineffective activities, and timely terminate them.
Having a tracking system helps prevent such enemies of effectiveness as procrastination, lack of concentration, and lack of follow-up.
Also I have a fixed time blocks dedicated to activities which effectiveness is proven."

What an interesting insight, Nick, thanks! I guess Outlook isn’t such a useless program after all.

Our reader Inna, a PhD candidate studying small business, also took her time to make several suggestions about the implications of the Pareto principle for small business entrepreneurs:

1. One can strive to find and focus on the one-fifth clients that generate most of the sales revenue
2. One should pay special attention during the first and last 10% of a development project for improved results
3. Eighty percent of sales or production are carried out by only approximately twenty percent of the staff
4. At the same time, a small portion of the staff can be generating a large portion of a company’s problems

These ideas very much resonate with the classical 80-20 ideas: Inna did her homework and let us share in her new secret knowledge. Thanks, Inna!

The Weekend Business Challenge inspired another reader of ours, Yuri Nikolski from Moscow, Russia, to accomplish quite an impressive feat this weekend. Nikolski, a strategic development consultant, spent this week thinking about the 80-20 rule and the result was a fourteen-page paper entitled “Small Business and the Pareto Principle: Creating Models for Decision-Making.” The paper applies the Pareto principle to business strategy, arguing that it works particularly well when outputs are normally distributed. Yuri, please accept our congratulations on this impressive feat you accomplished for our challenge. We knew that our readers were gifted and our articles were put to good use.

In an e-mail, Yuri also made another suggestion that struck me as particularly remarkable. He suggested that the Pareto principle supports the idea that our life is shaped during our first few years on Earth, and that whatever outcomes we get during our lifespan are somehow the results of our development years. To me, that makes quite a lot of sense.

When it comes to my opinion of the 80/20, I often find that the rule holds true in cases where my plan of action might need some more structure. As a person who dedicates a large part of herself to studying and writing, I can attest that without the knowledge of where I want to end up, I am going to have to scatter more energy than I would like. So, next time I sit down to write an article for the NVSBS blog, I am going to remember the Pareto weekend and jot down a plan to celebrate our community wisdom.

Both the amount active participation and exceptional findings stand far from the expectations that we had held when starting the Weekend Business Challenge. It makes us happy that you, our readers, generated an incredible amount of new business wisdom this weekend together. What we did know beforehand was that this would be fun. So please subscribe if you haven’t yet, comment, enjoy your weekend and check back for the Sunday post here, where the small business is the king.