How To Apply The 80/20 Principle To Your Side Hustle And Make Bank
If there is anything I’ve learned from running my own side hustle is that it’s easy to get lost in all the noise.
More than that, with so many things in our lives biding for our attention, it can be really hard to keep that focus on what’s really important.
I remember when I started my first blog in 2008 and how many times I changed my mind.
With all the shiny objects out there, I knew I needed to learn how to focus my attention or my business would be doomed.
I tried all sorts of things to help me focus my attention and get more done, but almost all the productivity tips didn’t make a big difference for me.
I tried working at different times of the day to rearrange my schedule, and yet I was not getting any more done than before.
This is when I asked myself the question, why does it seem that all the successful people I know get so much more done in their businesses than I do?
This is when I learned about the 80/20 principle. The 80/20 principle is not some productivity hack but rather a mental shift that will change your entire way of thinking.
So what exactly is the 80/20 principle?
What Is The 80/20 Principle
Here is how Wikipedia defines the 80/20 principle,
The 80/20 Principle – 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.
Simply put 80/20 defines the way things are leveraged. For example, if you have cable like I do you probably watch 20% of channels and 80% you never watch.
Another example is school; 80% of most school kids are average and ordinary, while 20% of them are on the honor roll and overachievers.
Finally, as a business example, 80% of your profits come from 20% of your clients.
Now, this doesn’t mean it’s always split perfectly at 80/20; rather, this principle says that small efforts create the majority of the results.
Don’t believe me test this yourself.
Just look around your house. If your house is like mine, only 20% of the lights get used the most, while 80% of them are not. How about pots and pans? I’m guessing you only use 20% of the pots and pans, while the other 80% don’t get used nearly as often.
There are a lot of ways you can apply this principle, but when it comes to your side hustle business, this principle can make a huge difference.
5 Ways To Apply The 80/20 Principle To Your Side Hustle
To help you out, I’m going to share 5 basic ways you can apply the 80/20 principle to your side hustle today. You don’t have to do all of these. Rather, just pick one and put it into action, and then once you’ve mastered one, you can move on to another.
#1 Find Your Top Performing Content
One of the best examples of the 80/20 rule in action I can show you is my own business, which has a personal finance blog. Currently, this blog has 392 published articles, and of those, 2 have earned 22% of the total income so far.
Look at the picture below.
How To Apply This – To do this simply go into your Google Analytics and sort your pages from the highest to the lowest in traffic.
From there set the date from when you first started your site to the current date. This will show all the visitors who have come to your site and also which pages get the most traffic.
If you are running Google Adsense on your site like I am, you can sort your pages with the highest earnings. My guess is that when you do this, you’ll see a clear trend as to which pages are bringing the most traffic.
As I showed in the picture above 2 pages make the most money on my site. This means that if I focus on making those pages rank better in the search engines and convert better they would earn a lot more money.
#2 Focus On Your Top Converting Traffic Sources
Another way you can apply this is through the traffic sources coming to your site. When it comes to website traffic, you can get it in a bunch of different ways, from social sites like Facebook to bookmarking sites like Stumble Upon.
Not all traffic is equal, and if you look at the traffic from my personal finance blog, you can clearly see where all of my traffic came from: Google.
How To Apply This: Simply go into your Google Analytics account and sort your traffic sources from biggest to smallest. Then set your beginning and end dates from the time your site started to today’s date. This will show you your biggest traffic source.
Now, there is one Caveat to this: It has to be your highest-converting traffic source. For example, you can get a ton of traffic from Stumble Upon (and believe me, I have), but it’s likely that most of this traffic just doesn’t convert.
On the other hand, Google search traffic has done very well for me, so I focus strictly on that traffic source on that site. Everything else is a waste of my time.
#3 Focus On Your Email List
The 80/20 principle also applies to your email list. Not all people on your list are equal. Some will just read your emails or, worse, delete them and never read them.
However, some people will not only read everything you put out there but also buy from you every time you sell a product or a service.
One of the big problems we face as side hustlers is finding new clients; however, we don’t always need to look for new clients when we may already have a bunch of great ones.
How To Apply This—The simplest way to apply this to your side hustle is to give yourself more access or create some sort of VIP package.
For example, if you sell a product such as an information product, you could create a VIP package that gives you more access for a limited time.
By doing this, you could charge 2 to 3x your current asking price, all because you are giving more of your time to your clients.
#4 Focus On Your Activities
You can also apply the 80/20 principle to your activities. When you think about it, some activities pay much better than others. For example, writing content for my blog is roughly a $10 an-hour activity, hence the reason I only write one article a week.
On the other hand, creating a brand new product could be more of a $1,000-an-hour activity because I can create a product once, and it will pay me repeatedly.
So, if you spend all of your time doing the wrong things, it’s obvious why you aren’t making much money. You’re not focusing on the activities that generate the biggest returns.
How To Apply This – To apply this, write down all of the activities you do in your business, from writing content to creating products to answering emails, and assign them to one of three categories.
- $10/Hour—This category includes mundane tasks such as answering emails and writing content for your website.
- $100/Hour—This category would include things like website design, branding, coding, or anything that would be worth paying $100 an hour.
- $1000/hour – The final category would include things like setting up an email funnel, creating a new product/service, creating a sales page, to doing promotions. These are the true money-maker activities in your business and the ones that deserve most of your attention.
Now that you have this set up keep track of the activities you do over the next week on a spreadsheet or a sheet of paper. This will tell you the exact activities you are spending the most time on and my guess is that you’ll be surprised what it’s really being spent on.
#5 Focus On Your Product or Services
Finally, the last way you can apply this is by just looking at the current products and services that you already offer. My guess is that not all of your products or services sell evenly. In fact one or two of them probably sell way more than the others.
I like to do this when I sell affiliate products. When I start a site, I might start with 10 different affiliate products, but over time, I’ll find that one or two of them are selling really well compared to the others. This is when I’ll stop promoting the other eight products and work exclusively with the other two products.
How To Apply This – Look at all the products you offer and list them along with the dollar amount they have earned. My guess is that you will see a few products selling far more than the others.
From here, put all of your energy into those products, and don’t worry about the others. If a product is selling well, think about ramping it up with some paid advertising to take things to the next level.
There’s a reason this product or service sells well, and instead of creating new products or services to sell, why not focus on what you are already good at?
How Are You Applying The 80/20 Principle In Your Side Hustle
Now that I’ve shared five different ways to apply the 80/20 principle to your side hustle, take some time to pick one of the five and focus on it. I’d love to hear about the results you get, so feel free to share them in the comments below.
Also, if you are applying 80/20 in other ways to your side hustle, I’d love to hear about that as well. So take a moment and share what you’ve learned below so we can all grow our side hustles.
Cheers!
