How To Apply The 80/20 Principle To Your Side Hustle And Make Bank
If their 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 was starting my first blog in 2008 and how many times I changed my mind on things.
With all the shiny objects out there I knew I needed to learn how to focus my attention or my business was going to 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 do much to make a big difference for me.
I tried working at different times of the day to rearranging my schedule and yet I was not getting anymore 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 something called the 80/20 principle. The 80/20 principle is not some productivity hack but rather it’s 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 your honor roll and overachievers.
Finally as a business example 80% of your profits come from 20% or your clients.
Now this doesn’t go to say it’s always split perfectly at 80/20 but rather what this principle says that small efforts are creating the majority of the results.
Don’t believe me test this yourself.
Just look around your house, if your house is like my house 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 the other the other 80% don’t get used nearly as often.
Their are a lot 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 go about applying 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 onto an other.
#1 Find On Your Top Performing Content
One of the best examples of the 80/20 rule in action I can show you is one of my own business with personal finance blog. Currently this blog has 392 published articles articles on it and of all of those articles 2 of them 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 then you can sort your pages with the highest earning. My guess is 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.
The thing is 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 Analytic’s 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 their 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 don’t convert.
On the other hand Google search traffic has done very well for me and that’s why I focus strictly on that traffic source on that site because everything else is pretty much a waste of my time.
#3 Focus On Your Email List
When it comes to your email list the 80/20 principle also hold true. 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 they will also buy from you every time you sell a product or a service as well.
One of the big problems we face as side hustlers is finding new clients however we don’t always need to be looking for new clients when we may already have a bunch of great clients already.
How To Apply This – The simplest way to apply this to your side hustle is give more access to yourself 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 more access to you for a limited time.
By doing this you could charge 2 to 3x of 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 the activities you do. When you think about it some activities you do 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 on article a week.
On the other hand creating a brand new product could be more of a $1,000 an hour activity, because a product is something I can create once and it pays me over and over again.
So if you spend all of your time doing the wrong things it’s obvious why you aren’t making much money because you’re not focus 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 would be all of your mundane task from answering emails to writing content for your website.
- $100/Hour – This category would be things like website design, branding, to coding, or anything that would be worth paying a $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 just 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 in those products and don’t worry about the other ones. If the product is selling well think about ramping it up with some paid advertising to take things to that next level.
Theirs a reason this product or service sells well and instead of creating new products or services to sell why not focus 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 go about applying the 80/20 principle to your side hustle take some time and 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!
