It’s all about the percentages,
60-30-10 rules of small business
Small Business Percentages
I teach my clients to divide their time based on the many roles that a small business owner plays. As a small business owner you are the marketing department, the sales team, customer service, production department, human resources, and the Executive Team. I encourage solo-preneurs that I work with to divide their week accordingly so that everything gets done and each area gets the proper attention.
A while back I was exposed to the ideas of the 60-30-10 rule for small business. Similar to Pareto’s Principle, this rule defines how a small business owner should allocate their time.
This rule was originally taught in the context of marketing, but has developed into a framework of how to spend your time as a small business owner. Small business owners should look at their weeks in 60%, 30%, and 10% blocks.
Running the business
Small business owners and solo-preneurs should spend 60% of their week marketing and selling their products and services. 30% should be spent creating, producing or providing that product or service, and 10% of their time should be spend on administration and customer service. Market, Make, Manage!
Small business owners should spend 60% of their time marketing and selling to their current customers and contacts. This includes keeping and growing your current customers, along with providing high value to all of your contacts. 30% of your time should be spent marketing to and selling to your target market. The final 10 % should be spent marketing to the dream clients or customers. These are high profile, top dollar accounts and customers. These types of folksare the ones that you now believe are “out of your league.”
Now of course the Pareto Principle (80/20) applies to all of this as well, but I cannot cover all of that here or I would totally lose all of you, especially the mathematically challenged.Be sure that you have clearly identified the lists above to have the maximum benefit from all of this.
Small business folks often don’t have a plan for training and development of themselves and their people. Spend 60% of your development time sharpening your saw, honing strengths; 30 %of your time focused on new skill development and 10% working on your weaknesses.
I encourage my small business coaching clients and my life coaching clients to invest an hour a day toward their own personal development. This “hour of power” is the same practice many other guru’s suggest. The reason we all suggest it: it works. Now apply the 60-30-10 rule to it as well.
60% of an hour is 36 minutes. Over the course of a year that is over 200 hours of honing your strengths. What kind of difference would that make in your business? In your life?
All businesses owners leverage 3 critical areas: time, energy and money.
If you learn to invest your time as you would your money, you’d be surprised by the outcomes. When small business owners invest money in a service they focus on the ROI. They don’t want to lose. Then doesn’t it make sense to invest your time on keeping and growing your current customer base.
And the best investment for ROI is investing your time on your best performers as well as in your own strengths. You will soon be able to outsource or delegate all the rest.
Invest in playing the percentages. Play the percentages in respects to your market, your time, and with your money. Playing the percentages offers you the best return on your investment.
I look forward to your comments. Please let me know how else you can see the 60-30-10 rule applying to small business.