For the entire day, I put aside everything seemingly urgent and did the most intense truth-baring analysis possible, applying these questions to everything from my friends to customers and advertising to relaxation activities. Don’t expect to find you’re doing everything right—the truth often hurts. The goal is to find your inefficiencies in order to eliminate them and to find your strengths so you can multiply them. In the 24 hours that followed, I made several simple but emotionally difficult decisions that literally changed my life forever and enabled the lifestyle I now enjoy.
The first decision I made is an excellent example of how dramatic and fast the ROI of this analytical fat- cutting can be: I stopped contacting 95% of my customers and fired 2%, leaving me with the top 3% of producers to profile and duplicate.
Out of more than 120 wholesale customers, a mere 5 were bringing in 95% of the revenue. I was spending 98% of my time chasing the remainder, as the aforementioned 5 ordered regularly without any follow-up calls, persuasion, or cajoling. In other words, I was working because I felt as though I should be doing something from 9–5. I didn’t realize that working every hour from 9–5 isn’t the goal; it’s simply the structure most people use, whether it’s necessary or not. I had a severe case of work-for-work (W4W), the most-hated acronym in the NR vocabulary.
All, and I mean 100%, of my problems and complaints came from this unproductive majority, with the exception of two large customers who were simply world-class experts of the “here is the fire I started, now you put it out” approach to business. I put all of these unproductive customers on passive mode: If they ordered, great—let them fax in the order. If not, I would do absolutely no chasing: no phone calls, no e-mail, nothing. That left the two larger customers to deal with, who were professional ball breakers but contributed about 10% to the bottom line at the time.
You’ll always have a few of these, and it is a quandary that causes all sorts of problems, not the least of which are self-hatred and depression. Up to that point, I had taken their browbeating, insults, time-consuming arguments, and tirades as a cost of doing business. I realized during the 80/20 analysis that these two people were the source of nearly all my unhappiness and anger throughout the day, and it usually spilled over into my personal time, keeping me up at night with the usual “I should have said X, Y, and Z to that penis” self-flagellation. I finally concluded the obvious: The effect on my self-esteem and state of mind just wasn’t worth the financial gain. I didn’t need the money for any precise reason, and I had assumed I needed to take it. The customers are always right, aren’t they? Part of doing business, right? Hell, no. Not for the NR, anyway. I fired their asses and enjoyed every second of it. The first conversation went like this:
Customer: What the &#@$? I ordered two cases and they arrived two days late. [Note: He had sent the order to the wrong person via the wrong medium, despite repeated reminders.] You guys are the most disorganized bunch of idiots I’ve ever worked with. I have 20 years of experience in this industry, and this is the worst.
Any NR—in this case, me: I will kill you. Be afraid, be very afraid.
I wish. I did rehearse that a million times in my mental theater, but it actually went something more like this:
I’m sorry to hear that. You know, I’ve been taking your insults for a while now, and it’s unfortunate that it seems we won’t be able to do business anymore. I’d recommend you take a good look at where this unhappiness and anger is actually coming from. In any case, I wish you well. If you would like to order product, we’ll be happy to supply it, but only if you can conduct yourself without profanity and unnecessary insults. You have our fax number. All the best and have a nice day. [Click.]
I did this once via phone and once through e-mail. So what happened? I lost one customer, but the other corrected course and simply faxed orders, again and again and again. Problem solved, minimum revenue lost. I was immediately 10 times happier.
I then identified the common characteristics of my top-five customers and secured three or so similarly profiled buyers in the following week. Remember, more customers is not automatically more income. More customers is not the goal and often translates into 90% more housekeeping and a paltry 1–3% increase in income. Make no mistake, maximum income from minimal necessary effort (including minimum number of customers) is the primary goal. I duplicated my strengths, in this case my top producers, and focused on increasing the size and frequency of their orders.
The end result? I went from chasing and appeasing 120 customers to simply receiving large orders from 8, with absolutely no pleading phone calls or e-mail haranguing. My monthly income increased from $30K to $60K in four weeks and my weekly hours immediately dropped from over 80 to approximately 15. Most important, I was happy with myself and felt both optimistic and liberated for the first time in over two years.
In the ensuing weeks, I applied the 80/20 Principle to dozens of areas, including the following:
1. Advertising
I identified the advertising that was generating 80% or more of revenue, identified the commonalities among them, and multiplied them, eliminating all the rest at the same time. My advertising costs dropped over 70% and my direct sales income nearly doubled from a monthly $15K to $25K in 8 weeks. It would have doubled immediately had I been using radio, newspapers, or television instead of magazines with long lead times.
2. Online Affiliates and Partners
I fired more than 250 low-yield online affiliates or put them in holding patterns to focus instead on the
Slow down and remember this: Most things make no difference.
Being overwhelmed is often as unproductive as doing nothing, and is far more unpleasant. Being selective— doing less—is the path of the productive. Focus on the important few and ignore the rest.
Of course, before you can separate the wheat from the chaff and eliminate activities in a new environment (whether a new job or an entrepreneurial venture), you will need to try a lot to identify what pulls the most weight. Throw it all up on the wall and see what sticks. That’s part of the process, but it should not take more than a month or two.
It’s easy to get caught in a flood of minutiae, and the key to not feeling rushed is remembering that
The 9–5 Illusion and Parkinson’s Law
I saw a bank that said “24-Hour Banking,” but I don’t have that much time.
—STEVEN WRIGHT, comedian
If you’re an employee, spending time on nonsense is, to some extent, not your fault. There is often no incentive to use time well unless you are paid on commission. The world has agreed to shuffle papers between 9:00 A.M. and 5:00 P.M., and since you’re trapped in the office for that period of servitude, you are compelled to create activities to fill that time. Time is wasted because there is so much time available. It’s understandable. Now that you have the new goal of negotiating a remote work arrangement instead of just collecting a paycheck, it’s time to revisit the status quo and become effective. The best employees have the most leverage.
For the entrepreneur, the wasteful use of time is a matter of bad habit and imitation. I am no exception. Most entrepreneurs were once employees and come from the 9–5 culture. Thus they adopt the same schedule, whether or not they function at 9:00 A.M. or need 8 hours to generate their target income. This schedule is a collective social agreement and a dinosaur legacy of the results-by-volume approach. How is it possible that all the people in the world need exactly 8 hours to accomplish their work? It isn’t. 9–5 is arbitrary.
You don’t need 8 hours per day to become a legitimate millionaire—let alone have the means to live like one. Eight hours per week is often excessive, but I don’t expect all of you to believe me just yet. I know you probably feel as I did for a long time: There just aren’t enough hours in the day.
But let’s consider a few things we can probably agree on.
Since we have 8 hours to fill, we fill 8 hours. If we had 15, we would fill 15. If we have an emergency and
