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The Pareto principle or the 80/20 rule is important to know when doing your projects. In this week’s video I will talk to you about this principle and how it applies to your tasks and your restaurant in general.
To learn more please either watch the video above, read the transcript or listen to the podcast below.
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Today I want to talk to you about the Pareto principle and what it means for your restaurant. Maybe you have heard of the 80/20 rule, this is a law and has been proven over and over again.
The 80/20 Rule:
In the late 1800s an economist by the last name of Pareto discovered this in a paper that he wrote. He noticed different patterns but the biggest pattern that he noticed was that 80% of the land in Italy was owned by 20% of the people. He started looking at this in sales, farming and business. People have studied this for well over a hundred years.
In a real estate sales office 20% of the people produce 80% of the results. I was recently talking to a friend of mine who’s the president of a very large Sysco distributorship and he said that approximately 80% of the product they sell only go to about 20% of their customers.
So how does this relate back to your restaurant?
It’s very simple, the question that I have for a lot of restaurant owners that aren’t achieving the level of success that they want is: What are you doing with your time? Are you spending your time in the 80% or the 20% zone? Are you working on projects that are taking 20% of your time that are getting you 80% of the results or are you spending 80% of your time working on a project that’s only gonna get you 20% of the desired results?
There’s a time and a place, when you have multiple locations you can spend your time on those tiny little projects that make very little changes but those little changes over the size of your company are huge. Unfortunately a lot of independent restaurateurs spend a lot of time working on things like very detailed inventory, perfect financials and recipe costing. The results they’re gonna get from that effort are so small.
I say to those people get out of your office and talk to someone, meet people, invite them into your restaurant and work on growing your restaurant because knowing that the price of a recipe went up three cents isn’t gonna change a thing in your restaurant.
I hear restaurant owners complain that they’re always doing the same things every day, telling their staff the same things, putting out the same fires but they’re spending 80 percent of their time putting out the fires instead of spending 20 percent of their time preventing the fire in the first place.
Your Next Step
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