Haven’t you ever done something that in hindsight turned out to be too much work for too little payoff. You’re not alone, many other businesses especially the new ones make that same mistake. Why do they do that? Because they don’t quantify their results. This is true for production, advertising, money management and many other topics. When you don’t check your results you don’t know how to effectively use your resources.
When I say minimum effective dose I’m referring to the minimum you can do to get the maximum result. A good example of this is Pareto’s law. Pareto’s law states that 20% of your effort results in 80% of your outcome. And the other 80% result in 20% of your outcome. Therefore the first 20% are the minimum effective dose.
You’ll see it anywhere in your business, let’s take your client base for example. You’ll notice that around 20% of your clients are producing 80% of your profit. This does not mean but you have to fire 80% of your clients straight off. But what it does mean is that you need to look over every client, and find the ones that are wasting your time and producing a low income.
Depending on your business, checking out your client base might be a lot of work. I found an easy way that works for me, and I’m hoping it’s going to help you as well. I give my clients grades just like you got in school. The client starts off as an A, and depending on how much they abuses my time or is tardy when it comes time to pay. Their grade can go down all the way to D. if you want to know more about that, you can check out my article on filtering customers.
This is also useful for professionals who keep their client base on your phone. Its pretty easy to add a letter at the end of the contact name. That way you know right away if the phone call is worth answering or not. I mean if you’re in the middle of the meeting and a client whose grade is D this is calling you, you know you can ignore the call.
At the end of the day you’re paid by how much you produce, remember these words whenever you do anything new in your business. What is the minimum effective dose.