To increase profits in business, use the 80/20 principle.

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Now you know how to apply the 80/20 principle to your own productivity, but you’re probably wondering how you can apply it in a business.

In fact, there are multiple ways you can do this, but perhaps the most important is optimizing the product range of your business.

To do so, you must first analyze which of your product groups are generating the most profits. Simply rank all your products by profit and sales figures, and you will probably find that while the top products only account for 20 percent of sales, they generate 80 percent of the profit.

For example, the author conducted a study at a company producing electronics and found that the top three products accounted for 19.9 percent of the total sales but brought in a whopping 52.6 percent of total profits.

Once you have identified the 80/20 split in your company, the second step is to leverage and amplify the potential of that profitable 20 percent. Prioritize these products and focus your resources on selling more of them.

At the electronics company, the author encouraged management to raise the sales of their top products by telling salespeople that their only goal was to double the sales of those three products, ignoring everything else.

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