| Friend,
Pareto-Ryu Martial Arts is not some new ultimate style, or a modern expression of an ancient martial arts...
Nope.
It's my tongue-in-cheek nickname for any martial art school that's managed by following the economic principles of one Vilfredo Pareto, the anti-socialist Italian polymath who was considered by many to be the first modern economist.
Among his other well-known ideas, Pareto once observed that 80 percent of the land in Italy was owned by 20% of the people. (It's said that he first came up with the idea after observing that just 20% of the pea pods in his garden produced 80% of the peas - doubtful, but it makes for a good story.)
Later, his discovery would be referred to as the Pareto Principle, also known as the 80/20 Principle. In recent decades, business management experts and economists have found that his theory applies to all manner of statistical phenomena in nature and economics.
For example, quality control expert Dr. Joseph Juran found that 80% of product problems were caused by just 20% of product defects. And many occurrences in nature have been observed to follow a Pareto distribution curve, such as rainfall patterns, size distributions of natural objects... even the size and value of oil fields.
And how does this benefit you? When the 80/20 principle is applied to how you manage your business, it will drastically improve your efficiency while reducing your workload.
Put simply, the 80/20 principle allows you to focus on high-priority tasks while eliminating extraneous busy work.
Consider the following, and think about how you might apply the Pareto Principle to better manage your business: - 80% of sales (revenue) will be generated by just 20% of your customers (hint - take REALLY good care of those customers!)
- 80% of complaints will come from just 20% of your customers (hint - you could fire those chronic complainers, but first make sure they aren't in your top 20% of earners!)
- 80% of your students will attend just 20% of your classes (hint - is there a way to make your schedule more efficient without angering the majority of your students?)
- 80% of your leads will be generated by just 20% of your advertising (hint - find out which marketing methods are generating most of your leads, and scale them up!)
And finally, 80% of your growth and profits will come from just 20% of your activity in a business. This is what the entire concept of Small Dojo Big Profits is based on, and it's the central axiom of the 80/20 principle.
Unfortunately, many school owners "learn" those high-priority 20% tasks, and then move on quickly to "more advanced stuff" - never realizing that the 20% is where the majority of the money is made.
Then sadly, they often end up ignoring the critical daily tasks that are foundational to any martial art school's success... namely: - Lead generation
- Enrollments
- Retention
- Tracking Performance Numbers
- Tuition Collection
- Profit Maximization
These are the six areas you should be focused on in order to build a successful school (and in that order). Anything else is merely a distraction.
So, the next time you're about to add some new whiz-bang thingamajig to your school, ask yourself if you're adhering to Pareto's Principle in doing so...
...and if what you're adding doesn't jibe with any of the high-priority 20% tasks, drop it and get back to focusing on what really matters.
Until next time,
Mike Massie MartialArtsBusinessDaily.com
P.S. - Pareto loved capitalism, and so do I. Not because I'm greedy, but because if I'd never had the opportunity to start my own business, I'd probably still be working minimum wage jobs and living from paycheck to paycheck.
P.S.S. - Pareto hated socialism, and so do I. Not because I'm selfish, but because forced charity isn't charity at all - it's theft. Here's a great illustration of this from two of my favorite entertainers on the planet, Penn and Teller: https://youtu.be/pz2p4EQtEXs
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