One of the best ways to increase your income is to figure out what’s working and do more of that.
The 80/20 rule (or Pareto Principle) suggests that 20% of what you do creates 80% of your revenue so you just need to identify that 20% and focus your efforts on that ... Sounds simple enough, doesn’t it?
The problem is that you first have to know exactly what’s working and what isn’t. The best way to do that is to track everything. From there, you look at your data and make a plan for what you should and shouldn’t be doing going forward.
What to Track?
Your first step will be to decide what you want to track. This will be a little different for everyone depending on your business and what you do daily, weekly, and monthly. An excellent place to start is to look at income and expenses, products or different sources of income, and of course, where you spend most of your time.
Track your Income
Let’s say you start to track where your income is coming from. If possible, go back and look at the last six to twelve months of financial data.
- Did you make money selling your own products?
- Did you get large affiliate commission checks?
- Did you sell advertising on your websites?
Next, you want to look at expenses related to that income. You’ll have some fixed costs like hosting your website, for example, that you should ignore for the purpose of this exercise. Look at the costs directly related to each source of income.
For instance, to launch a product, you may hire a Graphic Designer, a Virtual Assistant and pay for your Shopping Cart Software. You may also be paying commissions to affiliates promoting your products. Subtract those costs from the income you’ve made to get a good feel for your actual profits. Other sources of income will have little to no expenses. Once you’ve adjusted your income figures to reflect the profit you’ve made, you can start to compare and identify the highest earning 'channels'
Track your time
Last but not least, look at the amount of time you’re spending to generate the income. It may take you an entire month of working twelve-hour days to launch a new extensive course. On the other hand, you may be able to put together a short eBook or fresh membership content in a day or two, by leveraging content you’ve already written or buying pre-written content. Look at the time it takes for each type of product and compare this to the amount of money you expect to make from the launch and going forward. This will help you decide what’s the most profitable way to spend your time.
Apply the 80-20 Rule
With all the information at your fingertips, it will be easy to decide what you should be doing more of, what you should be doing less of, and what you should stop. Focus most of your time and energy on the top 20% of your most profitable products and income sources.
Work on it for a good six months and look at how much your profits increase. You may find this one strategy alone allows you to double your income.