You might have heard of a term used in business called the 70/30 Rule, or even sometimes the 80/20 Rule. It’s proper name is the Pareto Principle, after Italian economist Vilfredo Pareto who, according to Wikipedia, once observed that 80% of Italian income went to 20% of the population.

My own observation over decades is that this rule actually applies to many situations in business, freelancing, economics, and even more mundane population-related metrics. Often, you can bank on the Pareto Principle or the 70/30 Rule, especially if you’re a freelancer. That is, that you can rely on most of your business coming from a small number of clients.

However, weirder metrics can crop up, and there are some flaws in the rule, as far as reliance on it goes. If you freelance, you should keep the following in mind.

  1. Don’t count on it.
    While 70% of your business might just come from 30% of your clients, losing one such client means significantly impacting your revenue.
  2. Nurture all clients.
    Some of your “30% of business” clients might one day become one of your “70% of busines” clients. Maybe they don’t have the budget at the moment but appreciate your work. Maybe they’re cautious about working with a new contractor/ freelancer and just need to become comfortable. Maybe you haven’t turned those clients into friends just yet. Nurture these “30%” clients in case one of your “70%” clients disappears, even temporarily.
  3. Diversify your clientele.
    You cannot ignore gaining new clients. This is especially true in certain markets, such as freelance blogging. The weblog publishing business isn’t anywhere near stable. Some of the clients I’ve worked with depend on social media sites such as Digg. Many of these sites change their algorithms, causing massive loss in the web traffic that generates ad revenue. Google changes their

To wit, the feast or famine phenomenon that most freelancers suffer at some point in their career, under careful observation, will probably prove to follow this rule in some way. There might be good aspects to rely on the 70/30 Rule, but you also need to be aware of its flaws.

Related Content

WP Engine

Subscribe to the post comments feeds or Leave a trackback