80-20 Rule - Business Glossary - Business Dictionary - Business Terms

Business Glossary - 80-20 Rule

Glossary of International Business : 80-20 Rule

The concept that when a large number of individuals or organizations contribute to a result, the major part of the result comes from a minority of the contributors.

The Pareto Postulate is that 20% of your effort or clients will generate 80% of your results or business. This is commonly referred to as the 80/20 rule. An actual percentage can be calculated by ranking customers or contributors by volume or any other factor.

The Pareto Principle is based on the work and writings of the 19th century Italian economist Vilfredo Pareto.

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