One of the biggest limitations on the size of your future is getting locked into a certain type of relationship—a particular quality of client base and centers of influence that don’t grow or get any better.
You may have big goals, but if you’re pursuing them while maintaining the same kind of relationships, they’re not going to happen.
Some people take a scattershot approach, figuring that if they simply have more relationships, they’ll have more income. What generally happens, though, is that they find themselves overwhelmed trying to maintain all these relationships and give them equal service. As you grow your business, there comes a point where you’re no longer obliged to work with everyone who walks through your door. Some of
those relationships are just too costly — either financially or emotionally.
The Pareto Principle states that:
Twenty percent of your clients generate 80 percent of your income, while 80 percent generate only 20 percent of your income.
Ironically, those 80 percent who provide so little also dominate 80 percent of your time. A small core of your client base represents the kind of people you want to work with in the future as you grow.
One approach that’s worked well for entrepreneurs is zeroing in on that core—the top 20 of their very best relationships, those current clients or prospects who truly appreciate what they do and are willing to reward them for it. These are the people who won’t just use you as a source of free information or as a provider of commodities; they’ll value you for your wisdom, and see you as a partner in making some important part of their life better or easier.
So once you’ve identified your top 20, you can systematically find ways to delegate or download all the other relationships, freeing yourself up to devote focused time and attention where it will be best rewarded. Whatever income might be lost initially will be soon replaced many times over by the remaining, more valuable, more profitable clients.
Many entrepreneurs are just one relationship or 20 away from an incredibly great opportunity, but they have to be willing to focus their attention on maximizing their best relationships to get there. These are
the clients, customers, prospects, connections, suppliers, centers of influence, and strategic partners who will respect your efforts, reward you for them, and refer you to other people like them.
Another very important set of relationships I encourage entrepreneurs to invest in are the ones they have with their spouse and family. At the outset, these are the most important — the ones we actually stand up in public and commit to. Yet with all the demands of running a business, it’s all too easy to let these slip into the background.
Focusing and restricting your time and attention with clients has the strategic byproduct of giving you more time to spend on the personal relationships that bring some of life’s greatest rewards. Many people who own and run a business think they have to choose among their relationships, and in a sense they’re right: You have to choose to have good quality relationships—in every aspect of life.
The old saying goes, “Time equals money,” but this is not true. Time has never written you a single check. Rather, relationships equal money. All the checks you’ve received and all the new opportunities
you’ve been offered have been because of the relationships you’ve developed.