With all the news on TV about impending economic doom and gloom I thought it important to discuss how this news impacts the pet industry.

Recent indicators show that the pet industry, while not impervious to the overall economy, has the ability to rise above the fray – and the current trends are a good case in point. The spending trends are such that the industry looks set to continue to prosper through 2008. This trend, however, is going to be difficult to maintain if the general economic conditions deteriorate into 2009 and 2010.

There has been plenty of talk about a “credit crunch” in the past 6 months, as subprime lenders feel the effectives of years of loose lending guidelines. While this may be a form of a “credit crunch”, it certainly isn’t the more dangerous liquidity crisis that stems from questionable monetary policy. This is actually good news for your pet business because it means people will still have the cash to spend on their pets should they want to.

A liquidity crisis would be far worse than a credit crunch for petrepreneurs. During a liquidity crisis, pet owners would find that cash is just more difficult to come by and purely discretionary purchases, even for their pets, would be negatively impacted. Tough cash situations usually means switches to lower priced food products, delaying travel (no sitting serviced needed), home grooming, and purchasing fewer toys and treats for their furry family.

The 2007 credit crunch could be the first of several waves of poor economic news to hit us. While we can take comfort in the knowledge that the pet industry is beating the current general economic trends, we should use this time to strategically position ourselves and our businesses for success and profitability.

In the first post we defined the “80/20 Energy Rule” and in general how it has applied to my success in the pet industry, in this segment I will show you how you can use this rule TODAY to start your own journey to becoming a successful petrepreneur in 2008…

How You Can Live An 80/20 Lifestyle
When you start to analyze and breakdown your life into elements it’s very easy to see 80/20 ratios all over the place. The trick, once your key happiness determinants have been identified, is to continually optimize your activities and avoid wasting time on those 80 percent activities that produce little satisfaction for you.

The message is really very simple – focus on activities that produce the best outcomes for you! This applies to both your business/working life and your family/personal life (I think they both vitally important, and actually should be looked at as a whole, but people often prefer to distinguish them for clarity). The problem for most people is how to make a living from what you really enjoy, so lets focus on that…

I’m sure you have heard the phrase “struggling artist” or maybe in your case “struggling petrepreneur”. The stereotype where a pet person, musicians, actors, writers and artists, struggle to get discovered and work long hours on horrible day jobs, often in retail and hospitality, until hopefully they finally break out, get discovered and become famous. With the background of the first part of this blog series it shouldn’t surprise you that the ratio of pet fanatics who actually turn their passion for pets into enough income to live off also follows closely an 80/20 distribution – only a few of the overall total manage to get that far.

Does this scenario apply to your past success? How many of you now reading this article are working day jobs, jobs you probably don’t like much, while you work hard after-hours to get your dream pet business up and running?

In truth, and this is a sad fact, most people in the world work jobs they don’t like and only truly live their passions on weekends and outside of working hours. Only a small sample actually live their passions day in and day out, how they want to and when they want to. If you want to join me as one of the special few living the life of your dreams on your terms here are a few things you must focus on…

Focus On Passions, Not Possessions
The simple fact is not everyone can be a famous artist. Not everyone will start a million dollar pet business. I’m not going to tell you stop striving for those goals, I have been working on them myself for years, however you can align your work TODAY to find greater fulfillment, and that is what living an 80/20 lifestyle is all about. As positive consequence of being in alignment, your likelihood of becoming a successful petrepreneur is greatly enhanced because you tap into what you do best more often.

The first thing you must decide, and many of my coaching clients find this is often the hardest step, is to determine what it is exactly you are passionate about within the pet industry. Some people can answer this question easily – “I want to be a positive reward dog agility trainer”, “I’d like to run my own exotic fish farm” etc. Others may have a general idea “I don’t want a day job” or “I want to run a pet business” but the specifics are not sorted yet. If you are not sure what your passions are you MUST test yourself. It’s usually easy to determine what you DON’T like so keep new things within the industry, until you find what it is you really ARE passionate about.

Outputs <> Inputs
It’s important to clarify outputs vs inputs before moving on. Most humans (especially us Americans) are good consumers (my wife is a champion) – we are good at acquiring inputs into our lifestyle. If your like our family, chances are you can easily rattle off a bunch of things you enjoy about your life: eating out at nice restaurants, dark chocolate brownies, reading books and magazines, going to parties and dance clubs, watching movies and DVDs, listening to music, meeting new people, surfing the net, having sex, playing sports and shopping. All of these activities more or less are inputs which means you consume the outputs of other people (with their consent as appropriate).

You may consider the activities I just mentioned passions but it’s hard to find a sustainable passion if all you do is consume. To foster an 80/20 lifestyle you need to locate activities that are passions for you because you create output for others to enjoy. Yes you can get paid to have sex, watch movies, eat at restaurants and read books, but chances are you won’t find it fulfilling or sustainable for very long OR you will be required to provide something back as part of your involvement – that’s your output, the value you create.

It’s okay to love eating out at restaurants and claiming your passion is food, if your intention is to also create output by starting your own restaurant, or a restaurant reviews website or a newsletter or magazine or becoming a chef. If you enjoy listening to music you might also enjoy producing your own music or covering the music industry as a journalist on your own blog.

Only by producing output for other people to enjoy or make practical use of can you expect to convert a passion into a sustainable income. You should understand this already as I suspect the times in your life that you have created something for others or worked on something that benefited other people you experienced the most fulfillment. If you suffer from a lack of direction now, if you are depressed because you don’t even know what your passions are to start applying the 80/20 Rule to, you need to do one thing – start being creative and giving back – produce output! You won’t find fulfillment only by consuming.

A Petrepreneur’s 80/20 Lifestyle Blueprint
To start living 80/20 today you have only to do one thing – focus your energies on what you enjoy.

Part time work – Part time passion

Many people work a full-time job and work after hours on a business or passion or ‘hobby’. If this is you I suspect your ratio is not 80/20 and probably closer to 20/80. You spend way too much time at a job you don’t like, you are probably not very motivated to do it well so you don’t fall into the vital 80/20 employees for that company, and by the time you get home you are too exhausted to spend time starting or building your ‘passion’ pet business. You feel like you are getting nowhere fast. This lifestyle is not good for anyone since all the relationships fall into the 80 percent that produce 20 percent of the value. You get very little from it and the people you work for get very little from you.

If this currently describes your situation what you need to do is start changing those ratios as quickly as possible. Reduce the amount of time you spend at a job you don’t like and increase the amount of time you spend on your passion. You may say you can’t do that because you need the money but I suspect you don’t really need as much as you think you do. Most people can live off part time work but choose to work more because they want more things. You may see your peers enjoying material goods which creates desires in you. Your wants start to outweigh your needs, which is probably the biggest pitfall in our modern, advertising driven, materialistic society.

I’m not saying you have to live like a pauper (in fact when you are making money from your passion it will actually feel like you are living the life of a king) but I am confident that your real happiness comes from spending time doing things you enjoy the most, not from earning more money. Chasing the dollar for the sake of the dollar does not work. Chasing passion often leads to a greater income because the quality of your output is so much higher. Focus your energy on increasing investment in your core strengths and you will reap rewards.

Drop your working hours to three days per week and spend more time attracting more clients, developing more products, finding more time to write your informational reports or to find investors to fund your doggy daycare, or whatever it is you really want to do.

For those of you who have no intention of turning your passions into money generating enterprises this is still a good option. If money isn’t your primary concern but your passion for training dogs is, why do you spend so much time working to earn more money than you need? Yes you need to plan for the future and build assets, but clearly for your pet loving soul it’s not something that needs to take the majority of your time and energy. You can be happy without that mansion by the sea and you never know, if you spent more time on your pet business the eventual consulting or product sales may one day lead to that mansion by the sea. If not, at least you will be a lot happier for following your enthusiasm rather than the dollar.

If financial freedom is important to you and a big part of your plans, look at this step as phase one and work to convert your passions into income generating propositions. Grow your business client-by-client, report-by-report or sale-by-sale. Keep adjusting your work vs passion time ratio as your business grows to support you and you no longer need your job income. Look for 80/20 activities in everything you do and drop any inefficiencies as soon as you can.

Don’t Let Fear Stop You
The biggest factor that stops most people from chasing their dreams and working towards their real goals is fear. Fear of the lack of security, the reduced paycheck and of the unknown future keeps people locked into routines that are not satisfying. That path leads to sadness, depression, poor health, low income and ultimately an early death. Who wants that!

Don’t let fear be the reason for not achieving your goals. Stop, reassess your real passions, remove the money equation long enough so you can think without worrying about finances, and make plans to move towards your 80/20 lifestyle activities. Maximize what you are good at. Find the activities that produce the most results for you and your business and put your energy where the big rewards are.

I discuss the “80/20 Energy Rule” frequently with my coaching and consulting clients, so I thought it was about time to write a proper introduction to the concept for the PetBusiness101 readers. I believe this topic is fundamental to every petrepreneur – to every human being – so if you have never heard of Pareto’s 80/20 Principle, please read on and absorb everything I’m about to tell you, it could potentially change your life, like it has mine!

The “80/20” part of the “Energy Rule” sounds like a statistic and in reality it is, but to use the concepts effectively in your life all you need is a basic understanding of the principles – NOT THE MATH. Yes it has foundations in economics, and yes, it was “proven” using statistical analysis by an Italian economist, but it is not meant to be understood (or more importantly USED) only by economics professors.

Here’s is the Wikipedia definition of the 80/20 concept:

The principle was suggested by management thinker Joseph M. Juran. It was named after the Italian economist Vilfredo Pareto, who observed that 80% of income in Italy was received by 20% of the Italian population. The assumption is that most of the results in any situation are determined by a small number of causes.

I was first exposed to the 80/20 Rule by my entrepreneurship professor at Arizona State University, but I never fully grasped the impact it could have in my life until well after graduation. It wasn’t until I was in my local Border’s bookstore and I picked up a copy of Living The 80/20 Way by Richard Koch. Koch took the 80/20 Rule and made it his own by writing a series of books on the topic. Living The 80/20 Way fit me well because it discussed living life productively and fell inline with my objectives of working less, earning more and focusing on my passions.

At the time I picked up this important resource I was struggling with 80 hour workweek’s, burn-out and a sense of helplessness. After my initial read of the book I realized I was wasting hours and hours of my most precious resource, TIME, on ultimately meaningless activities, I have since studied the book from cover to cover and have tweaked several ideas based on what has produced outstanding results for myself and my coaching clients.

What Exactly Is The 80/20 Energy Rule?
The numbers hold true, in a very rough sense, for me that 80 percent of your outcomes come from 20 percent of your energy inputs. However, in practical application I have found the ratio to be much higher – 97/3 has been closer to reality for my life and work.

It really doesn’t matter what “statistics” are applied, the important thing to understand is that in your life there are certain activities you do (your 20 percent) that account for the majority (your 80 percent) of your happiness and outputs.

You may have expected me to say that 3 percent of my activities produce 97 percent of my financial rewards, and that has held basically true for my businesses, however I believe your overall happiness and satisfaction are even more important variables to focus on. Money certainly plays an important role in your happiness and your money is influenced by these “80/20 Energy” relationships, but ultimately it is only one of the components that leads to your overall well being, which should be your primary concern.

Real Life “80/20 Energy Rule” Examples
There are many macro-economic situations, for example the distribution of wealth and resources on planet earth, where a small percentage of the population controls the biggest chunk, which clearly demonstrate the 80/20 Rule as uncovered by Pareto. There are business examples such as 20 percent of employees are responsible for 80 percent of a company’s output or 20 percent of customers are responsible for 80 percent of the revenues (or usually even more disparate ratios). These are averages, not hard rules, not every company will be like this and the ratio won’t be exactly 80/20, but chances are if you look at many of the key metrics in a business there are definitely a small number of inputs creating the vast majority of output (profits, sales, work…).

At an individual level just by looking at your daily habits you can find plenty of examples where the 80/20 (in my case the 97/3) Energy Rule applies. If you’re like me you probably make most of your phone calls to a very small group of the people you have contact information for. It’s likely you spend a large chunk of your money on few things (rent or mortgage payments, food, and/or travel). There is a good chance that you spend most of your time with only select group of friends from the entire pool of acquaintances.

I’ll show you how I have applied the 80/20 Energy Rules to my life and how I have used the concept, although most often unconciously – it’s just the way I have designed my life (for maximum pleasure!) -to improve the efficiency of my output and enhance my overall lifestyle.

My 97/3 Life
In my life I’ve noticed plenty of “80/20” energy ratios and generally they relate to my core competencies and passions. I really enjoy coaching (both business and my kids sports teams), trendspotting, creating passion income streams and blogging. In terms of rewards, the two-to-four hours or so per day that I spend on these activities (when I’m in my peak energy state and my best work comes out almost effortlessly) is my money time. My resource guides and blog posts work hardest to generate income for me, create coaching and other business opportunities that allow me to focus my energy in a fulfilling way. I get a great amount of financial and intrinsic satisfaction from this time.

I expect you might see some significant similarities. During the times you are caught-up in the moment, enjoying yourself, your output is at its peak. Your passion activities (let’s say doing something with your pets…) probably don’t pay your bills at the moment, which unfortunately means that you can’t sustain your life by indulging only in what you enjoy. I’ll talk more about transforming your passion for pets into a financially stable and personally fulfilling 80/20 format later in this blog post.

There are time in my life where I still struggle and waste time performing activities I don’t enjoy or I am not good at. For example proofreading is not high on my fun list. I don’t always like managing my Google Adwords campaigns because I lack the discipline needed to thoroughly test the variables and track the numbers. The same can be said for things like my website stats. These activities are more numerical in basis, given a choice I would rather leave these tasks, along with other activities like coding html, graphic design and accounting to other people, the specialists who enjoy them (or more likely my wife who does enjoy several of these detail orientated tasks).

Another chunk of my time is spent procrastinating or working inefficiently doing activities that provide very little benefit. This often occurs early in the morning, when I am still groggy or below peak physical condition. I sometimes lack the mental throughput to motivate myself to be productive (and boy, my financial (and emotional) results stink when this happens!), but with the help of my wife and kids, I’m working on it and getting much better at reducing time wastage. When I’m in this state it’s smarter for me to workout, or play a game with the kids, because I’m not capable of producing quality business output and the time spent playing a good game with a 3 year old really puts into perspective my non-business 3%.

Running an 97/3 Business
When I look at one of my online pet food businesses, PetsPreffered.com it’s very clear that a small handful of continuity customers account for most of the income. The customers who become longterm users, who’s pet’s gain the most from the products and fit well demographically and socially with the business model, are key. They provide upwards of 90 percent of the value but only represent 10 percent (actually much less) of the overall people that try the holistic products. My job (and yours too as a petrepreneur) is to determine the best way to attract and convert more pet fanatics into longterm users.

With blogging I have uncovered (and teach in my Pet Blogging Profits Report) that there are a handful of steps that I must complete for every blog I start and when I do, they produce outstanding results. Breaking things down further, there are usually a key 3-10 percent of key elements within an individual blog post (think headline, call to action, linking structure) that have the most dramatic affect on results. The numbers, of course, don’t fall exactly match an “80/20” ratio but there are definitely dominant factors at play.

In a business sense, finding your key 80/20 ratios is crucial for maximizing performance. Find the products or services that generate the most income (the 20 percent) and drop the rest (the 80 percent) that only provide marginal benefits, usually with significant headaches. Spend your time working on the parts of the business that you can improve significantly with your core skills and leave the tasks that are outside your best 20 percent to other people. Work hardest on elements that work hardest for you. Drop the bad clients and focus on improving service and upselling to your best clients.

In part two of this series we will look at how to apply the teachings into your business, give you an actionable blueprint for your pet business and your life and address some of the FEARS associated with this Lifestyle.

Because of this blog and the multiple physical and informational products that I market I get requests for “consulting/coaching/mentoring” engagements all the time, but I have not been able to develop a system to handle these requests – adding the value needed to help you take your businesses to the next level, while also achieving my 4 hour work week goals.

I was reviewing one of my online ‘mentors’ site this morning check out his site at: James Brausch and he is offering to answer any questions about how he does business or how he maintains a great family life by focusing on the important few items while selectively ignoring the rest – so I though this would be a perfect opportunity to get James’s feed back on this topic.

James here is my question: I have a client list of petrepreneurs very eager to get personal coaching and assistance and I would like to offer them a service similar to your magic email program – what is your system of marketing to your clients to join your program and to effectively (while managing your own time) maintaining your obligations (when you respond, lag time in responses, etc) to your coaching clients.

Having a coach or mentor can explode your success – even the most accomplished have them, get your own now.

I have finished up my consulting responsibilities and am working full-time now on finishing up the 2007 update.

What topics do you want to see added to the updated resource guide?

I have also had more than a couple e-mails regarding petreprenuers who want to market treats, but don’t have the facilities to bake them and I promised I would put a call out to our community to find any pet treat bakers willing to private label thier treats… Leave a comment below and I will include your business in the 2007 update.