In the last part of the series “Effective time management methods for freelancers” I would like to introduce the ABC analysis. In the previous articles we have already learned about the Eisenhower principle and the ALPEN method.
What is the ABC analysis?
The ABC analysis is similar to the Eisenhower principle, since it is also essentially about prioritizing tasks. In the Eisenhower principle, tasks are distinguished according to their urgency and importance. In the ABC analysis, an attempt is made to measure the importance of a task based on its share of overall success.
- A Class: Tasks have an 80% impact on your success
- B grade: tasks approx. 15%
- C Class: Tasks approx. 5%
I admit the whole thing sounds very abstract. How can this help us as freelancers? The following is a practical example:
The ABC analysis in practice
This technique makes sense for relatively clearly measurable things. For example, simultaneous requests from different customers can be categorized very well in an ABC analysis, for example, if sales are used as a benchmark.
- A Customer accounts for 80% of sales
- B Customer, 15% of sales from
- C Customer only 5% of sales from
If you receive a request from all three customer groups at the same time, the ABC analysis will show you which customer you should answer first. Promising enquiries from new customers land with me directly in group A, although no turnover has yet been generated.
Classifying customers according to turnover is only one way of applying the ABC analysis. Perhaps you will find other criteria or other areas of life where you can apply this technique.
In the following I would like to give you a few more examples of how I use the ABC Analysis consciously and partly also unconsciously:
Bills: Smaller expenses automatically fall into C class with me. When it comes to high expenses, I spend a lot more time, for example to compare prices or renegotiate offers. High expenditure therefore falls directly into A class. This example shows that this technology actually works automatically in many areas of our company.
Investments: When I invest in stocks, some stocks make up a larger part of my overall portfolio. These shares are in the A class. This means that I keep a closer eye on this company and spend more time reading its annual reports.
The ABC Analysis invites you to find fundamental decision-making aids in the prioritization of tasks and to implement them consistently. In some areas of life, we automatically act according to this presented technique. For areas that require a higher decision effort, the targeted use of this technology can be very helpful.