Pareto's Law business definition

A principle of economist Vilfredo Pareto that, in generalized form, holds that 80% of output originates from 20% of input. The ⁸⁰/₂₀ ratio can be applied to revenues, advertising effectiveness, or management headaches. For example, 20% of advertising produces 80% of results. Likewise, 80% of management headaches are caused by 20% of the employees. Also called 80/20 rule.