Where should you Stop Your efforts?

Any Small or Midsized Business (SMB) owner or decision-maker is bombarded by a constant stream of management decisions, most often to be taken very rapidly and with very limited capacity to bounce them back and analyze alternative routes with partners.

And once a decision is taken, more sleepless nights continue to haunt You about ironing out some rough edges that you feel are necessary to make your endeavor successful. You may refer to the following blog describing briefly the elements coming into play when you wish to implement for instance a new process.

I propose to help You in such situations to apply here an old economic principle formulated by Robert Malthus, an 18th century economist. He stated (if I may use simple terms) that after a certain point, the more inputs you throw in, the less results you will get. If you want to know more about this historical - and very often controversed - economics theory, you can visit this web page from Frank Elwell of Rogers State University (if you wish some more explanation on this theory, visit as well these web pages from William King from Drexel University)

If You prefer like myself graphics to words, you can refer to the graph below. You will remark two things:

1. There is an "Inflexion Point" meaning that at this specific point, the resources You throw in to go forward (these resources can be time, energy, money, etc,...) start to bring you less and less. Obviously, as an entrepreneur (and unless you have very deep pockets !) you will have to stop or at least slow down signficantly your efforts, but the question is when ?

2. Observe also on the top right hand side of the same graph that I drew a white rectangle. Within it, you can observe that if you continue to throw in resources, your returns become almost negligeable.

As a rule of thumb, I personally consider that reaching a 90 to 95% satisfactory solution is a great achievement and I usually stop my efforts right there.

But practically, how do you know that you reached that plateau phase?

I propose to cover this topic in a next blog, if you don't mind, as indeed I opened here a Pandora's box without closing it.


Law of Diminishing Returns