If you are a small-business owner, you know that setting priorities is essential to your business’ success.

In his book, The Seven Habits of Highly Effective People, Stephen Covey classifies to-do items as rocks, pebbles, or sand. Time is limited, just as the capacity of a jar is finite, so Covey recommends placing the high-priority items, the rocks, in the jar first, followed by less important tasks, or pebbles. The rest of it, the sand, fills in around the larger priorities or simply spills out.

Covey also developed a time management matrix and classified tasks in four quadrants:

Quadrant 1: Urgent and Important
Crises, pressing problems, deadline-driven projects

Quadrant 2: Not Urgent and Important
Relationship building, recognizing new opportunities, planning, recreation

Quadrant 3: Urgent and Not Important
Interruptions, some calls, mail, reports, and meetings

Quadrant 4: Not Urgent and Not Important
Busy work, time wasters

Covey believes that effective, proactive people spend most of their time in quadrant 2.  To be effective, you need to avoid activities in quadrants 3 and 4. This requires that you know the difference between important (i.e., needs to be done) and urgent (i.e., needs to be done immediately).

Prioritizing effectively requires planning, forethought, organization, and the ability to say no to requests. An entrepreneur must learn to set priorities – and realize that he or she just can’t do everything.

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