There are plenty of everyday tasks you do for your business that are important. But does every single thing you do actually generate income? Of course not. Learning to distinguish between what actually makes you money – your Income Producing Activities – and what doesn’t is key to maximizing your earning potential.
Income Producing Activities (IPAs) can fall into one of three levels. Using Kathy—who is a financial advisor—as our example, let’s break down what those levels entail.
Level 1: Generating Revenue
This level includes anything that will bring you new business or help you close existing business. A lot of people avoid the “new business” aspect of this because, frankly, it’s the toughest part of the job.
One of my favorite quotes from Tim Ferriss (author of The 4-Hour Workweek) is, “Being busy is a form of laziness.” People are afraid of doing the tough stuff, so they become so busy doing the easy things that they convince themselves they have no time for anything else. But the easy stuff isn’t where you grow your business! You have to push yourself outside your comfort zone—that’s where all the action takes place. So put away the lame excuses and get down to business.
Practical application: For Kathy, generating revenue would include tasks like asking for referrals, calling those referrals, setting up new and existing client meetings, and hosting lunch-and-learn events where she can talk with potential clients about 401(k) planning, early retirement, or reallocating funds.
Level 2: Building Relationships
This level includes retaining or maintaining existing relationships and building new ones. This could mean forming new relationships by taking a current referral partner or client to lunch, or maybe hosting informational events with prospective new clients.
It might also mean deepening relationships with your current book of business and holding annual reviews with existing clients to make sure you’re staying on top of their needs.
Nurturing relationships with your Inner Circle is a big part of this, as the deeper you go with those relationships, the more you can count on them referring business to you. I’ll be going into more detail about what constitutes an Inner Circle relationship, and how to grow it, in an upcoming blog!
Practical application: For Kathy, building relationships may focus on cross-selling to her current book of business. If a client only has 401(k) planning with her, for instance, she could take the time to talk to them about life insurance.
Level 3: Saving Time
Delegation is tough! As salespeople, we’re often afraid to give up our work. We’re certain we can do it faster and better than anyone else. But, if you’re wasting time doing simple tasks that could be done by someone else, you’re robbing yourself of the opportunity to do the things that actually make you money! Delegating things like rescheduling meetings and formatting presentations can save you a ton of time to focus on the bigger picture.
Automating systems and planning ahead is also crucial to saving yourself valuable time. I’m a huge advocate of getting everyone to put a standing appointment on their calendar for 4:30 pm every Friday to plan not only the next week, but the following week as well. Planning out this far in advance lets you see where you’re falling short on meeting quotas or networking opportunities, and allows you to see what you want to accomplish and what you need to do to get there.
Lastly, self-improvement is one of the most important income producing activities. So, reading my blog is producing income for you right now…you’re welcome! Anytime you’re focusing on improvement—whether it’s through reading blogs and books, or listening to a podcast or audiobook during your commute—you’re becoming better, smarter, and quicker, which will lead to increased sales.
Practical application: For Kathy, when current customers call, her assistant should be the first line of defense to save time. Rescheduling appointments, entering client data into the system, and making presentations look pretty are things that can easily be handled by an assistant, leaving Kathy to focus on the content of those presentations and setting new meetings with more potential clients.
Prioritize Your Income Producing Activities
Think about everything you do in a given week (you may need to keep a log to see what you really do). Your goal is to have as many Level 1 and Level 2 activities as possible. Commit to eliminating or delegating as many non-Income Producing Activities as you can. Then, focus on using all the time you’ve saved to do those activities that generate revenue and build relationships.
Until next time—go sell some stuff!