Income-Generating vs. Non-Income Generating Activities
One of the lessons I learned early on in my career was the importance of distinguishing between “income-generating” activities and “non-income-generating” activities. Income-generating activities are activities that have the potential to generate revenue and non-income generating activities are activities that do not. No matter who you are or what field you work in, every business activity can be clearly delineated as one or the other.
I first started implementing this concept when I worked as a financial advisor in Chicago nearly 13 years ago. The leadership team at the firm I worked for had decades of sales experience and distinguishing between profitable and unprofitable activities was taught to new advisors early on in the training process. Any and all income-generating activities were activities that we should prioritize and do first at the beginning of the day, and all non-income generating activities we were encouraged to reserve until the end of the day. Income-generating activities included responding to client requests, meeting with clients, and making prospect phone calls. It was straight-forward, and it worked.
Non-income generating activities included dictating meeting notes, updating client files, responding to non-urgent emails, preparing materials for meetings, meeting with administrative staff, updating expense reports, processing payroll, etc. While these activities were important to the overall process of running a financial services practice, by themselves they did not generate new business.
While my days and priorities are a lot different than they were 13 years ago, they are still structurally laid out the same. I correspond and meet with investors, potential investors, and current and prospective investment fund managers in the first part of the day. And I perform all my deal analysis, presentation preparation, responding to emails, and administrative work in the second part of the day. Structuring my days in this manner prevents me from getting distracted and helps me to stay focused on what’s most important.