October 2015 Income At-A-Glance
Gross Income for October: $542,658
Total Expenses for October: $103,318
Total Net Profit for October: $439,340
Difference b/t October & September: $244,250
Why We Publish An Income Report
This monthly income report is created for you, Fire Nation. By documenting the struggles we encounter and the successes we celebrate as business owners every single month, we’re able to provide you with support – and a single resource where we share what’s working, what’s not and what’s possible.
There’s a lot of hard work that goes into learning and growing as an entrepreneur, especially when you’re just starting out. The most important part of the equation is what you’re able to pass on what you learn to others through teaching, which is what we aim to do here at EOFire.
CPA On Fire
What’s up Fire Nation, my name is Josh Bauerle. I’m a CPA and the Founder of CPA On Fire, where we specialize in working with entrepreneurs to minimize their tax liability while keeping them in line with the ever changing tax laws.
I’ve been working with EOFire to make sure their accounting systems are running smoothly and their taxes are as low as possible. John and Kate have included me in the monthly income reports with unlimited access to all their accounts so I can verify that what they report here is complete and accurate.
And because they believe in delivering an insane amount of value, my job doesn’t stop at the verification level; I’ll also be providing tax and accounting tips to you along the way!
Josh’s October Tax Tip: IRS Audits
In the spirit of Halloween, I wanted to start a series discussing the spookiest topic imaginable in the world of taxes: an IRS audit!
A mere mention of the word is enough to send a chill up the spine of any taxpayer; but when you know the facts, an audit isn’t all that scary.
First, let’s look at some numbers
Right now, less than 1% of all individual tax returns are audited!
“That’s great”, you may be saying to yourself, “but I’ve heard businesses are at a much greater risk of audit.”
Well, if your business is a corporation with assets over $10M you are absolutely right, the audit rate goes up to over 15%. But my guess is you are probably a sole proprietor, partnership or S Corporation, in which case the risk of audit actually falls to .42%. So before we dig too deep into this topic, let the fact that it’s incredibly unlikely to happen to you ease your fears of an audit at least just a little bit…
Different levels of IRS Audits
On top of it being incredibly unlikely to be audited, most people don’t know there are three different levels of IRS audits, and that most fall into the least invasive level.
Let’s take a look at these three levels of audit and what each entail.
1. Correspondence Audit
Roughly 76% of all IRS audits fall under the category of a correspondence audit.
What this means is the IRS sends you a letter essentially saying “our records show something different than your tax return, which one is right?”
If you made a mistake and agree with the IRS records, you simply mail them a check or make payment arrangements for the additional amounts owed. If you disagree, you send proof of your position.
Either way, it’s hardly the life altering process most people fear it to be.
2. In Office Audit
This type of audit is what a small business is likely to encounter, and it involves going to the office of the IRS agent you are dealing with.
The agent will send you a list of items on your tax return they are questioning and you will bring any proof you have to back your position. This is a fairly simple process and is usually wrapped up over a couple hours during your initial meeting.
3. Field Audits
This type of audit is what you see on TV shows – you know, the kind that keeps you up at night worrying about whether or not you should deduct the $0.59 pen you bought at Home Depot yesterday. ;)
The IRS will come to your home or business and comb through most – or all – of your tax records in an attempt to disprove the claims on your tax return. And while this sounds incredibly scary, it’s important to know that field audits are super rare, and they usually only happen to large corporations and are limited to cases where extreme misconduct is suspected.
If you are subject to this type of audit, then you probably blatantly cheated on your taxes or hired an incredibly unethical tax preparer to do it for you.
So to sum it up, you are extremely unlikely to ever be audited by the IRS (well, as long as you’re playing by the rules), and if you are audited, then it will likely involve a simple mail correspondence with the IRS.
Hopefully that will ease your IRS fears this Halloween!
Next month in our series, we will discuss how to decrease your chances of an audit even further, and also talk about how to protect yourself in the event one does happen.
I’m always here as a resource if you have any questions! Please feel free to contact me if you’d like to discuss what would be best for YOUR business. I LOVE chatting with Fire Nation!
*Bonus!* Get instant access to Josh’s free video training course: 4 Finance Lessons Entrepreneurs Can’t Afford to Miss!
What Went Down In October
We’re going on The Podcasters’ Paradise Cruise!
You might be thinking, “Wait a second… an October Income Report before October is even over?”
You got it, Fire Nation, because on Saturday, Oct 31st – bright and early – we will be jetting off to Fort Lauderdale, FL to set sail on the beautiful Independence of the Seas for the 1st ever Podcast Cruise!
Stops include Jamaica, Haiti and Grand Cayman, and if you want to check out all the amazing details, like who will be on board and why we decided Podcast Cruise was the perfect start to November, click here!
We’ll chat all about the Podcast Cruise in November’s Income Report!
The doors to Paradise close…
In May 2015, we closed the doors to Paradise before jetting to the Philippines for Chris Ducker’s Tropical Think Tank conference.
Not only were we going to be gone half of the month, but we had some pretty major updates to put in place, and we were working on training up our virtual team on support for the community.
When the doors re-opened at the end of May, the lifetime membership investment increased to match the value within.
So why did we close the doors again in October 2015?
We’ve been transparent since the very beginning: Paradise will not always offer a lifetime membership, and closing the doors in October is helping us prepare for the transition to a recurring membership for Paradise.
We also have even more we want to add to the community, and two things at the forefront:
1. Live Support on the membership site (thanks, PureChat!)
2. A job board to help Paradise members share their expertise with the community!
This time around, we did a couple of things differently, including shortening the length of the email campaign (only 3 days versus 4 days last time), plus, our messaging was slightly different based on the fact that the big push last time was a price increase – this time it’s the switch from lifetime membership to recurring.
There’s been a lot of prep and work behind the scenes to help make this a smooth close. Everything from creating the email campaign (and sending the right contacts into it), to updating order forms each night, to creating an interest campaign for when we re-open the doors, to redirecting our sales page…
Logistics galore! …along the way, we’ve considered everything from:
- The messaging for the close (and actions necessary to stick to our word);
- How the recurring membership will be structured when we re-open;
- What steps we need to take to prepare our order forms & update our on boarding process appropriately;
- How to make the recurring membership a success (member retention);
- …just to name a few :)
Let’s talk numbers!
In May 2015, we welcomed 125 new members to the Podcasters’ Paradise family over the 4-day close.
In October 2015, we welcomed 164 new members to the Podcasters’ Paradise family over the 3-day close!!
Our total revenue generated for the 3-day close in October
$98,825, with an invoice total of $239,228
Monday (Day 1 – emailed our entire list + 2 hour countdown to our Podcast list):
32 Pay Plan + 25 Single + 1 Elite = $82,240
Tuesday (Day 2 – emailed our Podcast list 1 time at 12pm PST):
20 Pay Plan + 8 Single + 2 Elite = $46,156
Wednesday (Day 3 – emailed our Podcast list 2 times, plus hosted 2 LIVE Podcast Workshops, 1 of which was a joint workshop):
50 Pay Plan + 21 Single + 1 Elite = $110,832
- What does your audience come to you and ask about all – the – time? For us, it was how to start a podcast; enter: Podcasters’ Paradise.
- What’s your audience’s #1 barrier to taking the action you want them to take? For us, people were telling us Paradise was too big an investment; enter: Free Podcast Course.
- What’s been the #1 way we’ve found to nurture our relationship with our audience and continue to grow our community? Email communication; enter: our segmented podcast list, which is now over 30k strong and it’s what we continue to go back to every time we run a campaign like this.
THRIVE Las Vegas
In mid-October over 400 entrepreneurs met in Las Vegas to learn from the best how to Make Money Matter.
Hosted by Cole Hatter, and featuring greats like Gary Vaynerchuk, Robert Herjavec, and yours truly, JLD (along with some other really incredible rockstars!) the event covered 3 main topics: how to generate money, how to protect your money, and how to make your money matter.
My biggest takeaway from the weekend was the power of moving from success to significance. Every person on stage was uber successful, but they are looking for more in life, ways they can add significance to this world and leave a lasting legacy.
This is a great segue into our next topic:
The Freedom Journal Update
We’re SO fired up to announce some BIG news related to the launch of The Freedom Journal, which will go live via our crowdfunding campaign on January 4, 2016.
…want to hear the BIG news? Make sure you sign up for The Freedom Journal interest list!
Why a crowdfunding campaign when we’ve already funded the project?
1. It’s a great marketing channel; what better way to get people FIRED UP about an amazing project than ask for their help in sharing it and creating some great buzz around it?
2. Opportunity for different levels; instead of JUST having the opportunity to snag the book, the campaign is allowing us to create some really incredible packages for those who want more than just the book.
3. To give back; every time we hit a goal in our campaign, we’ll be donating $25k to Pencils of Promise to build a school in a developing country!
So get ready, Fire Nation – we have SO MANY amazing surprises in store for you as we approach The Freedom Journal launch! But to be sure you’re the first to hear about them, make sure you…
Or just text ‘journal’ to 33444
*Income as of Oct 28, 2015
Product/Service Income: $428,849
Podcasters’ Paradise: $288,026 (invoice total)
Create, grow, and monetize YOUR Podcast.
Free Podcast Course: $0 (it’s free :-)
A 15-day course on how to create, grow, and monetize YOUR Podcast.
WebinarOnFire: $6,670 (invoice total)
Create and present a Webinar that converts.
Free Webinar Course: $0 (it’s free :-)
A 10-day course on how to create and present Webinars that convert!
The Freedom Journal: $0 (still in production, January 2016 launch!)
Podcast Sponsorship Income: $126,550
Fire Nation Elite Mastermind: $6,464
Total Launch Package: $995
Podcast Launch (Audiobook on Audible): $68
Podcast Launch (eBook on Amazon): $76
Affiliate Income: $113,809
*Affiliate links below
- BlueHost: $2,550 (Step-by-step guide and 23 WordPress tutorials)
- Click Funnels: $70,214 (not a typo)
- Podcast Websites: $2,000
- Create Awesome Online Courses: $6,222
- Fizzle: $2,199
- 3-minute expert: $972
- LeadPages: $1,046
- Rick Mulready’s FB ADvantage: $11,267
- Marketing Inc Course: $746
- Ramit Sethi: $10,608
- Audible: $476
- Coaching referrals: $1,300 (email me for an introduction to a mentor for overall online business or a Podcast focused mentor!)
- Tim Paige Voice Over: $90 (ask for the Fire Special)
- Smart Podcast Player: $137
- Infusionsoft: $327
- Aweber: $242
- Amber Ludwig-Vilhauer: $0
- Fire Pole Marketing: $127
- Music Radio Creative: $0
- Libsyn: $0 (promo code Fire)
- WP Curve: $120
- Virtual Staff Finder: $0
- UDemy Podcasting Course: $152
- DotCom Secrets (free book): $0
- Podcasting Press: $100
- Amazon Associates: $1,176
- Other: $3,038
Total Gross Income in October: $542,658
Business Expenses: $101,093
- Advertising: $1,172 (includes Facebook ads)
- Affiliate Commissions (Paradise): $8,797
- Accounting: $250
- Design & Branding: $1,045
- Training & Education: $382
- Consulting: $1,300
- Meals & Entertainment: $1,313
- Merchant / bank fees: $3,589.76
- PayPal fees: $1,188
- Office expenses: $1,419
- Insurance: $6,066 (1-time fee)
- Libsyn: $635
- Other Business Expenses: $36.71
- Promotional / community: $1,732
- Paradise Refunds: $21,408 (invoice total)
- WebinarOnFire Refunds: $2,663 (invoice total)
- Fire Nation Elite expenses: $3,232
- The Freedom Journal: $14,727
- TheMidRoll (Sponsorships): $21,160 (20%)
- Total Launch Package Fees: $660
- Travel: $3,130
- Virtual Assistant Fees: $5,149
- Website Fees: $40
Recurring, Subscription-based Expenses: $2,225
- Adobe Creative Cloud*: $100
- Boomerang*: $14.99
- Brandisty: $24
- Authorize.net*: $91.10
- Cell Phone*: $194
- Google Storage: $9.99
- Go2MyPC: $12
- HelloSign: $13
- FocusAtWill: $45 (1-year)
- Internet*: $110
- eVoice*: $9.95
- Infusionsoft CRM*: $389
- Insurance*: $551
- Chatroll: $150
- PureChat: $20
- ScheduleOnce*: $16
- Skype*: $2.99
- Spotify: $9.99
- Payroll fee: $77
- Workflowy*: $4.99
- MeetEdgar*: $49
- Vimeo Pro: $199 (1-year)
- Wistia: $25
- Sweet Process: $29
- WPCurve*: $29
- Taxes & Licenses (recurring): $77
Total Expenses in October: $103,318
Payroll to John and Kate: $13,193
In our May Income Report, Josh focused on how to pay yourself as an entrepreneur. Check it out!
Total Net Profit for October 2015: $439,340
Less is more: A lesson in time management
It’s tough to put in an 10 hour day, and then at the end of it all not feel as though you really have anything to show for it.
But over the past month, while I’ve experienced many days where I don’t necessarily have something to visually show myself in terms of “tasks or projects accomplished”, I have made massive progress by way of cleaning up our Infusionsoft app and training our newest virtual team member, Goldy.
And through it all, while I’ve been trying to keep up with the blog, manage the Kate’s Take podcast, provide our community with the love and support they deserve, plan for the Podcast Cruise, and still have some personal time to myself (gasp!), I’ve realized that less is more.
But I don’t necessarily mean less is more – as in – you shouldn’t be creating as much as you are, or consuming as much as you are, or ditching a bunch of the projects you’re working on – I’m talking time management.
Note: it might be that creating less, consuming less and “doing less” is in fact more, but only you can determine if that’s the right move to make in order to better serve your audience.
So back to time management. I realized this month that when I gave myself less time to accomplish a task, I actually ended up getting more stuff done.
When I focused fully on 1 project for just 1 hour, instead of 3 projects for 5 hours, I got way more accomplished.
So don’t sell yourself short; tasks will expand to the time you allot them. So don’t allot them so much time, and maybe you’ll surprise yourself. Prove that less, is in fact more.
Looking to hire your own Virtual Team?
Check out our series on growing your own virtual team! We cover the hiring process, interview questions you should ask, what (and how) to delegate, and the importance of building a relationship with your own team!
Alright Fire Nation, that’s a wrap!
Until next month, keep your FIRE burning!
~ Kate & John
Note: we report our income figures as accurately as possible, but in using reports from Infusionsoft to track our product income, they suggest the possibility of a 3 – 5% margin of error.