February 2022 Income At-A-Glance
Gross Income for February: $180,988
Total Expenses for February: $15,631
Total Net Profit for February: $165,357
Difference b/t February & January: -$23,127
% of net profit to overall gross revenue: 91%
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 entrepreneurs 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 that you’re able to pass on what you learn to others through teaching, which is what we aim to do here.
Check out all of our monthly income reports – from the very beginning!
**We’ll receive a commission on the affiliate links below. If you click on my affiliate link and sign up for the products and services I trust and recommend, then I will earn a commission.
Ron Parisi’s Monthly Tax Tip
Hello Fire Nation! Ron Parisi from CPA On Fire here for our February 2022 Tax and Accounting tip. This month, we’re diving back into business sales and exit strategies.
At CPA On Fire, we specialize in working with entrepreneurs to minimize their tax liability while keeping them in line with the ever-changing tax laws.
Our firm has been working with JLD & Kate at Entrepreneurs On Fire for years now, and they’ve included me in these 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 to you, my job doesn’t stop at the verification level; I also provide a new tax and accounting tip every month!
Ron’s February Tax Tip: Handling owners personal contributions post sale of your business
A couple months ago, I talked about business sales and exit strategies. We got a lot of positive feedback surrounding that episode and wanted to continue that discussion.
So, what do you have to do post-sale of your business as a previous owner?
Ultimately, that is tied to how much you are personally involved in the business – that being your reputation, your name, etc.
I like to give the example of Sports Center vs the Dan Patrick Show. Sports Center can rotate through hosts with no real change, whereas The Dan Patrick show wouldn’t be The Dan Patrick show without Dan Patrick.
While it is certainly possible to transition, it is not nearly as simple and easy.
With 20+ years of experience, I’ve been a part of many business sales. Today I want to talk about 3 levels of an owner’s contribution post sale.
3 levels of an owner’s contribution post sale
1. Simplest and straight-forward
Within the sales contract, the owner/seller commits to being available for 3-6 months post-sale to provide a smooth transition.
Things like passing along passwords, introducing large clients, helping with making sure systems are in place.
I advise my clients to specify how many hours the seller will be available during this transition to mitigate any unmet expectations.
2. Consulting agreement
The second level is where the seller enters into a consulting agreement with new owner.
Typically, the timeframe is 6 months to a year. The seller becomes a 1099 contractor/consultant for the new owner.
3. The third (and most complicated) is a pass-off or earn-out
This is for when you, the owner, is intimately involved in the business. The purchase price is usually contingent on certain markers referred to as earn-out provisions.
So if you are a podcaster this could be number of listeners; if you are a blogger it could be clicks or open rates; or it could be as simple sales volume post sale.
Here’s an example: Within CPA On Fire, we created the On Fire System. This is a proprietary system to assist online entrepreneurs who are growing rapidly and scaling their business.
The On Fire System helps them navigate the potential issues that can arise with rapid growth, particularly in their financial operations. Something like that is not tied directly to me, Ron Parisi. Therefore, this allows any transition to occur without me being intimately involved.
Even if you aren’t contemplating a sale any time soon, I recommend you spend time working yourself away from being the center of your business. That way, if/when the time comes, you can sell your business in a simple, smooth process.
For those of you in Fire Nation who are entrepreneurs and business owners and are looking to upgrade your financial operations in 2022, check out our website: CPAOnFire.com!
We’ve been able to get our clients amazing results and would love to help you out as well. Book a call through our website and let us show you how we can help your business grow.
What Went Down In February
Preparing for a BIG Trip
February brought with it a lot of travel for both of us – and preparation for a BIG trip in March!
John hit the road in early February for a week-long ski trip out in Utah with his dad, followed by a quick 24-hour appearance at Providence College to cheer on the Friars men’s basketball team!
Right after John landed in PR, I jumped on my first international flight in over 2 years for my bachelorette party in Los Cabos, MX.
For six days I enjoyed the ultimate R&R + fun-in-the-sun vacay with five of my best girlfriends. We stayed at the Hyatt Ziva, which was an absolutely beautiful property!
After my flight back to PR – and with a little less than a week together – John was full steam ahead preparing for a month-long European adventure!
He starts in France at the end of February for his bachelor party skiing Chamonix with a group of friends.
After that, he’ll jet over to Rome, then hop on a train to Orvieto. From there, he’s embarking on a 10-day hike back to Rome.
From Rome, he’ll head to Istanbul before returning home – almost just in time for the wedding!
Sounds like a pretty epic adventure, right?!
Here’s a sneak peek of his travels so far…
We’ve shared this many times before, but this is the type of lifestyle and location freedom we’ve worked so hard for. Every step of the way we’ve intentionally chosen this path.
There were times when we could have gone for bigger launches, more products, more services, more team members… but that’s not the type of business we want to run.
It hasn’t always been easy, and there have certainly been chapters in our business when trips like this wouldn’t have been possible (for the first 2 years of our business, we didn’t travel at all!)
Today, these trips are very possible, and we’re excited to be sharing these adventures with you!
To check out some of our past travels, visit our travel log!
The Podcast Journal Inventory: LOW!
In 2018 we launched our third journal: The Podcast Journal. The whole idea behind The Podcast Journal was to provide a step-by-step roadmap to go from podcast idea to launch in 50 days.
Each day of the journal gives you one exercise to follow, and at the end of the 50 days you’ll have your podcast launched! No need to worry about what step to take next, or stress about whether you’re forgetting something.
The Podcast Journal has you covered every step of the way.
In February, we received a notification that our inventory for The Podcast Journal is low, which means that over the past 3 years we’ve sold nearly 5,000 copies!
We’ve learned a lot when it comes to launching and selling physical products, our first being The Freedom Journal, which launched on Kickstarter in 2016.
Physical products aren’t easy – inventory, storage fees, and cost of goods sold are just a few things we never had to consider running a fully digital business.
So after we launched The Podcast Journal we said that would be it: when we run out of inventory for our journals, instead of reordering, we’ll only sell the digital format.
The Podcast Journal has been an incredibly fulfilling project, as have our two other Journals. We love supporting entrepreneurs and we love podcasting – it has literally built our entire business. Being able to share our knowledge and experience with others who are looking to share their voice, message, and mission with the world via a podcast is very special to us.
So if you’ve been on the fence about grabbing The Podcast Journal, now is the time to do it, because it won’t be around for long!
Product/Service Income: $174,906
TOTAL Journal sales: Total Journals Sold 144 – $5,006
The Freedom Journal: Accomplish your #1 goal in 100 days!
- Total: $1,700 (51 Freedom Journals sold)
The Mastery Journal: Master Productivity, Discipline and Focus in 100 days!
- Total: $810 (23 Mastery Journals sold)
The Podcast Journal: Idea to Launch in 50 Days!
- Total: $2,496 (70 Podcast Journals sold)
Podcasters’ Paradise: The #1 Podcasting community in the world!
- Recurring: $11,501 (97 recurring)
- New members: $2,867 (11 new members)
- Total: $14,368
Real Revenue: Turn your BIG IDEA into Real Revenue
- Total: $0
Podcast Sponsorships: $155,500
Free Courses that contribute to the above revenue:
Your Big Idea: Discover your big idea in under an hour!
Free Podcast Course: Create and launch your own podcast!
Funnel On Fire: Create a funnel that converts!
Affiliate Income: $6,082
*Affiliate links below – if you click on my affiliate link and sign up for the products and services I trust and recommend, then I will earn a commission.
Resources for Entrepreneurs: $4,875
- Audible: $0
- Bluehost: $0
- Click Funnels: $4,831
- CovertKit: $44
- Coaching referrals: $0 (email me for an introduction to a mentor for overall online business or a Podcast focused mentor!)
Resources for Podcasters: $631
- Podcasting Press: $157
- Podcast to Profit 2.0:0
- Splasheo: $74
- Fusebox: $0
- Libsyn: $316 (Use promo code FIRE for the rest of this month & next free!)
- Repurpose House: $45
- UDemy Podcasting Course: $39
Other Resources: $576
- Amazon Associates: $166
- Other: $410
Total Gross Income in February: $180,988
Business Expenses: $13,628
- Advertising: $0
- Affiliate Commissions (Paradise): $241
- Accounting: $0
- Cost of goods sold (Journals): $773
- Consulting: $226
- Design & Branding: $0
- Dues & Subscriptions: $40
- Education: $144
- Fulfillment: $0
- Legal & Professional: $0
- Meals & Entertainment: $354
- Merchant / bank fees: $1,481
- Amazon fees: $1,747
- PayPal fees: $108
- Office expenses: $1,977
- Community Refunds: $0
- Promotional: $0
- Travel: $2,441
- Virtual Assistant Fees: $4,000
- Website Fees: $96
Recurring, Subscription-based Expenses: $2,003
- Adobe Creative Cloud: $100
- Audible: $16
- Boomerang: $50 (team package)
- Authorize.net: $38
- Google: $49
- Glow.fm: $5
- Bonjoro: $45
- Cell Phone: $136
- Internet: $40
- eVoice: $12
- Infusionsoft CRM: $241
- Insurance: $89
- Libsyn: $195
- Linktree: $6
- TaxJar: $19
- Taxes & Licenses: $523
- Shopify: $324 (annual fee)
- Zoom: $55
- Xero: $60
Total Expenses in February: $15,631
Payroll to John & Kate: $15,900
Wondering what we do with all of our net revenue? We share all in our April 2017 Income Report :)
Total Net Profit for February 2022: $165,357
Biggest Lesson Learned
Selling Physical Products
This lesson was inspired by The Podcast Journal inventory running low and receiving that notification this month.
While any type of product or service is going to require some level of upkeep and constant improvement, physical products (and everything that needs to be running in the background in order for them to be successful) require more.
It’s something I don’t think a lot of business owners think about before diving head-first into physical product sales (you don’t know what you don’t know!)
It sounds fun and easy, so why not?!
But anyone who has been involved in physical product sales knows that it’s not a set-it-and-forget-it type of business model.
That’s not to say you shouldn’t get involved in physical product sales if that’s your business plan (and you’ve fully vetted that plan). But for us, given the other digital products and offers we have, physical product sales are not high up on our list of things we want to continue long-term. At least not right now.
So as we continue to sell our physical journals on Amazon, we’ll sit tight when it comes to reordering.
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 a combo of Infusionsoft & Xero to track our product and total income / expenses, they suggest the possibility of a 3 – 5% margin of error.