September 2022 Income At-A-Glance
Gross Income for September: $182,899
Total Expenses for September: $23,393
Total Net Profit for September: $159,506
Difference b/t September & August: -$72,089
% of net profit to overall gross revenue: 87%
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 September 2022 Tax and Accounting tip.
This month, we’re talking about Owner’s Distributions vs. Owner’s Salary.
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 September Tax Tip: Owner’s Distributions vs. Owner’s Salary
Question: “Ron, can you please clarify owner’s draw, distributions and dividends comparatively to owner’s salary?”
Answer: The answer is not as simple as you might think. There are many determining factors, one of the most important being your company’s entity structure.
4 General Types of Reporting/Treatment Based on Entity Structure
1. Schedule C – single member LLC’s filed under your personal tax return.
Unless your Schedule C is a very small side hustle, it is best for the company to have its own EIN number with IRS, its own bank account, and its own credit card.
Although always separated from personal accounts, owners can take distributions from business account at any time, but it is not an owner salary.
Taxes (self-employment income – 15.3% federal rate) are paid on the net income yearly.
2. Partnerships – 2 or more owners of a company.
Partnerships are more complex but allow more flexibility for how owners get paid.
Partnerships have two options for pulling out money: partner distributions and guaranteed payments. Neither the partner distributions or guaranteed payments are a salary.
Taxes (self-employment and income taxes) are paid on the net income by each partner yearly.
3. S-Corp – only entity that offers owner salary vs owner distributions.
S-Corporations offer relief from the self-employment income tax found in Schedule C and Partnership structures.
S-Corps have two options for paying its owners: salary and distributions.
In an S-Corp, an owner needs to pay themselves a reasonable compensation via salary or distributions. The owner’s salary is calculated by how much it would reasonably cost to outsource your job. Any money that is withdrawn from the business account that is not salary is considered a distribution.
A distribution is to compensate you for the risk of running the business.
Be aware of debt and how much distributions you take.
4. C-Corp – double taxation.
C-Corporations are the only entity that pays its own taxes, and the owner pays taxes on both salary and dividends.
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.
David Lizerbram’s September Legal Tip
4 Keys to Choosing the Right Lawyer for Your Business
Sooner or later, every business is going to need legal representation. A lawyer can either be an expensive line item or a huge asset for your business. As an entrepreneur, it’s up to you to make that choice.
If you haven’t hired a business attorney before, the process can be intimidating. I’ve seen the process many times, having been hired by hundreds of clients to represent them over the course of my career.
When the client (that’s you) is informed and knows what they’re looking for, there’s a much greater likelihood of having a positive result for both sides – the lawyer and the client.
Ultimately, we both want the same thing: a mutually-beneficial long-term business relationship.
To help you achieve that result, I’ve put together this list: 4 Keys to Choosing the Right Lawyer for Your Business.
1. Figure out when you need to hire a lawyer
This is going to vary for every client. Generally speaking, the sooner you establish this crucial relationship and start getting good advice, the better off your business is going to be.
However, good legal advice isn’t free. (On the other hand, bad legal advice is easy to find.)
If you’re just starting out, I’d suggest you start contacting business lawyers and asking them what their rates are for basic services like an initial consultation or a business formation. You can put those numbers into the budget as you get the funds together to start your business – whether it’s a solo, bootstrapped operation, or one where you’re seeking investment capital.
Finally, be sure to hire a lawyer before you do something that’s going to get you into trouble. For example, if you’re forming a partnership, entering into a lease, taking money from investors, or putting a product out there that might create some liability, hiring a lawyer to protect your rights should be a high priority.
2. Focus on the type of lawyer you need
Most business attorneys can handle typical formation needs. This might include creating a corporation or LLC, putting together a partnership agreement, or drafting common business contracts.
If you just need a trademark, or you only have a question about tax law, then you can focus on an attorney who specializes in those areas.
If you’re looking for general, long-term legal counsel for your business, find a business attorney, and he or she can put you in touch with specialists from time to time as needed – whether they’re in the same firm or outside counsel.
Think of your business lawyer like your general practice doctor: you go to them for checkups and your regular medical needs; if and when you need a specialist, they’ll let you know and make a referral.
3. Find a lawyer who understands – or is willing to learn about – your market or niche
This is a follow up to #2. Yes, you need a general business attorney. But if that attorney has no clue about your industry or how your business operates, there are bound to be communication challenges.
This doesn’t usually mean that your lawyer needs to be an expert in your industry.
It does mean that your legal counsel should have a willingness to learn and understand what your company does every day and who your main customers and strategic partners are. These points should be factored into your legal strategy.
4. Make sure you’re comfortable with their fee structure
Your potential lawyer should not be afraid or nervous to discuss fees with you. And you shouldn’t be hesitant about bringing it up. Whether you’re a solo entrepreneur or seeking legal advice for a big company, you still need to be able to plan for your legal costs.
The most important part of this conversation is to be sure that the fee arrangement works for you, the client.
If you prefer hourly, fixed fee, or some other type of arrangement, be sure to communicate that to the attorney. As long as you’re upfront about your expectations, he or she should be able to work with you; if not, this probably just isn’t a good match. And that’s OK: as I said at the top, not every attorney-client pairing is the right one.
Hopefully applying these 4 Keys will speed up the process of finding the right match for you and your business!
If your business has legal needs, feel free to contact me. I’m always happy to talk with members of Fire Nation!
What Went Down In September
Interview of the Month
Investing in Life Essentials with Ivan Anz
3 Value Bombs
- Becoming successful requires you not to be the person creating your success.
- Philanthroinvesting is getting a financial return for your philanthropy.
- Life essentials is everything humans need – and will constantly need – whatever the situation is.
Housing Philanthroinvesting book on Amazon – Grab your copy now!
Philanthroinvestors – Change lives while making money. Learn more about how to invest with a purpose!
EOFire Turns 10!
Happy anniversary, Fire Nation!
It’s crazy to think Entrepreneurs On Fire has been rockin’ and rollin’ for 10 whole years!
To celebrate, we not only wanted to take a moment to thank you so much for being a part of this journey with us, but also to reflect on the lessons we’ve learned from being entrepreneurs for 10 years.
From our loft in Portland, Maine, to a shared desk in our 1-bedroom apartment in San Diego, to a 2-bedroom upgrade on Sail Bay (John’s office was our living room), and now to Puerto Rico… not only has EOFire come a long way – so have we.
In true EOFire fashion, we put together a deep dive of 10 Things We Know After 10 Years to transparently share with you the biggest lessons we’ve learned.
Here they are, but be sure to check out the entire post to get the full breakdown!
- Know Your Niche
- Know That Consistency Is Key
- Know How to Set and Accomplish Your Biggest Goals
- Know This: You Are The Average of The 5 People You Spend The Most Time With
- Know Your Avatar
- Know What is ‘Enough’
- Know Your Numbers
- Know How To FOCUS
- Know That You Have The #1 Solution To a Real Problem
- Know That Creating Systems is The Fastest Way to Scale
100 Day Goal Challenge
Are you ready to accomplish a BIG goal in 100 days?
It’s one of the biggest struggles entrepreneurs face: you know you want to accomplish something meaningful, but you lack the accountability and focus to get it done.
So when we realized Sept 23rd marked exactly 100 days until the new year, we decided to take action!
For 100 days I’m publishing a brand new episode on the Kate’s Take podcast, in addition to posting in our private Facebook group, to help you reach your goal by the start of 2023.
It’s not too late to join us. All you have to do is search for Kate’s Take in your favorite podcast app, then join us in our private Facebook Group for daily posts, accountability, and support from others who are on this 100 day goal challenge journey!
September 2022 Income Breakdown*
Product/Service Income: $176,369
TOTAL Journal sales: Total Journals Sold 155: $4,691
The Freedom Journal: Accomplish your #1 goal in 100 days!
- Total: $2,897 (102 Freedom Journals sold)
The Mastery Journal: Master Productivity, Discipline and Focus in 100 days!
- Total: $585 (20 Mastery Journals sold)
The Podcast Journal: Idea to Launch in 50 Days!
- Total: $1,209 (33 Podcast Journals sold)
Podcasters’ Paradise: The #1 Podcasting community in the world!
- Recurring: $9,955 (86 recurring)
- New members: $1,597 (7 new members)
- Total: $11,552
Real Revenue: Turn your BIG IDEA into Real Revenue
- Total: $75
Podcast Sponsorships: $160,005
Podcast Launch: Audiobook: $36 | eBook: $10
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: $7,186
*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: $6,530
- Audible: $49
- Bluehost: $0
- Click Funnels: $6,066
- CovertKit: $15
- Coaching referrals: $0 (email me for an introduction to a mentor for overall online business or a Podcast focused mentor!)
- Ask by Ryan Levesque: $400
Resources for Podcasters: $255
- Podcasting Press: $0
- Splasheo: $50
- Fusebox: $0
- Libsyn: $159 (Use promo code FIRE for the rest of this month & next free!)
- Repurpose House: $0
- UDemy Podcasting Course: $46
Other Resources: $401
- Amazon Associates: $85
- Other: $316
Total Gross Income in September: $182,899
Business Expenses: $20,524
- Advertising: $374
- Affiliate Commissions (Paradise): $142
- Cost of goods sold (Journals): $877
- Fulfillment: $0
- Consulting: $167
- Charitable Contributions: $722
- Design & Branding: $0
- Dues & Subscriptions: $173
- Legal & Professional: $1,033
- Meals & Entertainment: $560
- Merchant / bank fees: $5,082
- Amazon fees: $2,592
- PayPal fees: $143
- Office expenses: $34
- Community Refunds: $1,579
- Promotional: $0
- Travel: $2,851
- Virtual Assistant Fees: $4,100
- Website Fees: $95
Recurring, Subscription-based Expenses: $2,869
- Adobe Creative Cloud: $100
- Audible: $16
- Accounting: $375
- Boomerang: $50 (team package)
- Business Insider: $13
- Authorize.net: $36
- Google: $49
- Five Below: $11
- Bonjoro: $45
- Cell Phone: $140
- Internet: $143
- eVoice: $12
- Infusionsoft CRM: $241
- Insurance: $669
- Libsyn: $217
- Linktree: $6
- PicMonkey: $8
- TaxJar: $19
- Taxes & Licenses: $523
- Patreon: $40
- Shopify: $36
- Zoom: $55
- Xero: $65
Total Expenses in September: $23,393
Payroll to John & Kate: $15,900
In our May 2014 Income Report and our June 2016 Income Report, Josh focuses on how to pay yourself as an entrepreneur. Check them out!
Wondering what we do with all of our net revenue? We share all in our April 2017 Income Report :)
Total Net Profit for September 2022: $159,506
Biggest Lesson Learned
Someone I love to follow when it comes to all things habits is James Clear.
In one of his articles, How to Start New Habits that Actually Stick, he breaks down habits into 4 stages:
I found his breakdown of these stages so helpful; when you understand how the mind works and why we do the things we do (or don’t do the things we don’t do), you can make immediate changes to improve your behaviors.
I recorded an episode on Kate’s Take as a part of my 100 day goal challenge where I break down James’ phases and talk about how to start new habits.
Tune in to my episode on Habits!
Building any habit is following a simple set of steps, and knowing this should make habits feel incredibly attainable! After tuning into this episode or reading James’ article, you’ll be armed with all the information you need to make it happen.
Now you just need to take action.
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.