November 2016 Income At-A-Glance
Gross Income for November: $205,459
Total Expenses for November: $61,589
Total Net Profit for November: $143,870
Difference b/t November & October: +$47,711
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 at EOFire.
**We’ll receive a commission on the affiliate links below.
CPA On Fire’s Monthly Tax Tip
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 for years now, and John and Kate have 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’ll also be providing tax and accounting tips to you along the way!
Josh’s November Tax Tip: What is a tax write-off exactly?
In each month’s income report, I share a tax tip – usually involving writing off various items on your taxes.
But after getting a ton of questions on the subject – and seeing even more bad information out there – I finally realized we need to spend time discussing what a tax “write-off” or “deduction” actually is!
Let’s start with an example:
You followed last month’s income report tip and turned a trip to an NBA basketball game into a legit “meals and entertainment” expense by bringing your attorney along to discuss business info.
Altogether, with your meals and game tickets, you spent $500.
You run it by your CPA and they confirm this is a legit business expense – that you’ll receive the meals and entertainment rate of 50% as a tax deduction (or $250).
But what does that $250 deduction actually mean?
Does it mean you pay $250 less in taxes?
Sadly, and contrary to what many believe, the answer is no.
What it does do is reduce your taxable income by $250. Meaning, if your taxable income was $10,000, after the deduction it is now $9,750.
So how much actual money does a tax deduction or write off save you?
The answer, as with everything else in taxes, is: it depends.
But the simplest way to estimate your true savings is to take your marginal tax rate (this is the rate your next dollar is taxed at) and multiply that by the deduction.
So if you’re currently in the 25% tax bracket, and you get that $250 tax deduction, the actual amount you save on taxes is about $63.
All this isn’t to minimize the power of tax deductions, because they are still an awesome perk of owning a business!
But it should reveal one big mistake I see a lot of entrepreneurs make: justifying purchases they don’t truly need because they can take it as a tax deduction.
I get clients all the time asking if they should buy a brand new truck, or computer, or whatever else they want – but don’t need – so they can get a tax deduction. And unless you like spending a lot of money in order to save a little money, the answer is definitely: don’t do it!
You should never, under any circumstances, buy something for the sole purpose of a tax deduction.
Instead, think of a tax deduction like a sale on products or services you need, or were going to buy anyway.
Going back to our example from last month, if you were going to attend that NBA basketball game anyway, and you turn it into a business event you can write-off, then it’s basically like getting a 25% discount on the meal and tickets.
And on the other side of things, if you can start thinking of ways to turn personal expenses into business expenses, you can then apply that 25% savings to many of the things you purchase anyway.
A tax write-off is a powerful tool for entrepreneurs to use, but as with any other tool, you need to truly understand it before being able to use it effectively.
If you have a question you would like to see covered in a future income report, leave it in the comments section below, or reach out to me directly!
As always, 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* If you haven’t checked out Josh’s FREE course on business entities yet, you can get it here!
David Lizerbram’s November Legal Tip
Business Partnership Basics
A partnership is the default type of business arrangement between two or more people.
If you’re working with someone, and you haven’t formed a Corporation or LLC, then you are a partnership. Partnerships can be a very simple and cost-effective type of business arrangement, but there are certain risks to be aware of.
Types of business partnerships
There are two basic kinds of business partnerships:
1. General Partnerships, and
2. Limited Partnerships
Most partnerships are General.
This means that the partners all participate in the running of the business and assume liability for the company’s debts and obligations. So if the company is sued, all partners may be legally liable.
Limited Partnerships require specific contractual language to set up.
In an LP, one or more of the partners are actively involved in the business and have liability for the company’s debts. These people are sometimes called the “General Partners” (yes, that’s a bit confusing) or “Managing Partners.”
The other partners are sometimes called “Silent Partners.” They have an investment in the business, but in exchange for limited liability, they have less say over the day-to-day running of a business.
Having a written partnership agreement
Regardless of what type of partnership is right for you, it’s always best to have a written Partnership Agreement, and it’s recommended that you work with a business lawyer who can help draw up the document.
The Partnership Agreement should cover at least the basic terms of the partnership, such as the percentage of ownership (50/50 or otherwise), each partner’s responsibilities, compensation, and how any disputes will be resolved.
Partners should also create a Buy-Sell Agreement to be used in case one or more partners decides to leave – or has to leave due to an emergency.
Sometimes this Buy-Sell language is incorporated into the Partnership Agreement, and sometimes it’s a separate document. In either case, if you have a solid plan for how your business relationship will come to an end, it’s more likely that it will be a long and successful one.
Also, consider obtaining “Key Person Insurance” to fund the Buy-Sell Agreement. This way, if something unexpected happens to your partner, you won’t have to come up with the cash to buy out her share of the business.
Reach out to David on Twitter or check out his website linked below.
*Bonus* For a free 3-Step Checklist on Business Partnerships, click here!
What Went Down In November
November was a big brainstorming month for us: we not only started to put together some major marketing pieces for The Mastery Journal (more on that in just a minute), but we also sat down to reflect on some discoveries we’ve made.
As it relates to Funnel On Fire, our discovery was that our affiliate income from Click Funnels has been amazing over the past several months.
So with that discovery, John and I sat down to think about ways we could “double down”.
Here’s what that looked like, and how we came up with the idea to create Funnel On Fire: How to create a funnel that converts!
The thought process
Wow – we’ve been getting a lot of affiliate revenue from Click Funnels recently; I wonder why / where it’s coming from?
Well, we did transfer our Free Course delivery over to CF, and on every one of our delivery pages (Free Course videos) there’s a CF logo that is our affiliate link.
Conclusion: presumably, people are signing up for our Free Course, loving the pages we use to deliver the course (example here: eofire.com/fpc4), seeing at the bottom right it’s from CF, clicking that link, and then signing up for CF = affiliate revenue for us.
The brainstorming begins
What if we not only created another Free Course with more pages (equals more exposure for our CF affiliate), but we actually built that Free Course around something we know our audience wants and needs and that is directly related to CF?
Questions we get all the time:
- how do I grow my email list?
- how do I know what lead magnet to create?
- how do I build a funnel?
These are all related to needing a platform like CF.
The idea: Create a Free Course called Funnel on Fire
Well, we’ve done Free Courses before, so we know we need:
- opt in page
- thank you page
- course outline
- campaign in IFS with all the emails / videos
- video pages for each “lesson”
- an offer / goal for the funnel
With a timeline in place, this essentially becomes our plan.
Step 1: create course outline (John and Kate brainstorm for 30 minutes in Kate’s office and come up with the outline)
Step 2: create the content around the outline (Kate writes content for each video lesson – there are 8 total from our outline)
Step 2.1: what’s the offer? (what do we want them to do throughout / after taking the free course – work that into the content / CTA for the Free Course)
Step 3: create keynote presentations for the videos (Kate takes the content she created and puts it into a keynote template)
Step 4: once keynotes are complete, record videos (Kate records videos for each lesson with the Keynotes she created)
Step 4.1: upload videos to Vimeo
Step 5: put campaign together in IFS (emails, timers, opt in form, ty page)
Step 6: create pages in CF (opt in, ty page, video pages – grab embed codes from Vimeo for video pages)
Step 7: connect campaign and CF pages – start testing
Step 8: start promoting (list of promotable places – John mentions on EOFire, we add to our website, we include in our income report)
So, there you have it: an idea plus our brainstorming and creation process from start to finish!
Are YOU ready to learn how to create a funnel that converts? If so, join us in Funnel On Fire to learn how!
Viva Puerto Rico!
During the month of November we had the pleasure of hosting two amazing groups of people here at EOFire HQ:
1. Our friends Ryan & Katie from San Diego + John’s best friend, Ryan
2. John’s parents and niece, KC!
While the first group of visitors made for a nice adventure / mastermind combo, the second group brought a lot of beach exploring and relaxation here in Palmas Del Mar.
Trekking to the top of El Yunque in the pouring rain:
Hanging out at the EOFire HQ for some pool and BBQ time:
Taking a drive along Ruta Panoramica (known as “the Spine”):
It’s always great having visitors, but of course, it requires a significant amount of planning and preparation – something we’re getting quite good at :)
Before each set of visitors arrived, John and I each sat down and created a list of things we’d have to take care of ahead of time so that our time with friends and family wasn’t totally overrun by work.
Now, this is not to say we didn’t work while company was here, but the amount of time we worked was drastically reduced due to our preparation and planning.
Kate’s Take Season 4
November brought the beginning of the final season of Kate’s Take for 2016 on What it means to be an entrepreneur.
After deciding to switch to Seasons on the podcast at the beginning of 2016, I’ve felt so much more connected to the Kate’s Take listeners because they have actively been participants in the content itself. Each Season on the podcast has been a direct result of votes from listeners.
I was a little nervous about Season 4 since it broke the mold in terms of providing actionable, step-by-step content around business strategies. But since its launch, where we’ve been covering topics like Mindset and facing fear, How being an entrepreneur creates freedom, and Taking ownership, I’ve been receiving some incredible feedback!
If you want to find out more about this Season on Kate’s Take head over to our home base!
Marketing The Mastery Journal
January 2017 is fast-approaching, which means November was high time to kick things off for our marketing for the launch of The Mastery Journal.
This month alone we’ve:
- Started documenting our project plan as a whole
- Created a team and individual tasks in Asana
- Finished 3 photo shoots for The Mastery Journal images (editing starts in Dec)
- Finalized the trailer for The Mastery Journal
- Ordered 30,000 copies to be printed
- Created our behind-the-scenes email campaign to share where we’re at
- Started our outreach / asking for support
- Hired our FB ads manager
We’ve still got a ways to go in terms of marketing, but with the above checklist we’re well on our way to making sure our marketing campaign is on lock down for our January launch!
Here’s a sneak peek behind-the-scenes are our most recent photo shoot:
If you haven’t signed up for our interest list yet, click here! When you sign up you’ll receive a free 30-day PDF form of The Mastery Journal along with behind-the-scenes updates on our progress!
Product/Service Income: $157,810
The Freedom Journal: Accomplish your #1 goal in 100 days!
- Shopify: $23,363 (516 Freedom Journals & 66 Digital Packs sold!)
- Amazon: $12,597 (323 Freedom Journals sold!)
- Total: $35,960
Podcasters’ Paradise: The #1 Podcasting community in the world!
- Recurring: $11,740 (170 monthly)
- New members: $11,325 (36 new members)
- Total: $23,065
Podcast Sponsorship Income: $71,250
Speaking Fee: $20,000
Podcast Websites: $5,000 Your all-in-one podcast website peace of mind
Free Podcast Course: A free 15-day course on Podcasting
Free Webinar Course: A free 10-day course on Webinars
Free Goals Course: A free 8-day course on Setting & Accomplishing Goals
Funnel On Fire: A free 8-day course on Creating a Funnel that Converts!
WebinarOnFire: $1,991 Learn how to Create & Present Webinars that Convert!
The Fire Path Course: $115 A step-by-step business roadmap
Affiliate Income: $47,649
*Affiliate links below
Resources for Entrepreneurs: $32,264
- Audible: $163
- Aweber: $0
- BlueHost: $1,050 (Step-by-step guide and 23 WordPress tutorials)
- Click Funnels: $23,656
- Coaching referrals: $2,490 (email me for an introduction to a mentor for overall online business or a Podcast focused mentor!)
- Disclaimer Template: $99 (legal disclaimers for your website)
- Fizzle: $302
- Infusionsoft: $500
- LeadPages: $1,904
- Virtual Staff Finder: $100
- TopTal: $2,000
- Shopify: $0
- WP Curve: $0
Courses for Entrepreneurs: $12,518
- Ryan Levesque’s ASK: $1,047
- David Siteman Garland’s Create Awesome Online Courses: $3,201
- Scott Voelker’s The Amazing Seller: $0
- Ramit Sethi: $0
- Lewis Howes’ Legacy: $0
- Self-Publishing School: $0
- Stu McLaren’s Tribe: $1,661
- Nick Stephenson’s First 10k Readers: $330
- Eben Pagan’s Blueprint Launch: $508
- Lisa Sasevich: $1,278
- Rick Mulready’s FB ADvantage: $97
- Bryan Harris’ 10k Subscribers: $348
- Fire Pole Marketing: $0
- Grant Baldwin’s Booked & Paid to Speak: $48
- Ray Higdon’s 3 Minute Expert: $4,000
- Josh Turner’s LinkedIn Academy: $0
Resources for Podcasters: $1,381
- Libsyn: $931 (promo code Fire)
- Pat Flynn’s Smart Podcast Player: $115
- Music Radio Creative: $0
- UDemy Podcasting Course: $35
- Podcasting Press: $300
- Amber Ludwig-Vilhauer (done for you services): $0
Other Resources: $1,486
- Amazon Associates: $989
- Other: $497
Total Gross Income in November: $205,459
Business Expenses: $58,448
- Advertising: $1,375
- Affiliate Commissions (Paradise): $1,706
- Accounting: $350
- Cost of goods sold: $4,966
- Design & Branding: $2,018
- Education: $108
- Legal & Professional: $772
- Meals & Entertainment: $1,133
- Merchant / bank fees: $1,513
- Amazon fees: $3,134
- Shopify fees: $3,214
- Stripe fees: $7
- PayPal fees: $485
- Office expenses: $1,348
- Payroll Taxes: $1,839
- Promotional / events: $125
- Paradise Refunds: $2,460
- WebinarOnFire Refunds: $0 (invoice total)
- Shipwire: $6,000
- Sponsorships: $16,500
- Show notes: $372
- Total Launch Package Fees: $175
- Travel: $3,776
- The Freedom Journal: $86
- The Mastery Journal: $387
- Virtual Assistant Fees: $2,590
- Website Fees: $2,009
Recurring, Subscription-based Expenses: $3,141
- Adobe Creative Cloud: $100
- Avangate: $34
- Boomerang: $80 (team package)
- Brandisty: $24
- Authorize.net: $91.10
- Cell Phone: $210
- CCBill: $20
- Google Storage: $9.99
- Go2MyPC: $12
- Graphly: $99
- Internet: $332
- eVoice: $9.95
- Infusionsoft CRM: $360
- Insurance: $551
- Libsyn: $338
- Chatroll: $150
- PureChat: $20
- ScheduleOnce: $9
- Skype: $2.99
- Shopify: $20
- Scout: $10
- TaxJar: $19
- Payroll fee: $223 (switched to ADP)
- Workflowy: $4.99
- MeetEdgar: $49
- Wistia: $25
- WPCurve: $29
- Zapier: $15
- Zencastr: $216 (annual fee)
- Taxes & Licenses: $77
Total Expenses in November: $61,589
Payroll to John, Kate & PR Team: $23,880
Total Net Profit for November 2016: $143,870
Biggest Lesson Learned
The importance of asking yourself for answers
It’s often the case when we get ready to do something big in our business – start a new project, or set a new goal – we immediately think about who we can turn to for guidance or help. We all know the saying about “taking the lead from those who have gone before us”.
This is definitely a wise saying – one that we live by ourselves here at EOFire.
But only to a certain extent… because you can’t rely on others for everything.
Here’s what I mean by that:
In November I realized through a few conversations with peers that more often than not YOU are the one with the answers when it comes to your next most important step.
Trouble is, we rarely give ourselves the time to take a step back and reflect on the things we already have experience doing – things that we already know.
So next time you start working on a new project, or you think about setting your next big goal, before you run out and look to someone else for the answers, ask YOURSELF for the answers first.
Here’s a list of questions I ask myself when I’m brainstorming a project or my next big goal:
- Have I done something like this before?
- If so, what project was it?
- What was the same? (that way I can pull from that experience)
- What was different? (that way I know what I need to research)
- What are the steps I have to take to get the big project done?
- What’s my estimated timeline?
After answering questions like these about your project or goal you’ll be able to evaluate where you’re at in terms of what you already know (what you can pull from previous experiences) and what you don’t know (things you’re basically starting from scratch with).
This list of experiences – what you already know – along with the things you need to research, will then become the start of your project plan.
Asking yourself for the answers before running out and looking to someone else for them will help you get the foundation of your project set. And with a foundation, everything that follows will be much easier to accomplish.
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.
This post was written by Kate Erickson, Content Creator and Implementer at EOFire. Follow Kate on Social: