August 2018 Income At-A-Glance
Gross Income for August: $199,842
Total Expenses for August: $26,828
Total Net Profit for August: $173,014
Difference b/t August & July: +$47,313
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.
**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.
Josh Bauerle’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 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!
Josh’s August Tax Tip: Gross profit margin (what is it & why you should care)
In the world of accounting, it’s easy to get wrapped up in all the different numbers. In fact, it’s enough to make your head spin. And while I love numbers more than anyone, the truth is most businesses can do very well by focusing on just a few key metrics.
Most businesses we work with are focusing almost entirely on two numbers: gross income and net income. Both numbers are very important, but a metric we’ve been finding that a lot of businesses ignoring is gross profit margin.
And if you’re an inventory-based business, ignoring this number could be a major mistake.
What is Gross Profit Margin?
Gross margin is a fairly simple accounting metric once you understand it. You’re simply taking your total gross income, subtracting JUST the cost of goods sold, and dividing that by the total gross sales.
That cost of goods sold number includes the actual cost of making/purchasing your product, your costs to ship it to your warehouses, and your merchant fees for selling on platforms like Amazon.
Lets look at an example.
The XYZ company sells shovels.
They pay $2 per shovel, $1 shipping for each shovel, and $2 in Amazon fees to sell it FBA (fulfilled by Amazon).
They then sell each shovel for $10.
So in this scenario their gross profit (sales minus cost of goods sold) is $5, which makes our gross profit margin a very healthy 50 percent.
Whats does this mean?
In a nutshell, gross profit margin tells you how much money you have left from each sale to pay all your other expenses, like your employee or contractor wages, advertising, software, office expenses and all the other operating expenses it takes to run your business outside of the expense of the product itself.
In tight times you can cut labor costs, advertising, software, and most other operating costs. But your cost of goods sold is very tough to lower.
So looking at that gross profit margin shows whether the business itself is feasible or not.
I know this is diving a bit deeper into the nitty gritty parts of accounting than we’re used to doing here on these income reports, but if you’re an inventory-based business, and especially an ecommerce seller, this is vital.
And so many aren’t tracking it.
Here’s are a few final key things to know about gross profit margin.
The bottom line here is you need top notch bookkeeping that can give you a very clear gross profit margin. And if you have multiple products, then it needs to be broken down by each product so you know which is doing great and which is dragging you down.
Be relentless in looking at this metric and figuring out how it can be improved. Can you cut bad products? Sell more of the great products? Add new products?
Use a Professional
I say it just about every month, but when it comes to specific numbers and ratios it’s even more important. Your numbers are only as good as the people putting them in. Garbage in, garbage out.
You need a professional bookkeeper to not only make sure the numbers are accurate, but advise you on how they’re looking.
Inventory-based businesses have much bigger accounting needs than service-based business, and gross profit margin is just one key metric that needs to be tracked. So make sure your numbers are accurate and ready to tell you the stories you need to hear when it comes to evaluating where your business is at.
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* Claim your spot in Josh’s FREE Course on Business Entities!
What Went Down In August
Looking back, about 75% of our time in August was spent heads down working on projects we wanted to wrap up before our trip to Europe in September.
Did we make it happen?…
We made a TON of progress and accomplished some pretty massive goals in August, all despite our contracted CTO leaving unexpectedly for another business opportunity.
The major projects we worked on – and finished – in August are:
- An evergreen version of The Podcast Masterclass
- A revised version of our free course, Your Big Idea
- A brand new Free Podcast Course on Thinkific
It took a whole lot of FOCUS to get there, but we’re feeling GREAT about every one of these projects!
How’d we make it happen?
Well, we implemented a daily roundup email that was a pretty big game-changer in helping us stay on track. Tune in to this month’s income report recording to hear us go into more detail on that :)
And if you’re interested in diving into the step-by-step of how we prepare for all of our trips – whether it be a long weekend at an event, a week-long vacation, or a 60-day trip across Europe – be sure to keep your eye on the blog and Kate’s Take for this 4-part series on Trip Prep!
Want to follow along on our adventure throughout Europe?
Tune in to this month’s income report recording to hear where we’ll going, be sure you’re following John on Instagram for posts and stories about our journey, and check in at EOFire.com/travel for our trip updates!
We’ve done it multiple times in the past, but will we ever do it again?
Every couple of years we do an evaluation of where we’re at with Podcasters’ Paradise – the time investment required from us personally, the value we’ve added within via new resources and video tutorials, along with the growth of the community overall.
In August we decided to increase the investment for Paradise, plus simplify things.
Instead of breaking it out between Content and Community, we made the decision to simplify with a straight recurring model, which means no more lifetime access.
We did a fairly strong push leaving up to the increase, and in 3 days welcomed 71 new members to Podcasters’ Paradise!
We’ve been going strong with Podcasters’ Paradise for nearly 5 years now, and we can’t wait to see what the future holds for this incredible community of podcasters!
The Podcast Journal on Shopify
In August we got to push LIVE on a very special project: The Podcast Journal!
The Podcast Journal is now available on Shopify and we’re working on getting it up on Amazon as well!
If you’re ready to go from Idea to Launch with your own Podcast in just 50 days, then head on over to ThePodcastJournal.com and grab your own copy today!
Product/Service Income: $160,400
TOTAL Journal sales: 437 Journals for a total of $16,573
The Freedom Journal: Accomplish your #1 goal in 100 days!
- TheFreedomJournal.com: $1,291 (29 Hardcovers & 3 Digital Packs)
- Amazon: $7,995 (209 Freedom Journals sold!)
- Total: $9,286
The Mastery Journal: Master Productivity, Discipline and Focus in 100 days!
- TheMasteryJournal.com: $483 (13 Hardcovers & 7 Digital Packs)
- Amazon: $4,056 (118 Mastery Journals sold!)
- Total: $4,539
The Podcast Journal: Idea to Launch in 50 Days!
- ThePodcastJournal.com: $2,748 (43 Podcast Journals sold & 15 Digital Packs)
Podcasters’ Paradise: The #1 Podcasting community in the world!
- Recurring: $22,742 (188 monthly, 1 annual)
- New members: $35,659 (97 new members)
- Total: $58,401
Real Revenue: Turn your BIG IDEA into Real Revenue
- New members: $12,775 (43 new members)
The Revenue Crew: An Elite Mastermind ON FIRE!
- New members: $8,370 (3 monthly, 2 annual)
Podcast Sponsorship Income: $59,000
Podcast Websites: $5,000 Your all-in-one podcast website peace of mind
Free Courses that result in 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: $39,442
*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: $21,953
- Audible: $220
- BlueHost: $150 Step-by-step guide and 23 WordPress tutorials included! Disclaimer: This is my affiliate link and I will receive a commission if you sign up through my link
- Click Funnels: $20,801
- Coaching referrals: $445 (email me for an introduction to a mentor for overall online business or a Podcast focused mentor!)
- ConvertKit: $134
- Disclaimer Template: $73 (legal disclaimers for your website)
- Fizzle: $130
Courses for Entrepreneurs: $13,827
- Create Awesome Online Courses by DSG: $5,397
- Webinars that Convert by Amy Porterfield: $0
- Self-Publishing School by Chandler Bolt: $0
- ASK by Ryan Levesque: $8,430
- Virtual Staff Finder by Chris Ducker: $0
Resources for Podcasters: $2,460
- Pat Flynn’s Smart Podcast Player: $0
- Podcasting Press: $365
- Tim Paige’s Make My Intro: $250
- Libsyn: $1,744 (Use promo code FIRE for the rest of this month & next free!)
- UDemy Podcasting Course: $101
Other Resources: $1,202
- Amazon Associates: $247
- Other: $955
Total Gross Income in August: $199,842
Business Expenses: $24,170
- Advertising: $691
- Affiliate Commissions (Paradise): $1,418
- Accounting: $980
- Cost of goods sold: $2,100
- Consulting: $1,020
- Design & Branding: $0
- Education: $145
- Legal & Professional: $70
- Meals & Entertainment: $230
- Merchant / bank fees: $1,602
- Amazon fees: $3,977
- PayPal fees: $300
- Shopify fees: $301
- Office expenses: $158
- Community Refunds: $690
- Promotional: $1,454
- The Freedom, Mastery & Podcast Journal: $5,000
- Travel: $848
- Virtual Assistant Fees: $3,023
- Website Fees: $163
Recurring, Subscription-based Expenses: $2,658
- Adobe Creative Cloud: $100
- Boomerang: $60 (team package)
- Brandisty: $24
- Bonjoro: $45
- Authorize.net: $70
- Cell Phone: $202
- Google Suite: $50
- Internet: $80
- eVoice: $10
- Infusionsoft CRM: $309
- Insurance: $648
- Libsyn: $225
- Chatroll: $49
- Shopify: $214
- TaxJar: $19
- Taxes & Licenses: $523
- Zapier: $15
- Zoom: $15
Total Expenses in August: $26,828
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 August 2018: $173,014
Biggest Lesson Learned
Not every project can be a heck yes
It’s so easy to get wrapped up in the great ideas and opportunities you see around the Internet, or hear about from friends and mastermind buddies.
Sometimes it almost seems as if “you should be doing that, too”.
Am I right?
Don’t be fooled.
Just because a project is a heck yes for someone else DOES NOT mean that it’s a heck yes for you.
As a business owner, you have to be able to look at your overall business goals and make sure that the way you’re spending your time is helping support those goals – not detract from them.
It’s really easy to start new projects, but is it just a distraction or an excuse for you to focus on something other than what you should actually be doing?
There’s a lot of power that comes with saying no, and I highly recommend you try it next time you hear about a project from someone else and think “I should be doing that, too!”
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.