Here’s the latest Entrepreneur On Fire Podcast for your enjoyment!
December 2016 Income At-A-Glance
Gross Income for November: $216,474
Total Expenses for November: $71,376
Total Net Profit for November: $145,098
Difference b/t December & November: +$1,228
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.
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 December Tax Tip: What it Means to be An Employer
According to psychologists, the three biggest fears for humans are:
- public speaking,
- death, and
- hiring their first employee.
Okay, okay, fine – I made the last one up 😉
But for entrepreneurs and small business owners, it’s probably not far from the truth. Bringing on an employee for the first time comes with the fear of increased costs, extra taxes and paperwork, and making sure you have the cash flow to keep your new employee paid and happy.
Note: this tax tip is geared specifically towards hiring an employee – not bringing on a contractor or virtual team member. Want to learn more about the differences? Check out our October 2014 Income Report where I review employees vs. contractors and virtual assistants.
I want to share this tax tip because you should absolutely know what you’re getting yourself into and make sure your business is ready for that jump, because the truth is, bringing employees into your business can be a great thing.
So to make sure you’re prepared, here are three keys to surviving your new life as an employer.
3 Keys to Surviving as a New Employer
1. Hire an Amazing Payroll Company
Is it possible to handle your own payroll?
In theory, sure, and I’ve had clients try to do just that. And every single time, without fail, they switch to a payroll company within a few months of starting.
Payroll taxes are really, really confusing.
There’s employer taxes, employee taxes, withholding taxes, unemployment taxes and potentially state
and local taxes on top of all that.
That’s not to mention things like state and federal laws to monitor, wage garnishments, and other hiccups that can make life miserable while running your own payroll.
Oh, and did I mention that some of these taxes will be filed monthly, some will be filed quarterly, and some will be filed annually?
Is your head spinning yet?
GOOD. I’m trying to make sure you never attempt to do this yourself!
Hiring a great payroll company will take all of this responsibility out of your hands. You will essentially tell them who gets paid what and when, and they will take care of the rest.
Don’t try and do this yourself; hire the experts!
When it comes to payroll companies, there’s no one we recommend more than Gusto. They’re affordable AND they’ll make your payroll life infinitely easier!
2. Know Ahead of Time Your Costs Will Go Up
If you are used to paying contractors, switching some or all of them to employees will increase your costs.
Now, instead of just paying their wages, you have to add in employer social security and medicare taxes (about 7.6% of their pay), unemployment taxes (probably a few hundred dollars per quarter), and workers comp insurance.
Most of these costs will be tax deductible, which takes the small bite out of them, but a safe estimate is that making someone an employee over a contractor will increase your costs by about 10% of their annual pay.
3. Have an Understanding of Your State and Federal Employment Laws
I know, I know, I told you in tip #1 that this was the reason you should hire an expert – and I stand by that. But you still have to have a decent understanding of the laws involved with being an employer.
First of all, the government will ultimately hold you responsible for any mistakes made in this area, even if you have a payroll company. So you need to know what’s going on and make sure nothing is being missed.
My best recommendation here is to talk with a CPA and an attorney you trust before bringing on your first employee.
Find out if there are any laws you need to be aware of, if there are any contracts you need to have signed, and if there are any other do’s or don’ts both you and your payroll company need to be following.
A great resource if you live, work and will be hiring employees in the United States is SHRM.
Adding your first employee can be a great move for your business, but you need to make sure you’re doing things properly.
Follow these three tips and you will make this often scary process much easier to handle!
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!
Kahuna’s Accounting Tip
Frank Lunn is Founder and CEO of Kahuna Accounting, a virtual entrepreneur accounting team assisting Entrepreneurial Victory Achievers to achieve their victory!
Frank’s December Accounting Tip: Learning to SURF Success in 2017
There are lots of buzzwords attributed to entrepreneurship, but if I had to choose only two I would pick Intentional and Adaptable.
‘Intentional’ is being specific; focused to know exactly what you want, why you want it, and what you need to do to achieve it.
Intentional is an aiming mechanism for where you want to go.
‘Adaptable’ is a response mechanism. Once started, you make adjustments based on new information or results. No one goes from their departure point to their intended destination without making changes based feedback received along the way.
Adaptability allows you to accept feedback and correct course.
At Kahuna Accounting, we use a surfing metaphor as a strategy tool to adapt and respond to entrepreneurial waves.
We can’t control waves in our life, but we can respond utilizing the S.U.R.F Strategy™ to adapt and make the best of the waves we are given.
Accounting for entrepreneurs is accounting for success utilizing your numbers to keep score and provide feedback. You can apply the SURF Strategy to assist you in achieving your goals.
- Survey your financials.
- Understand how you did in relation to how you wanted to do within a time period.
- Respond and adapt as necessary.
- Focus on what you intentionally set out to achieve.
SURF as an entrepreneur success strategy is simple and yet complex: you have to put it to action in order to reap the benefits, and lucky for us, it’s a skill you can apply in every area of your business and life.
Happy SURFing in 2017!
What Went Down In December
The Mastery Journal Arrives!
December was a month filled with celebrations of all kinds.
1. We celebrated John’s 37th birthday!
2. The night before, the very first complete hard copy of The Mastery Journal arrived
3. The holidays!
Receiving the first hard copy of The Mastery Journal was definitely a treat – and a huge relief.
Allow me to explain…
The timeline we’re on for a January 23rd launch on Kickstarter required that A LOT of things happen at very specific times. Because of all the dependencies, missing a deadline could drastically hurt that timeline.
That said, the timeline from when we submitted final files to the printer and when The Mastery Journal actually went to print was super tight, and so while it would have been nice to have full hardcopies sent to us for in-depth review, we didn’t do that.
Needless to say, having the hardcopies arrive and holding them in our hands, thumbing through them, seeing the binding and the print – we were very grateful they turned out amazing!
The Freedom Journal on Amazon
Since hiring our most recent new team member here in Puerto Rico, Ian, we’ve been able to make some big moves on Amazon as it relates to our Freedom Journal sales.
When Ian came on board The Freedom Journal on Amazon was the first project he took on, which included:
- Keyword research
- Coaching w/ a listing expert
- A lot of testing
While the holidays certainly have played a role in our increased sales over the past couple of months, we’re confident we wouldn’t be where we are right now without Ian’s contributions!
We looked forward to continuing to track trends with our listing and sharing them with you right here in our monthly income reports 😉
Towards the middle of December we started to experience first-hand just how a big a deal the holidays are in Puerto Rico.
From an Ugly Christmas Sweater Party to a Golf Cart Light Parade to music and cheer in the Plaza, Palmas Del Mar was like one big holiday festivity super center!
After attending every event possible in Palmas, we each headed our own way: home to spend Christmas and New Years with family and friends.
San Diego was beautiful as ever…
While Maine flirted with zero degrees nearly every day!
I got to experience the best of both worlds, and John finally got in a 3-day Sugarloaf trip in after having leaned his skis for over 3 years.
No matter where you spent the holidays, we hope you were snuggled up with family, friends and loved ones.
Happy New Year, Fire Nation!
Product/Service Income: $140,929
The Freedom Journal: Accomplish your #1 goal in 100 days!
- Shopify: $20,941 (420 Freedom Journals & 91 Digital Packs sold!)
- Amazon: $28,425 (737 Freedom Journals sold!)
- Total: $49,366
Podcasters’ Paradise: The #1 Podcasting community in the world!
- Recurring: $15,490 (7 annual, 198 monthly)
- New members: $10,125 (47 new members)
- Total: $25,615
Podcast Sponsorship Income: $59,250
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: $1,319 Learn how to Create & Present Webinars that Convert!
Affiliate Income: $75,545
*Affiliate links below
Resources for Entrepreneurs: $25,660
- Audible: $161
- BlueHost: $1,650 (Step-by-step guide and 23 WordPress tutorials)
- Click Funnels: $20,140
- Coaching referrals: $2,527 (email me for an introduction to a mentor for overall online business or a Podcast focused mentor!)
- ConvertKit: $102
- Disclaimer Template: $148 (legal disclaimers for your website)
- Fizzle: $569
- LeadPages: $363
Courses for Entrepreneurs: $46,431
- Ryan Levesque’s ASK: $2,543
- DSG’s Create Awesome Online Courses: $15,105
- Ramit Sethi: $19,193
- Self-Publishing School: $498
- Nick Stephenson’s First 10k Readers: $354
- Michael Hyatt’s Best Year Ever: $7,574
- Rick Mulready’s FB ADvantage: $97
- Bryan Harris’ 10k Subscribers: $790
- Josh Turner’s LinkedIn Academy: $277
Resources for Podcasters: $1,255
- Libsyn: $700 (promo code Fire)
- Pat Flynn’s Smart Podcast Player: $106
- UDemy Podcasting Course: $29
- Podcasting Press: $420
Other Resources: $2,199
- Amazon Associates: $863
- Other: $1,336
Total Gross Income in December: $216,474
Business Expenses: $68,307
- Advertising: $4,497
- Affiliate Commissions (Paradise): $1,096
- Accounting: $350
- Cost of goods sold: $6,403
- Design & Branding: $1,980
- Education: $59
- Legal & Professional: $367
- Meals & Entertainment: $704
- Merchant / bank fees: $2,427
- Amazon fees: $7,033
- Shopify fees: $361
- Stripe fees: $26
- PayPal fees: $350
- Office expenses: $728
- Payroll Taxe Expenses: $1,407
- Promotional / events: $318
- Paradise Refunds: $2,889
- WebinarOnFire Refunds: $1,319 (invoice total)
- Shipwire: $6,000
- Sponsorships: $10,956
- Show notes: $408
- Total Launch Package Fees: $175
- Travel: $1,015
- The Freedom Journal: $9,009
- Virtual Assistant Fees: $5,570
- Website Fees: $2,860
Recurring, Subscription-based Expenses: $3,069
- Adobe Creative Cloud: $100
- Avangate: $470
- Boomerang: $80 (team package)
- Brandisty: $24
- Authorize.net: $91.10
- Cell Phone: $258
- CCBill: $20
- Dropbox: $99 (annual subscription)
- Google Storage: $9.99
- Go2MyPC: $12
- Internet: $332
- eVoice: $9.95
- Infusionsoft CRM: $359
- Insurance: $551
- Libsyn: $323
- Chatroll: $49
- PureChat: $20
- ScheduleOnce: $9
- Skype: $2.99
- Shopify: $20
- Scout: $10
- TaxJar: $19
- Workflowy: $4.99
- MeetEdgar: $49
- Wistia: $25
- WPCurve: $29
- Zapier: $15
- Taxes & Licenses: $77
Total Expenses in December: $71,376
Payroll to John, Kate & PR Team: $18,395
Total Net Profit for December 2016: $145,098
Biggest Lesson Learned
Goals and 3 Words
Inspired by Chris Brogan, I started my own tradition of choosing 3 words based on my goals for the New Year to help represent my vision and guide me towards success. If you’ve never done this before, I highly recommend it.
Having my 3 words last year, which were Systems, Leverage, and Strength, not only helped me get back on track when I was feeling a little ‘out of the lines’, but they also helped encourage and motivate me.
This year, my 3 words are Breathe, Commit, and Share.
While my goals remain somewhat consistent with those I had in 2016, my words seem completely different.
Turns out, they actually aren’t all that different in meaning.
If you haven’t set your goals for the New Year, and if you’re feeling like having 3 words to help guide you throughout the year might be helpful, then I encourage you to take 30 minutes today to sit down, reflect, and write it down.
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:
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