Here’s the latest Entrepreneur On Fire Podcast for your enjoyment!
March 2017 Income At-A-Glance
Gross Income for March: $490,641
Total Expenses for March: $117,962
Total Net Profit for March: $372,679
Difference b/t March & February: +$180,873
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 March Tax Tip: Tax Time FAQ’s, part II
Alright Fire Nation, as you can imagine, I am asked a TON of tax questions this time of year. So for the next few months I’m going to give you FAQ style answers to the questions I’ve been asked most frequently this tax season!
For Tax Time FAQ’s, part I check out February’s income report!
1. I didn’t pay myself from my business; why do I still owe taxes?
This is a common question from business owners who are turning a profit for the first time.
You didn’t pull any money out of the business or pay yourself a “salary”, so you figure no taxes will be owed come tax time.
Unfortunately the IRS doesn’t care whether you took the money out or not, they are going to tax you on all the profits of the business.
This should tell you two things:
First, don’t be afraid to take money out; you are getting taxed the same amount regardless of how much you leave in or take out of the company.
Second, you need to plan accordingly. Depending on how high those profits are and what state you live in, you need to be setting anywhere from 20 – 30% aside for taxes.
2. I owe a lot in taxes and don’t have the money to pay; should I file an extension?
You unexpectedly owe a lot of money in taxes and don’t have the money to pay them, so you file an extension, which gives you until 10/15 to file.
Sounds like a great plan, right?
While the IRS will gladly give you those extra six months to file, they still expect you to pay at least 90% of the amount due by the original due date. If you don’t, they will hit you with “failure to pay” penalties, which are 0.5% of the amount due per month that it’s late.
They will also add interest to the bill.
So what’s a better plan?
File your taxes on time, pay as much as you are able by the deadline, and set up a payment plan with the IRS for the rest of the amount due.
You’ll still have to pay them interest, but at least you’ll avoid the failure to pay penalties (plus, the IRS is surprisingly easy to work with on payment plans).
3. Should I use my retirement accounts to pay large tax bills?
Okay, so you found yourself in the above scenario, owing a lot of taxes you don’t have the money to pay, and you don’t want to pay the penalties or interest.
Instead you decide to take some money out of those IRA’s or 401k’s you’ve stashed away and use it to pay your taxes.
The problem with this is you are creating substantially more taxes for yourself!
First, you are going to owe ordinary taxes on the amounts you take out. Then, they are going to hit you with an additional 10% tax penalty on top of that.
When it’s all said and done, you’ll be paying an extra 35-45% in taxes on that money (when you could have been been earning on that tax deferred income for the next few decades).
And what’s worse?
With all those extra taxes you created by cashing these out you will likely create an even worse tax situation for yourself next year, which will require you to be pulling out more retirement funds, which will create more taxes, etc.
It’s a vicious tax cycle we see all the time. My advice? Do not touch your retirement accounts unless absolutely necessary.
Owing taxes isn’t fun. But it’s something every successful entrepreneur has to deal with. If you follow this months tips you can minimize the damage when you are hit with those unexpected tax bills.
And 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 Monthly Legal Tip
Can I Play Music on My Podcast?
Let’s start with this: under U.S. copyright law, you can’t just play any recording you want, whenever you want, through whatever medium you want.
So what are the rules?
What follows is a very simplified version of how music copyright works in the U.S.
Music Copyright 101
When you hear a recording of a song, there are, most likely, two separate copyrights embodied in that song:
- The copyright in the musical composition (the words and music), and
- The copyright in the sound recording.
We all know that there are often many different versions of the same song, sometimes recorded by different artists at different times. Well, each of those versions contains the same underlying musical composition (the “song”), but each also comprises a unique sound recording.
Sometimes the songwriter owns both copyrights.
If I write a song today and record it, I own the copyright in the musical composition and the sound recording. But often those rights will end up being owned by separate people or entities.
For example, a record company may own the rights to the recording (the “master”), while a music publishing company may own the rights to the musical composition. It can get more complicated from there, but this is enough to deal with for this Income Report.
Back to Podcasts
Every time you download or stream a podcast, you’re making a copy of the audio file containing that podcast.
The word “copy” in the previous sentence should provide a clue as to why that matters.
Copyright includes, among other things, the right to prevent others from making copies of your work.
So okay, let’s say you understand all this, and you just really, really want to play your favorite song on your podcast – and you want to do so legally.
In order to do so, you’ll have to obtain the necessary rights for both the musical composition and the sound recording. That may mean obtaining rights from multiple organizations.
I want to be clear – the restrictions I’m writing about apply not just to whole songs, but also to clips. There is no general legal right to play “just a few seconds” or any other part of a song without permission.
What if you just say, “The heck with that, I’m playing a Beyonce song on my podcast, and nobody can stop me! It’s a free country!”
Well, in that case, you’d be looking at statutory damages of up to $150,000 per song.
What are the Alternatives?
For most folks starting out in the podcast world, it’s not going to be feasible to license your favorite Beyonce song, and even if you record your own version, the licenses for the musical composition might be out of the average podcaster’s price range.
There are a variety of free or low-cost alternatives out there, though.
Some of them, such as PremiumBeat, operate much like stock photo companies.
Other songs are made available under a variety of different Creative Commons licenses.
It’s OK, My Podcast is Fair Use!
Fair use is an extremely complex and misunderstood aspect of copyright law.
Just because you think it’s “fair use” doesn’t mean it is. Just because you’re a nonprofit or your podcast is for educational purposes doesn’t mean you’re entitled to a fair use defense to copyright infringement.
I wish using music within podcasts was easier and more affordable, but this is the world that Congress, in their infinite wisdom, has created.
Happy podcasting, everybody!
For lots more information about music and other legal issues related to podcasting, click here to download my free ebook Podcast Law!
What Went Down In March
The Mastery Journal sales open!
You heard right, Fire Nation! After fulfilling our Kickstarter campaign that ended February 24th – which meant shipping over 4,000 copies of The Mastery Journal to backers – we went straight to work on getting The Mastery Journal site live.
We can’t wait for you to receive your own Mastery Journal, which we’ve been using religiously here at EOFire to help improve our own productivity, discipline and focus.
If you’re ready to master these 3 skills in just 100 days, head over to TheMasteryJournal.com and grab your Mastery Journal today!
The EOFire team shifts
If you listen to Kate’s Take, then you might remember my episode on What I learned about running a successful business (my 2016 in review post).
In that episode I shared some pretty raw feelings about what it’s like to manage a team. To quote myself, “It’s the best and the toughest thing you’ll do as an entrepreneur.”
In March we transitioned our most recent full-time hire into an independent contractor. Ian will continue to help us crush sales for The Freedom Journal and The Mastery Journal on Amazon, and that will be his sole focus.
Hiring the right people for the job is not easy, and sometimes you’ll put a whole lot of time and bandwidth into on-boarding and training only to find out that it’s not the right fit.
My two biggest takeaways from this particular experience are this:
1. “Hire for attitude and train for skill”
I’ve heard it a hundred times while talking with others, or from reading loads of business books, but sometimes hearing it isn’t enough. Sometimes you have to experience it for it to finally hit home.
2. Don’t be afraid to say goodbye
While we’re incredibly grateful to have a solid virtual team, we have had to say goodbye to a few team members here at EOFire over the past 4+ years. What I’m finding is that each time, our team grows stronger.
It’s scary to lose an employee; you automatically think “oh my goodness, how are we going to get all those things done now?!” But 10 times out of 10, you’re going to figure it out, so don’t be afraid to say goodbye if you know in your gut it’s the right time to do so.
Our next step with Team Fire is finding John a personal assistant here in Puerto Rico, and we’re also pursuing something we’ve been talking about for a long time: bringing on a #3.
We’re exited for this next chapter with our core team!
Three weeks in San Diego & Social Media Marketing World
March was an action-packed month for us; we flew to San Diego on March 7th to spend three weeks with family, friends, peers and finally, over 3,500 attendees and speakers at Social Media Marketing World (SMMW).
Oh, and John squeezed in a trip to Utah for a guys ski weekend, too!
Time with family and friends was epic and a great reminder that it’s not about where you are, but who you’re with.
After some well-deserved R&R, we dove head first into a mastermind week with Jill & Josh Stanton, followed by crushing SMMW!
From the welcome party to the opening keynote and all the way to the final session, SMMW was incredible. You can read all about it here in our recap post!
Three quick highlights:
1. This was my first year speaking at the event!
I was SO honored to take the stage at THE biggest social media marketing event in the world. My topic: Blog to Podcast: How to Create an Audio Blog.
On top of that, John was a part of two panels: one on guest podcasting and one on how to monetize your podcast. EOFire was definitely representing!
2. Masterminds galore!
We coordinated our trip so that we could get in some solid mastermind time with two of our business fav’s: Jill and Josh Stanton. Having nearly a week with them before the conference even started was a huge plus.
3. QT with Thinkific
Several weeks ago we reached out to the team over at Thinkific for a chat around whether their platform would be the right fit for our Podcasters’ Paradise membership site.
Lucky for us, it’s shaping up to be a GREAT fit, and during SMMW we had the pleasure of meeting and hanging out with four of their team members, including their founder Greg.
We’re super excited to reveal all about our Thinkific experience once we’ve successfully migrated Podcasters’ Paradise over to the platform!
While it wasn’t our first big trip since moving to Puerto Rico, being in San Diego for three weeks really hammered home the reality we’ve created: the ability to travel when and where we want.
I’ll never forget the day I had to cancel a 4-day trip to Hawaii in 2011 because my boss denied me the time off from work. I remember thinking that day “What kind of life am I living… where I can’t even take a trip when I want to?”
Travel has always been a huge passion for both of us, and as a result of creating freedom in our lives through EOFire, we have some exciting plans lined up this year and in 2018.
Stay tuned – in next month’s income report we’ll be sharing some unique conference and meet up opportunities that we’ve never done before!
Product/Service Income: $439,323
The Freedom Journal: Accomplish your #1 goal in 100 days!
- TheFreedomJournal.com: $25,771 (276 Freedom Journals & 88 Digital Packs sold!)
- Amazon: $25,947 (662 Freedom Journals sold!)
- Total: $51,718
The Mastery Journal: Master Productivity, Discipline and Focus in 100 days!
- Kickstarter campaign: $280,852 (3,659 backers!)
Podcasters’ Paradise: The #1 Podcasting community in the world!
- Recurring: $17,956 (5 annual, 191 monthly)
- New members: $21,975 (70 new members)
- Total: $39,931
Podcast Sponsorship Income: $59,600
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!
Skills On Fire: $66
Affiliate Income: $51,318
*Affiliate links below
Resources for Entrepreneurs: $38,872
- Audible: $689
- BlueHost: $1,350 (Step-by-step guide and 23 WordPress tutorials)
- Click Funnels: $29,426
- Coaching referrals: $3,925 (email me for an introduction to a mentor for overall online business or a Podcast focused mentor!)
- ConvertKit: $113
- Disclaimer Template: $44 (legal disclaimers for your website)
- Fizzle: $232
- LeadPages: $747
- Social Media Marketing World: $600
- Virtual Staff Finder: $1,736
- WPCurve: $10
Courses for Entrepreneurs: $9,139
- DSG’s Create Awesome Online Courses: $7,170
- Nick Stephenson’s First 10k Readers: $212
- Ray Higdon’s 3 Minute Expert: $452
- Ray Edwards Copywriting Academy: $438
- Self-Publishing School: $447
- Bryan Harris’ 10k Subscribers: $420
Resources for Podcasters: $2,321
- Libsyn: $1,705
- Pat Flynn’s Smart Podcast Player: $266
- Podcasting Press: $280
- UDemy Podcasting Course: $70
Other Resources: $986
- Amazon Associates: $961
- Other: $25
Total Gross Income in March: $490,641
Business Expenses: $115,668
- Advertising: $1,084
- Affiliate Commissions (Paradise): $2,618
- Accounting: $350
- Cost of goods sold: $28,251 (includes Kickstarter fee)
- Design & Branding: $1,980
- Education: $50
- Legal & Professional: $35
- Meals & Entertainment: $821
- Merchant / bank fees: $1,340
- Amazon fees: $11,929
- Shopify fees: $434
- Stripe fees: $18
- PayPal fees: $820
- Office expenses: $580
- Payroll Tax Expenses / Fees: $1,641
- Promotional / events: $148
- Paradise Refunds: $2,600
- WebinarOnFire Refunds: $1,344 (invoice total)
- Sponsorships: $10,000
- Show notes: $288
- Travel: $11,040 (includes flights to AUS for WeArePodcast & London for Youpreneur)
- The Freedom & Mastery Journal: $35,079
- Virtual Assistant Fees: $3,121
- Website Fees: $97
Recurring, Subscription-based Expenses: $2,294
- Adobe Creative Cloud: $100
- Boomerang: $80 (team package)
- Brandisty: $24
- Authorize.net: $91
- Cell Phone: $200
- CCBill: $20
- FastSpring: $40 (one-time fee)
- Feedblitz: $15
- Internet: $300
- eVoice: $9.95
- Infusionsoft CRM: $359
- Insurance: $551
- Libsyn: $209
- Chatroll: $49
- PureChat: $20
- ScheduleOnce: $9
- Skype: $2.99
- Shopify: $20
- TaxJar: $19
- Workflowy: $4.99
- MeetEdgar: $49
- WPCurve: $29
- Zapier: $15
- Taxes & Licenses: $77
Total Expenses in March: $117,962
Payroll to John & Kate: $17,362
Total Net Profit for March 2017: $372,679
Biggest Lesson Learned
Balancing responsibility and trust
I’ve been doing a lot of brainstorming recently.
Not around big projects or how to create better systems, but around how I can improve the way I work.
On one hand, I know I need to delegate more, and that a good chunk of my day is spent on tasks and busywork that I shouldn’t be doing.
On the other hand, I don’t feel like our team is built up to the point where I can hand those tasks off and trust that it will be done in a timely manner without overworking someone.
Then comes the obvious solution: hire another person.
However, how do you balance responsibility and trust – even when you have enough team members?
In my experience “small” mistakes add up fast, and if, as a business owner, you’re responsible for everything that happens within (and to) your business, is it possible to balance responsibility and trust and still feel like your time is being spent wisely?
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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