Here’s the latest Entrepreneur On Fire Podcast for your enjoyment!
May 2017 Income At-A-Glance
Gross Income for May: $196,304
Total Expenses for May: $81,185
Total Net Profit for May: $115,119
Difference b/t May & April: -$15,126
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 May Tax Tip: Charitable Donations
Charitable donations are an item I get a ton of questions on, and it’s top of mind for me right now, as this past weekend I was in Texas representing a client in an audit that mainly centered around a large amount of charitable donations claimed on their 2015 tax return.
Luckily, the client had done everything by the book, and we came out of the audit without a scratch.
So this month, I’m going to tell you how you can do the same.
First, let’s talk about what a charitable donation is…
To qualify as a tax deductible donation, the money and/or property must have been donated to an IRS-approved nonprofit organization. That would include most churches, schools and places like Goodwill and Salvation Army.
What it does not include is donations to friends in need, donations at fundraisers that go directly to individuals, and even most of the Go Fund Me campaigns for people in need. If it’s not an IRS-approved nonprofit, it’s off the table for a tax deduction.
Next, let’s talk about what records you need to keep to protect yourself.
In the event you are like my client and the IRS comes calling, they classify donations in two categories: cash and non-cash.
Here’s a run down on both.
This is the easiest one to show proof of.
First, make sure you record exact dates, amounts and who they went to for each donation. If you can make the donation via check, even better.
Second, make sure the organization you donate to issues you a tax receipt. Do these things and you’re fire-proof against the IRS.
This is where things can get tricky; non-cash donations consist of any type of property donated to a nonprofit.
For most people, it will be clothing, furniture, toys and other household items given to places like Goodwill and Salvation Army.
If your total non-cash donations are under $500, there’s not much you need to do. Simply ask the organization to give you a receipt and you’re clear.
But if it’s more than $500, the level of proof you’ll need to provide is higher.
First, you’ll want to record exactly what you donated, the estimated date you purchased it, the estimated price you paid for it and the current value of it.
So if you donate a couch to Goodwill, you’ll record you bought it on April 3, 2012 for $2,000 and the current value is $600.
Second, you’ll want to be even more sure the organization gives you a receipt with the donation value on it. This will be huge.
Finally, if your non-cash donations are unusually high that year – say over $10,000 – I would even go so far as taking a picture of each item you donate. Example: for your couch, take a quick pic of it and store with your records.
And one more note here: if you have a non-cash item you donated worth more than $5,000 that you’ve owned for more than one year, the IRS requires you get a third party appraisal to determine the exact value. This typically comes into play for people who donate vehicles.
Charitable donations are an awesome way to lower your tax liability and help those less fortunate – a true win/win.
But it’s also an area that is frequently abused on tax returns, and the IRS watches carefully. Follow the rules above and you’ll be in the clear in the unlikely event they do decide to take a closer look.
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’s May Legal Tip: Copyright & Trademark
What Can I Do When Someone Takes My Logo or Image?
This question came from EOFire listener Lori Eisenstadt: What can you do when someone takes your logo or image and uses it online?
First let’s separate logos and images.
If you create an image, you own the copyright. This doesn’t apply to online memes where you just add some words – I’m talking about an image you created yourself or that an employee created for your company.
If you find that someone has taken your image and used it online, there are a few things you can do.
1. Of course, you can contact the person who’s using your content and nicely ask them to take it down.
They may or may not comply. If not, you can hire a lawyer and sue them, but that’s a bit of an extreme – and very costly – step.
2. Fortunately, there’s a simpler option: if the website, app, or service is located in the U.S. or does business in the U.S., they’re required to comply with the Digital Millennium Copyright Act (“DMCA”).
The DMCA has what’s called a “safe harbor” provision for online service providers.
Websites that host user-created content – for example, every social media site – can’t be sued when infringing material appears on the site, as long as they comply with “takedown notices.”
These are notices provided by copyright holders that a piece of infringing content has appeared on the site.
If you go to any website or app that has user-generated content and search around a bit, you’ll find a section called “Copyright” or “DMCA” or “legal” – something like that.
They will have either a form you can fill out or an email address to which you can send the notice. In most cases, the content will be taken down quickly at that point.
Often the site will then initiate a process to ensure that the notice was valid.
Be sure to keep good records of images and other content that you create, so if you ever have to prove that you actually created it, you’ll be able to show that you’re the rightful owner.
Use caution, because some people abuse the DMCA takedown process – see this blog post for some examples.
The same info that applies to images also applies to logos (since a logo is a type of image), but logos are also trademarks.
A trademark is anything that identifies your company as the source of goods or services.
If someone is using your logo without permission – and they’re using it to market competing goods or services – they may be liable for trademark infringement and unfair competition. This is the type of situation where you’re definitely going to want to bring a trademark lawyer in to advise you.
Trademark law is complex, and there may be valid reasons for someone else to use your logo – for example, if they’re doing a “taste test” to see if consumers prefer your goods or theirs, or if they’re reporting factual information about your product or service.
If you’re not ready to hire a lawyer, and your trademark is being used online in a manner that you think is violating your rights, you may be able to take advantage of a takedown procedure similar to the one described above in the “Images” section.
Again, search the website or app for instructions on how to do so.
Wrapping It Up
It’s important to make sure that your valuable intellectual property is not being used against your wishes. Be sure to search for your brand name regularly on Google and your preferred social media networks. And, of course, always contact a legal professional if you run into a potentially serious issue.
Thanks, Lori, for submitting this question!
If you have a legal question that you’d like me to cover on a future EOFire Income Report, click here to email me and I’ll be sure to give you a shout-out when I join John and Kate to talk about your legal questions!
Want to stay on top of how intellectual property issues like trademarks and copyrights affect your business? Download my free Intellectual Property for Entrepreneurs Checklist!
What Went Down In May
The Mastery Journal 1-day
Following suit with The Freedom Journal Kickstarter campaign, The Mastery Journal Kickstarter campaign offered a pretty special pledge level: a full day with JLD in Puerto Rico.
The investment was not insignificant: $10,000, not including travel.
Because we know pricing is a tough thing to wrap your head around, we want to breakdown how we came up with this number, and why it’s worth every penny.
How’d we come up with 10k?
Charging what you’re worth is a known struggle for most entrepreneurs, especially when you’re first starting out.
Has John always charged $10k for his time?
Not even close. There was a definite progression up to this number, which developed in line with the following factors:
- John’s desire to do one-on-one coaching;
- Other revenue streams; and
- Our bigger vision.
When you’re first starting out, you likely don’t have multiple income streams. While this should be your goal, you have to build up to it one step at a time.
So when coaching was the only income stream we had, and EOFire and JLD were still proving themselves as a great brand and a credible leader, the investment matched that.
As the brand and JLD became more widely known and trusted, so did our diversification. With other income streams coming into play like Fire Nation Elite and Podcasters’ Paradise, we were able to start weighing our time investments in different areas.
The scales started to tip, and one-on-one coaching was no longer the only way we were generating revenue.
Because of this, John was able to increase the investment for one-on-one time with him.
And when we talk about the bigger vision, this is for the business as a whole. If John were to spend all of his time doing one-on-one coaching, we never would have been able to do things like create Podcasters’ Paradise, or launch The Freedom and Mastery Journals.
If your goal is to grow a coaching business, then that’s one thing; however, if your goal is to create products and other types of services, then there has to be a point where you start doing less coaching and more implementation.
How do we know it’s worth it?
Investing $10k is a big deal, and with it comes pressure and expectations. But as we’ve grown EOFire and JLD has proven his expertise and knowledge time and time again, we have proof that the one-on-one investment is worth it.
Plus, John now has the confidence of nearly 1,700 conversations with today’s most inspiring entrepreneurs, and real relationships with master minds like David Siteman Garland, Pat Flynn, Amy Porterfield, Russell Brunson, and Tim Ferriss – just to name a few.
YOU believing that you’re worth every penny and that you will deliver on the expectations you’ve set is key to not only knowing that you’ve priced your product or service correctly, but also knowing that whoever makes that investment will also walk away knowing it was worth every penny.
Saul, welcome to Puerto Rico!
Now that we’ve given some background, let’s have a peek at John’s first 10k Day for 2017!
In 2016, I hosted two $10k days, and in 2017 I’ll be doing the same 🙂
The first person to rock the $10k day this year was Saul Marquez.
It started out with Saul and I jumping on a 30-minute strategy call the week before he came down to Puerto Rico so I could get a solid sense of where he was at with his business, where he wanted to go, and what he wanted most out of his ‘Day with JLD‘.
After our chat, I was FIRED up because I knew Saul was in the perfect place in his life and business to spend a day under The JLD Microscope.
Saul rolled into Puerto Rico Friday evening and I took him out on the town to meet a few friends and have a fun first night. We limited ourselves to one drink each, as we wanted to be 100% for Saturday’s 12-hour strategy session.
Early Saturday morning, we both awoke bright eyed and bushy tailed, prepared to IGNITE the day.
Without going into too much detail of what Saul and I accomplished, I’ll share that by the end of the first hour I had identified a MAJOR hole in Saul’s business model:
He had no FUNNEL.
In my words, a FUNNEL is the journey you take your Avatar on from the moment they are introduced to your brand to the moment you make a high-level offer.
There needs to be a LOT of value and know/like/trust at each level in your funnel, which in my opinion needs to be a minimum of six levels. I call this The JLD Method.
We built Saul’s ENTIRE funnel, and now Saul has EXACTLY what he needs to pour IGNITER fluid on the top of his funnel, and watch revenue drip (and eventually pour) out the bottom.
Saul (like my other 1 day peeps) has become a friend, and I know our paths will cross many times and that I will take pride in the success that awaits him.
And thanks to Saul, I now drink Matcha Tea!
Saul’s 1-day in PR wasn’t the only deep-dive we did during the month of May…
Right before we launched The Mastery Journal on Kickstarter we had an idea: what if one of the pledge levels for the campaign included a 3-day mastermind here in Puerto Rico?
We’ve certainly gotten the request for an in-person mastermind or an event more than a few times from Fire Nation, so we figured this would be the perfect opportunity to give it a go.
Not knowing what to expect, we added a $6,500 pledge level to our campaign, which included a 3-day mastermind here in Puerto Rico, a signed Mastery Journal, and a spot on EOFire.
Five weeks later we had five attendees locked in and the planning was in full swing.
Even though we’d never hosted an intimate mastermind like this before we knew our experience with participating in masterminds and leading what we like to call a “hot seat” would play a huge role.
With a lot of logistical planning around travel and accommodations and a few strategy sessions between the two of us, we came up with a solid plan for the weekend.
We decided to host the mastermind at our home here in Palmas Del Mar; we knew this would add a personal and intimate touch that we’d never be able to create at a hotel or event center.
The first two days (Friday and Saturday) were the business-focused days.
Throughout these two days we crushed all five hot seats, which ran two hours each; we made sure all questions were answered with a shorter, wrap up hot seat; and we even had time to spare for some roundtable discussions.
All-in-all, the business-focused days were a perfect 10!
Then, the third day was reserved as our “Palooza Day”: a day to kick back and enjoy Puerto Rico, which we took full advantage of aboard a 40 person catamaran!
Island hopping, snorkeling and relaxing were all on the agenda, and we finished the day back at our home in Palmas with a BBQ pool party.
Image credit: Travis Chappell
While we don’t have Puerto Palooza II planned just yet, there’s a good chance it’ll be coming up soon, so stay tuned!
Product/Service Income: $131,158
TOTAL Journal sales: 963 Journals for a total of $37,750
The Freedom Journal: Accomplish your #1 goal in 100 days!
- TheFreedomJournal.com: $5,646 (103 Hardcovers & 32 Digital Packs sold!)
- Amazon: $14,070 (402 Freedom Journals sold!)
- Total: $19,716
The Mastery Journal: Master Productivity, Discipline and Focus in 100 days!
- TheMasteryJournal.com: $5,889 (111 Hardcovers & 36 Digital Packs sold!)
- Amazon: $12,145 (347 Mastery Journals sold!)
- Total: $18,034
Podcasters’ Paradise: The #1 Podcasting community in the world!
- Recurring: $20,327 (4 annual, 203 monthly)
- New members: $5,325 (26 new members)
- Total: $25,652
Podcast Sponsorship Income: $62,500
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!
Affiliate Income: $65,146
*Affiliate links below
Resources for Entrepreneurs: $56,039
- Audible: $660
- BlueHost: $900 (Step-by-step guide and 23 WordPress tutorials)
- Click Funnels: $49,863
- Coaching referrals: $2,560 (email me for an introduction to a mentor for overall online business or a Podcast focused mentor!)
- ConvertKit: $93
- Disclaimer Template: $50 (legal disclaimers for your website)
- Fizzle: $453
- Infusionsoft: $500
- LeadPages: $960
Courses for Entrepreneurs: $7,359
- DSG’s Create Awesome Online Courses: $4,233
- Eben Pagan: $158
- Ramit Sethi: $2,396
- Self-publishing School: $250
- Bryan Harris’ 10k Subscribers: $322
Resources for Podcasters: $914
- Pat Flynn’s Smart Podcast Player: $30
- Podcasting Press: $354
- Libsyn: $467 (Use promo code FIRE for the rest of this month & next free!)
- UDemy Podcasting Course: $63
Other Resources: $834
- Amazon Associates: $741
- Other: $93
Total Gross Income in May: $196,304
Business Expenses: $78,613
- Advertising: $7,727
- Affiliate Commissions (Paradise): $1,970
- Accounting: $350
- Cost of goods sold: $6,607
- Design & Branding: $1,980
- Education: $144
- Legal & Professional: $740
- Meals & Entertainment: $1,517
- Merchant / bank fees: $1,061
- Amazon fees: $12,676
- Shopify fees: $208
- Stripe fees: $5
- PayPal fees: $336
- Office expenses: $1,284
- Payroll Tax Expenses / Fees: $1,422
- Promotional / events: $1,323
- Property Tax: $807
- Paradise Refunds: $2,000
- Sponsorships: $13,750
- Show notes: $215
- Travel: $2,296
- The Freedom & Mastery Journal: $15,079
- Virtual Assistant Fees: $3,295
- Website Fees: $1,821
Recurring, Subscription-based Expenses: $2,572
- Adobe Creative Cloud: $100
- Boomerang: $70 (team package)
- Brandisty: $24
- Authorize.net: $91
- Cell Phone: $216
- Internet: $300
- eVoice: $9.95
- Infusionsoft CRM: $396
- Insurance: $551
- Libsyn: $203
- Manychat: $10
- Chatroll: $49
- PureChat: $20
- ScheduleOnce: $9
- Skype: $2.99
- Shopify: $147
- TaxJar: $19
- Workflowy: $4.99
- MeetEdgar: $49
- Taxes & Licenses: $300
Total Expenses in May: $81,185
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 May 2017: $115,119
Biggest Lesson Learned
Engaging with your audience
May was the start of Season 6 on my podcast Kate’s Take, and throughout this season I focused on a single topic: project management.
I learned a lot through creating the posts and episodes for this season, especially when it came to hearing straight from my listeners about the specific struggles they’re currently facing in their business.
Which got me thinking…
I wonder if others are leveraging tools like Google Forms and SpeakPipe to engage with their audience?
These are probably two of the simplest tools when it comes to collecting information, which is why I love them so much. Plus, this engagement one-on-one with your audience is GOLD when it comes to understanding their biggest pain points and coming up with new ideas for what you can create for them that will be of value (i.e. what they’ll actually pay for!)
So I thought I’d go through a specific example of exactly how I’ve used these tools to gain feedback from my listeners.
Step 1: Set up the page
Once I have my goal in mind (in this case, to collect input for my next season on the podcast directly from my listeners) I’m going to set up the page I’ll be directing listeners to.
For this, I simply login to our site and add a new page.
Once I give the page a title and write a line or two about the purpose of the page, I’m ready to move on to step 2.
Step 2: Create the Google Form & SpeakPipe box
Because I’ll be asking my listeners to visit the page I created and either fill out a Google Form or leave me a SpeakPipe message, my next step is to create those two things.
The Google Form will simply ask which topic they’d like to hear about most (with an option for ‘other’ so they can write anything in that space), plus some other general info about how long they’ve been listening, how they found out about the podcast, etc.
You can check out my Google Form for Season 7 here.
Step 3: Create the call to action
Now that I have my page set up and my form and message box ready for input, I need to figure out what I’m going to say to actually get people to the page.
My call to action is typically in the intro and outro of at least 3 – 4 episodes: 1 of those episodes being the final episode of the previous season, and then 2-3 of them in the episodes I publish in between seasons.
Step 4: Encourage engagement
Don’t think that just asking for input one time is enough; you have to really encourage engagement, especially if your call to action is reaching people via a podcast.
If you think about it, podcast listeners are typically doing some other type of activity when they’re listening to your podcast, so the chances of them remembering something you only say 1 time is very unlikely.
There you have it. Now that you know how simple it is to request engagement and feedback from your audience, it’s time to put it to action!
Bonus step: if you want to take your engagement to a whole new level, also add a scheduler link on the page where people can sign up for a one-on-one chat with you via Skype or Zoom. Any time you can spend with your ideal audience one-on-one will equal massive results, because when you listen to the questions, struggles and pain points revealed, each one is a potential product, service or resource you can offer your audience.
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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