September 2024 Income At-A-Glance
Gross Income for August: $110,362
Total Expenses for August: $11,677
Total Net Profit for August: $98,685
Difference b/t August & July: -$35,373
% of net profit to overall gross revenue: 89%
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.
Check out all of our monthly income reports – from the very beginning!
Let’s IGNITE!
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Ron Parisi’s Monthly Tax Tip
Hello, Fire Nation! Ron Parisi from CPA On Fire here with our September 2024 Tax and Accounting tip brought to you by CPA on Fire. This month, we’re talking about the difference between good and bad debt — a key for long- term success.
At CPA on Fire, we work with many 7-8 figure entrepreneurs who face this very challenge, so let me break it down in a way that’s relevant to your business.
Our firm has 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!
Ron’s September Tax Tip: The Difference Between Good and Bad Debt
What is Good Debt?
Good debt is strategic. It’s an investment that helps expand your business in a measurable and predictable way. Think of it as fuel for your company’s growth. Whether you’re scaling your digital processes, expanding your sales team, or making targeted investments in marketing campaigns, good debt should always have a clear plan attached to it.
For example, when you take out a loan or use credit to finance a marketing campaign, you should know the expected return on that investment. What’s your product price? What percentage of your profits will go toward repaying the debt? If you can answer these questions confidently and you have a plan, you’re on the right track.
Recognizing Bad Debt
Bad debt, on the other hand, is risky and often unplanned. It’s when you throw money into a project without understanding the financial implications. For instance, if a marketing agency tells you to invest $30,000 on a campaign and you put it on a credit card without any clear strategy, that’s bad debt. You’re essentially gambling, hoping for a return instead of calculating one.
Bad debt is often the result of impulse decisions, and it can put unnecessary strain on your cash flow.
The Importance of Strategic Planning
One of the biggest takeaways from my years of experience is that financial planning is crucial when taking on debt. Always ask yourself:
- Will this investment lead to future growth?
- Do I have a plan to manage and repay the debt?
- What is the expected return on this investment?
By answering these questions, you can ensure that your debt works for you, not against you.
We focus on forward-looking strategies that help our clients make smart financial decisions, always with an eye on the future.
Lastly, debt can be a powerful tool if used correctly. Whether you’re leveraging it to expand your business or increase profitability, the key is in how you plan and execute. Seek the right team of professionals to help business owners like you navigate these decisions every day, making sure that your financial operations are optimized for growth and can help turn your debt into a stepping stone for success..
CPA on Fire offers vCFO and fractional financial operation services. We have vast experience working with high-growth entrepreneurs. If you recognize the need to level up your financial operations to improve growth, profitability and free your time, let’s connect! We can show you how we help our amazing clients and what we can do for you and your business. Learn more at CPAOnFire.com.
David Lizerbram’s September Legal Tip
All About Term Sheets – For Buyers and Sellers of Businesses
What’s up Fire Nation! David Lizerbram here and I’m excited to be back with another legal tip for you! I’ve been practicing law for 22 years and have loads of free content over at LizerbramLaw.com. This month’s legal tip is all about term sheets.
Whether you’re an entrepreneur looking to sell your company or an investor aiming to acquire a business, understanding term sheets is essential. A term sheet is a non-binding document that outlines the key terms and conditions of a proposed business deal. It serves as a blueprint for the more detailed, legally binding agreements that will follow.
Note: Although term sheets are typically referred to as non-binding (I even did so in the paragraph above), some clauses in the term sheet may create legal obligations, so be sure you understand where those obligations may arise.
Term sheets are crucial in setting expectations and aligning both parties on the fundamental aspects of the transaction before investing significant time and resources into due diligence and negotiations. They help identify potential deal-breakers early on and provide a framework for further discussions.
Key elements typically found in a term sheet include:
- Valuation and Purchase Price: This section outlines the agreed-upon value of the business and how the purchase price will be determined. It may include details on whether the price is fixed or subject to adjustments based on financial performance or due diligence findings.
- Deal Structure: Will it be an asset sale (where specific assets of the business are transferred) or a stock sale (where ownership of the entire company changes hands)? Each structure has different implications and levels of complexity. This also may affect whether the buyer is assuming the company’s liabilities, or if they are remaining with the seller.
- Payment Terms: This details how and when the purchase price will be paid. It could involve upfront cash, deferred payments, earn-outs (additional future payments based on the business’s performance), or a combination of these.
- Financing: If the buyer is seeking financing, the term sheet may outline the expected sources of funds and any contingencies related to securing that financing.
- Due Diligence: This section typically specifies the scope and duration of the due diligence process, during which the buyer will investigate various aspects of the business.
- Exclusivity: Often, buyers will request an exclusivity period (also known as a “no-shop” clause) during which the seller agrees not to entertain other offers. The duration of this period should be carefully considered by both parties.
- Conditions to Closing: These are the requirements that must be met before the deal can be finalized. They might include obtaining necessary approvals, key employee retention, or reaching certain financial targets.
- Representations and Warranties: While the specifics are usually left for the final agreement, the term sheet may outline key representations and warranties expected from each party.
- Indemnification: This section provides a high-level overview of how potential future claims or liabilities will be handled post-transaction.
- Confidentiality: Terms regarding the non-disclosure of sensitive information exchanged during the process are typically included.
- Employee Matters: This might cover retention of key employees, treatment of stock options, or any planned changes to the organizational structure.
- Governing Law: Specifies which state’s laws will govern the interpretation of the agreement.
For sellers, it’s crucial to strike a balance between providing enough detail to move the process forward and maintaining flexibility for negotiations. Be cautious about granting long exclusivity periods or agreeing to onerous terms that might hinder your ability to explore other options.
For buyers, the term sheet is an opportunity to clearly articulate your vision for the deal and set the stage for a smooth transaction.
However, be prepared for pushback on terms that might be perceived as too buyer-friendly.
Remember, while a term sheet is mostly non-binding (except for certain clauses like confidentiality and exclusivity), it sets the tone for the entire transaction. Approach it with care and consider seeking professional advice to ensure your interests are protected.
Whether you’re buying or selling, a well-crafted term sheet can save time, reduce misunderstandings, and pave the way for a successful transaction. If you have questions about term sheets or need assistance in negotiating one, please feel free to contact me. I’m always happy to talk with members of Fire Nation.
If you have questions, please contact me. I’m always happy to talk with members of Fire Nation!
What Went Down In September
Interview of the Month
How to Scale Your Online or Offline Business with Clay Clark
3 Value Bombs
- “Without vision people perish”.
- Growing a business is like building a symphony, and when you build all these things together, you can create a beautiful sound, a beautiful success.
- “You Must Measure What You Treasure, and You Will Slack Where You Do Not Track”.
Give A Derm – A luxurious, all natural and toxin-free skincare that actually works!
ThriveTime Show – Attend the world’s highest rated and most reviewed business growth workshop taught personally by Clay Clark & football great Tim Tebow.
Our Month in San Diego!
Last we left off we were wrapping up our time in Maine and headed to San Diego!
We dove straight into life on the West coast frequenting parks, doing twice-daily walks around the bay, visiting The New Children’s Museum, hitting up the pumpkin patch, and crushing the San Diego Zoo and SeaWorld!… Just to name a few things.
Spoiler alert: Bo LOVED it (and so did we!!)
Our Airbnb was right on Sail Bay, just around the bend from where we used to live, and being right on the boardwalk and steps from the sand was a real treat.
In addition to the many fun activities listed above, we also maximized time with our friends and family by hosting multiple “bay days”, dinners, and sleepovers!
Bo was such a champ when it came to traveling across multiple time zones and changing spaces.
And we can’t forget Bo’s first camping trip to Joshua Tree! Despite the 100+ degree temperatures, we had an absolute blast.
And speaking of firsts… We also left Bo with my sister for 3 days while we traveled to Boston for HubSpot’s INBOUND conference!
INBOUND 2024 by HubSpot in Boston
This was our third year in a row attending INBOUND by HubSpot (John has spoken all three years, too!), and this event does not disappoint.
From the opening keynote sharing one of HubSpot’s newest offerings: Breeze AI, to the HubSpot Media Network live recording studio, to the fun-filled mixers and dinners we shared with our fellow HubSpot Creators, INBOUND was a 10 out of 10.
This year John rocked the stage with Alex Lieberman, Founder of Morning Brew, a daily newsletter that delivers quick and insightful updates about the business world every day of the week from Wall St. to Silicon Valley.
They each shared insights about how AI is impacting creators today, why newsletters are still incredibly powerful as a form of engagement and connection with your audience, and the top takeaway: the higher the barrier, the lower the competition.
You can tune in to John and Alex’s full chat right here on Entrepreneurs On Fire!
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September 2024 Income Breakdown*
Product/Service Income: $108,002
TOTAL Journal Sales: $1,669 | Total Journals Sold: 41
The Freedom Journal: Accomplish your #1 goal in 100 days!
- Total: $662 (17 Freedom Journals + 0 Digital Packs sold)
The Mastery Journal: Master Productivity, Discipline and Focus in 100 days!
- Total: $887 (20 Mastery Journals + 1 Digital Packs sold)
The Podcast Journal: Idea to Launch in 50 Days!
- Total: $120 (3 Digital Packs sold)
Podcasters’ Paradise: The #1 Podcasting community in the world!
- Total: $4,124
Real Revenue: Turn your BIG IDEA into Real Revenue
- Total: $75
Podcast Sponsorships: $102,117
Podcast Launch: Audiobook: $12 | eBook: $5
Free Courses that contribute to 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: $2,360
*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: $1,969
- Audible: $10
- Click Funnels: $1,959
- Coaching referrals: $0 (email me for an introduction to a mentor for overall online business or a Podcast focused mentor!)
Resources for Podcasters: $286
- Libsyn: $267 (Use promo code FIRE for the rest of this month & next free!)
- Repurpose House: $6
- UDemy Podcasting Course: $13
Other Resources: $105
- Amazon Associates: $6
- Other: $99
Total Gross Income in September: $110,362
Business Expenses: $8,769
- Advertising: $0
- Affiliate Commissions (Paradise): $0
- Cost of goods sold (Journals): $215
- Fulfillment: $0
- Consulting: $71
- Design & Branding: $0
- Dues & Subscriptions: $65
- Legal & Professional: $0
- Meals & Entertainment: $404
- Merchant / bank fees: $1,256
- Amazon fees: $704
- PayPal fees: $14
- Office expenses: $135
- Community Refunds: $697
- Promotional: $0
- Travel: $1,825
- Virtual Assistant Fees: $3,383
- Website Fees: $0
Recurring, Subscription-based Expenses: $2,908
- Adobe Creative Cloud: $36
- Accounting: $515
- Boomerang: $90 (team package)
- Authorize.net: $25
- Google: $90
- Cell Phone: $162
- CookieYes: $10
- Internet: $68
- Analytics: $70
- eVoice: $15
- Keap CRM: $256
- Insurance: $669
- Libsyn: $209
- Linktree: $9
- Spotify: $19
- OpenAI: $20
- Taxes & Licenses: $505
- Patreon: $45
- Zoom: $15
- Xero: $80
Total Expenses in September: $11,677
Payroll to John & Kate: $15,900
In our May 2014 Income Report and our June 2016 Income Report, Josh focuses on how to pay yourself as an entrepreneur. Check them out!
Wondering what we do with all of our net revenue? We share all in our April 2017 Income Report :)
Total Net Profit for September 2024: $98,685
Biggest Lesson Learned
The Skill of Being Able to “Turn Off”
As entrepreneurs it’s easy to always feel like we’re “on”. Constant ideas, new software and platforms to try out, more people to meet, conferences to attend… But as we all know, this can also be exhausting.
I’ve never done well under a lot of stress, and so over the past twelve plus years I’ve been very intentional about practicing the skill of turning off.
This is not only important on a day to day basis so you can focus on other things like yourself, your family, and your household, but it’s also important when it comes to having energy to create new things in your business. Having the time and space to feel motivated and inspired is required, too.
One of the best ways I know how to do this is setting a sort of curfew for myself. John and I have done this since the very beginning: around 5pm we start to shut things down, and our evening time is dedicated to spending time with each other, with Bo, with our dog Gus, with our friends, and when we’re near them, our families.
Over the years we’ve been lucky enough to be able to extend this time. We have entire days when we can choose to turn off – and sometimes even weeks.
So if you feel like turning things off is a challenge for you, then setting a curfew is a great place to start. Try to hold yourself accountable to turning off at a certain time each day. There’s always room for exceptions (a launch, while you’re attending an event, etc), but let it be that: the exception.
Being able to turn off is an incredibly valuable skill that will save you a lot of stress and frustration. So start practicing today!
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.
