April 2016 Income At-A-Glance
Gross Income for April: $222,919
Total Expenses for April: $81,994
Total Net Profit for April: $140,925
Difference b/t April & March: +$77,230
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
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 a while 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 April Tax Tip: 3 things you didn’t know about sales tax
I have a confession to make, Fire Nation: I love income taxes!
I don’t love paying them, and I certainly don’t love my clients paying them, but I DO love formulating a strategy to get tax liability as low as legally possible.
But there is a whole other part of taxes that even us crazy CPA’s hate: a tax that offers endless confusion and very few concrete answers: sales tax.
Because EOFire recently experienced this whole sales tax issues firsthand, we thought it’d be a great time to share a few things on this super confusing topic.
3 Things you didn’t know about sales tax
With that said, here are 3 things you didn’t know about sales tax.
1. You only have to pay sales tax on sales within the state you have “nexus”
Sounds simple, right?
Yeah – not exactly.
Basically the term “nexus” is a fancy way of saying “where you have a physical presence”. For most of us that test is easy: it’s simply where you and your business are located.
So for those of you located in California, with a presence only in California, you’ll collect and pay sales tax on applicable sales only to buyers located within California.
But where this becomes an issue is with ecommerce sellers, especially Amazon FBA sellers.
You see, when you allow Amazon to control your inventory, they will store that inventory in one, several, or potentially ALL of the 14 states they have storage units in.
What this means is they’ve just created nexus for you in as many as 14 different states.
Any state you store inventory in – or that Amazon stores inventory in for you – now becomes a state where you are required to collect and pay sales tax.
Never been to Pennsylvania in your life, but Amazon stores a few units of your inventory in their Pennsylvania warehouse? Guess what: you now have to collect and pay sales tax for all sales in the state of PA.
2. If you have nexus, you have to register your business in that state
If you did things right, then your business is already registered in the state you live and conduct business in.
But if you now have nexus in states you are not located in, you will almost certainly have to register your business in those states as well.
Basically, in order to pay the sales tax you are required to collect, you will likely have to register as a foreign business in each state you have nexus.
3. Tax Jar is your best friend
One of the biggest questions we’ve been getting lately is “how do I get this sales tax stuff taken care of?“
Unfortunately, due to the uncertainty involved, CPA On Fire (that’s me) and most other CPA’s I know, won’t touch this stuff.
So who should you turn to for help?
Far and away the best resource I have found when it comes to collecting and paying sales tax on digital or ecommerce products or services is Tax Jar.
Tax Jar takes some upfront work on your part, but once you have it set up you’ll be able to almost fully automate the entire process.
Conclusion: Sales tax is incredibly confusing, frustrating and annoying when it comes to running a physical product based business.
It’s also an area that can cause even the most successful business to go under if it isn’t handled correctly.
Now that you know these 3 things take some time to do some research if you think this might affect you and your business, and make sure you are doing everything that needs to be done when it comes to sales tax.
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 our FREE course on business entities yet, you can get it here!
What Went Down In April
No more TFJ on Amazon
Josh’s tax tips says it all.
After connecting our Amazon account for The Freedom Journal with TaxJar, we found out that Amazon had placed our inventory in all 14 states – without letting us know.
After doing some research on the whole nexus thing, we realized that not only is Amazon NOT required to tell you when / where they move your inventory, but also that you CANNOT request or demand that your inventory stay in only one place.
Weighing the pros and cons on our end, in addition to having our trusty CPA do a lot of homework, we made the call to pull The Freedom Journal from Amazon.
So what were the pro’s and con’s – how did we actually make this decision?
- Being able to leverage Amazon’s platform for increased visibility and sales
- Better shipping rates for certain countries
- Having to register EOFire, LLC in 13 additional states
- Performing ongoing maintenance and ‘checks’ on sales tax in those states
- Not really even being 110% positive we’re doing the “right thing” (because of the blurred line on nexus to begin with)
Then, we of course took a look at the numbers, and we found that our sales on Amazon vs. our sales on TheFreedomJournal.com didn’t even compare: Amazon was less than 20% of our overall sales, and that sealed the deal.
Funnel Hacking LIVE
Early in April we attended Russell Brunson’s event Funnel Hacking LIVE – an event for anyone who is interested in building better, smarter funnels.
While Russell and his guest speakers did mention Click Funnels quite a bit (that’s Russell’s software solution for helping people go live with proven funnels for sales, webinars, and everything in between), you certainly didn’t have to be a Click Funnels user to get a ton out of this event.
What the event did for me was massive: it helped me finally take action and do something I’ve been meaning to do for about a year now.
Immediately following the event I moved our Free Podcast Course and our Free Webinar Course over to Click Funnels.
Since, I’ve been working on transferring ALL of our email courses, opt in pages, webinar pages, landing pages, and thank you pages to Click Funnels, too.
We’ve been sort of “in between” with the switch to Click Funnels, and being at the event made me realize that I was getting way too comfortable with what was “working just fine for us” as opposed to recognizing what we could be doing better.
Another huge takeaway from the event?
Russell’s Formula for Success
Ready for it?
1. Find a hot market
Who are the people in this hot market?
Do your homework, study others who are already successful in that market, and figure out a way to do it better.
2. Ask them what they want
Start building an email list, then ask, “What do you want to know more about?”
Create a Table of Contents using the responses you get – what are the most common questions you get, and what topics come up most frequently?
3. Give it to them
Just do the work.
You just found your market, you asked your ideal customer what they want and they’ve told you, now create it and give it to them.
Not something brand new, right? In fact, you’ve probably heard this a million times.
I hope this time you’ll take action on it, because the most successful entrepreneurs don’t just say to follow these steps for the fun of it. They say to follow these steps because they work.
Season 2 launches on Kate’s Take: Creating Systems
After making the switch to seasons in January 2016, I realized how much better I felt about my podcast overall.
- Became more organized
- Provided a ton more value
- Felt lighter
I launched Kate’s Take in August 2014, and for over a year I published 2 episodes per week on Monday’s and Thursday’s.
There wasn’t a ton of organization; my main goal was to share the step-by-step and behind the scenes of how we run our business, including real-life examples and actionable steps listeners could follow.
I was also on a mission to overcome my own fear of being in the spotlight and to finally put my voice out there and share knowledge with an audience who I knew wanted and needed it.
Since the beginning, it’s been an incredible learning experience and major contributor to my personal and entrepreneurial growth.
But around the 1 year mark I started to see my download numbers drop, and right about that time, the podcast started feeling heavy.
I’ve never been one to obsess over my download numbers; I didn’t launch Kate’s Take to make money, rather to increase visibility on my content, and again, to push myself outside of my comfort zone.
Regardless, decreasing downloads is no bueno, especially given the podcast was taking up probably a half day of my time per week to produce.
After evaluating how I was spending my time day to day given my increased focus on the backend of our business towards the end of 2015, I knew something had to change.
So I moved to Seasons, which has given me about 6 weeks on and 6 weeks off each quarter – it’s been amazing.
Season 1 on Goal Setting launched at the beginning of January and the response was incredible. I’ve had more engagement in the 6 weeks the podcast was live than ever.
Season 2 on Creating Systems launched at the beginning of April thanks to the direct feedback from my listeners, and it’s been so nice to have focus and organization around the content I’m creating – for both myself and those who are tuning in.
Looking to create systems in your business that will help create freedom in your life? Check out Season 2 on Kate’s Take!
Social Media Marketing World
This is the 3rd year in a row I was asked to speak at SMMW, and it was my favorite year yet! With over 3,000 attendees, Michael Stelzner moved SMMW to the San Diego Convention Center and set it up like a champ!
My favorite part of SMMW is the 2 hour happy hour they hold for the speakers that precedes the opening night party on the USS Midway.
Mike brings in the best Entrepreneurs in the world to speak at his event, and the 2 hours of relaxed hangout time with these amazing people is something I treasure.
Snapchat was definitely all the rage, and a lucky few (Joel Comm) had custom geo filters for the event, which stole the show.
My presentation went very well, as I spoke on how to increase your audience, email, and engagement through Podcasting.
If you’d like to get a conference in this year, my recommendation is Agents of Change in Portland Maine on September 23rd.
Chris Brogan and myself are keynotes, and Kate is in the lineup as well! Promo code ‘Fire‘ will get you a killer discount, plus, Maine in September is AMAZING!
Young Entrepreneurs Convention
Brandon T. Adams was the crowdfunding expert for The Freedom Journal Kickstarter campaign and also hosted Young Entrepreneurs Convention in Des Moines, Iowa this month.
As the opening keynote, I took my first ever trip to Iowa and left with a very favorable impression of the people, area, and vibe.
The closing keynote was Kevin Harrington of Shark Tank, and it was great getting to hang out with him in person, as he was episode 265 on EOFire!
For a first-time event, Brandon crushed it, and I have no doubt he’ll build off this win and make the Young Entrepreneurs Convention an annual MUST ATTEND event for all midwestern Entrepreneurs.
Product/Service Income: $199,214
The Freedom Journal: $37,657. Accomplish your #1 goal in 100 days!
Podcasters’ Paradise: $22,050. The #1 Podcasting community in the world!
WebinarOnFire: $3,335 (invoice total) A rockin’ Webinar community!
Podcast Sponsorship Income: $133,000 (March + April)
Podcast Websites: $2,750 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.
The Fire Path Course: $136. A step by step business roadmap.
Affiliate Income: $23,705
*Affiliate links below
- BlueHost: $1,650 (Step-by-step guide and 23 WordPress tutorials)
- Click Funnels: $2,304
- David Siteman Garland’s Create Awesome Online Courses: $6,014
- Scott Voelker’s The Amazing Seller: $1,852
- Ramit Sethi’s Zero to Launch: $2,511
- Coaching referrals: $631 (email me for a mentor introduction)
- Fizzle: $675
- LeadPages: $2,305
- Rick Mulready’s FB ADvantage: $1,212
- Ray Edwards Copy Writing Academy: $0
- Bryan Harris’ 10k Subscribers: $304
- Grant Baldwin’s Booked & Paid to Speak: $62
- Libsyn: $256 (promo code Fire)
- Audible: $512
- Tim Paige Voice Over: $250 (ask for the Fire Special)
- Pat Flynn’s Smart Podcast Player: $121
- Infusionsoft: $128
- Aweber: $0
- Shopify: $39
- Amber Ludwig-Vilhauer: $17
- Fire Pole Marketing: $78
- WP Curve: $110
- UDemy Podcasting Course: $65
- Podcasting Press: $270
- Amazon Associates: $705
- Other: $1,634
Total Gross Income in April: $222,919
Business Expenses: $76,224
- Advertising: $6,504
- Affiliate Commissions (Paradise): $10,078
- Accounting: $250
- Cost of goods sold: $5,739
- Design & Branding: $1,980
- Training & Education: $137
- Meals & Entertainment: $1,430
- Merchant / bank fees: $2,323
- Amazon fees: $1,563
- Shopify fees: $491
- Stripe fees: $33
- PayPal fees: $852
- Office expenses: $333
- Other Business Expenses: $235
- Promotional / events: $920 (Choose Freedom t-shirts + PM16 swag)
- Paradise Refunds: $5,770
- WebinarOnFire Refunds: $1,319 (invoice total)
- Shipwire: $84 (1-0ff shipping & fulfillment of TFJ)
- Sponsorships: $33,625
- Show notes: $640
- Total Launch Package Fees: $0
- Travel: $1,068
- Virtual Assistant Fees: $4,934
- Website Fees: $1,668
Recurring, Subscription-based Expenses: $3,144
- Adobe Creative Cloud: $100
- Boomerang: $70
- Brandisty: $24
- Authorize.net: $91.10
- Cell Phone: $245
- Google Storage: $9.99
- Go2MyPC: $12
- HelloSign: $13
- Internet: $159
- eVoice: $9.95
- Infusionsoft CRM: $498
- Insurance: $551
- Libsyn: $309
- Chatroll: $150
- PureChat: $20
- ScheduleOnce: $9
- Skype: $2.99
- Shopify: $29
- TaxJar: $19
- Payroll fee: $77
- Workflowy: $4.99
- MeetEdgar: $49
- Wistia: $25
- Sweet Process: $29
- WPCurve: $29
- Taxes & Licenses: $77
- DocHub: $60 (annual)
- ScheduleOnce: $470 (annual)
Total Expenses in April: $81,994
Payroll to John and Kate: $18,193
In our May 2014 Income Report, Josh focused on how to pay yourself as an entrepreneur. Check it out!
Total Net Profit for April 2016: $140,925
Biggest Lesson Learned
Speed of implementation
It has always been one of John’s BIGGEST strengths and one of my BIGGEST weaknesses.
About five months ago John and I purchase the domain CitiesBySound.com. We also snagged the Twitter handle, the Instagram name, and we submitted a Trademark request to USPTO. So, it’s more like, Cities By Sound (TM) =)
It wasn’t the first time we had discussed creating a business around our passion for travel and history, and our strengths of writing, storytelling and producing quality audio.
But it was the first time we had actually done something about it.
Since, John and I have done a lot of research on what it would actually be like to travel the world and create something out of the ah-ha moment we had in Prague 2 years ago: audio walking tours of the world’s greatest cities.
The one thing we knew for sure is that whenever we did decide to start this adventure, our home base would not remain California. If we’re going on an adventure, we’re going all-in!
Five months later, we find ourselves in Puerto Rico, our new home base and launch pad for an adventure unlike any other we’ve ever been on.
For the first time, we’re location independent entrepreneurs, and we’ve finally given ourselves the space to explore new parts of the world, including the Caribbean, Europe and beyond.
The best time to plant a tree is twenty years ago. The second best time is now. ~ Chinese Proverb
Could I (or better yet – would I) have done this without John?
Two years ago we talked about traveling the world’s greatest cities and creating an adventure out of it that could help other people experience the true essence of a city and its history through audio walking tours.
Five months ago we finally took the first step to making that a reality, and here we are, in Puerto Rico, at the beginning of this adventure.
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 Infusionsoft to track our product income, 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:
Source: Entrepreneur on Fire