August 2023 Income Report

0:01Boom! Shake the room, Fire Nation. JLD here and welcome to Entrepreneurs on Fire. are brought to you by the HubSpot Podcast Network, the audio destination for business professionals with great shows like the Gold Digger Podcast. Today, Fire Nation is the income report for August of 2023. We have a lot of exciting things to talk about. We're talking about the R &D credit systems. We're also talking about deep fakes. This is cybersecurity stuff that you need to listen to, Fire Nation, and so much more. As soon as we get back from thanking our sponsors, Online Marketing Made Easy podcast, hosted by Amy Porterfield, is brought to you by the HubSpot Podcast Network, the audio destination for business professionals with a focus on online business, including digital courses, list building content, and more.

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1:23All right, Fire Nation, we are back. And let's kick it off with our gross income for August, which was$122 ,160. $260. Our total expenses were just over$12 ,000 for a net profit of$110 ,082. Our percentage of net profit to overall gross revenue was once again, 90%. Loving that number. And Fire Nation, we're going to kick things off with Ron Parisi's monthly tax tip, which is all about the R &D credits. Ron, take it away. Hello, John, and hello, Fire Nation. This is Ron Parisi with CPA on fire for your August 2023 tax and accounting tip. Hey, Fire Nation, hopefully everybody's doing well out there.

2:07This month, we're going to revisit a topic I covered earlier in the year, the R &D credit or the research and development credit. There's been some changes with the credit and the expenses that go along with the credit and how that's treated by the IRS that's catching some of my clients by surprise and some of the folks out there by surprise. So I thought we'd revisit the R &D credit, talk a little, give you a little high-level summary, talk of what changes have come about, and kind of also how expansive this credit is. And I think some folks out there are maybe missing an opportunity for, i.e.

2:49free money, i.e. in the form of a credit, tax credit. So let's start first, right? What is the R &D credit? So when you hear the word credit, you should equate that with cash, okay? So a credit is slightly different or is different than a deduction, right? A deduction reduces your taxable income and hence reduces your tax by a certain percent, your tax rate, where a credit, and in this case, it's a 20 % credit, is an immediate credit, i.e. cash, on your tax return. And even if you're not a profitable company, but you do have employees, you can take the credit against payroll taxes, which is a really great thing for those startup operations that don't have a lot of net income at this point.

3:39So what happens is that if you, there's a four-part test. I'm just going to read it off real quick. I don't want to make this too technical, but essentially the four-part test is, you know, you need to have an operation or function that eliminates uncertainty, one, includes a process of experimentation. It must be technological in nature, three, and then four, it must serve a qualified purpose, right? So that's what's called the four-part test. And I think a lot of people relate this to pharmaceutical companies, software development companies, but a lot can qualify for you entrepreneurs out there.

4:22Any new process inside of your company where you have dedicated expenses, particularly wages in here domestically, can qualify for this credit. And let me just pause there. I think the best way about understanding the credit and seeing if you qualify is there are companies out there that specifically deal with the R &D credit. At CPA on Fire, we technically do not do all of the sort of the background that needs to be done for the R &D credit. We outsource that. But it's very important that you work with your tax professional and your R &D expert because this sort of brings me to my point. And that's the big change that's happened here in 2022 as people are filing their tax returns.

5:16And that's all of the expenses that have gone into the R &D credit before 2022 were deductible. And what that means is the same year that you spent the money, you were able to deduct it on your tax return. What's changed in 22 is now that those expenses, the IRS, you know, say qualify, quote unquote, as an intangible and need to be amortized over five years. So just think amortization is technically different than depreciation, but you can think of it as the same way. It's just, you know, over five years, you need to take those expenses over the next five years. So what that means is if you spend$100 ,000 on your R &D costs, before 2022, you could take that whole$100 ,000 as an expense in 21.

6:15But now starting in 22, you need to amortize that$100 ,000 over the next five years. So instead of getting a$100 ,000 tax deduction, now you're only going to be able to get one fifth of the hundred and that's$20 ,000. So you're actually going to be paying more in taxes, you know, year one, year two, year three. But overall, you know, I believe the credit still makes sense. Obviously you need to kind of do that, you do your own calculations, but what it is is it's catching people by surprise because they feel that, hey, I spent this money in 2022, I should get a full deduction. And it's catching people by surprise because now that other 80 % is not deductible and now has become taxable income and they have a higher tax liability.

7:09So something just to keep in mind, I think in summary, right, you should be aware of this, you as the business owner. But the most important thing is as you are working with your R &D expert to also, you know, bring your tax professional into that conversation. And again, you know, we strive at CPA on fire, no surprises. So this way, you're not going to be surprised, you know, come tax time, you're going to know exactly what the implications are of taking the R &D credit on your current year tax return. So hopefully that gave you kind of a little insight, a heads up, and a plan going forward for you, the entrepreneur, as it relates to R &D credits.

7:54Again, this is Ron Parisi with CPA on Fire. Always a pleasure being with you guys. Until next time, go out there and crush it. Thank you. No, Ron, thank you. And Fire Nation, as always, check out cpaonfire.com for all of your tax and accounting needs, or just email Ron directly, ron at cpaonfire.com. Now we have something really cool that I'm excited to share with you. It's a special feature with Brian Masterson. He's going to be talking about cybersecurity and specifically how to protect yourself from deep fakes. Fire Nation, this is getting real and even more real every single day with the way the AI is just going from next level to next level.

8:37So Brian, take it away. Hello, Fire Nation. This is Brian Masterson from Cybervisor. I'm here with a special feature cybersecurity tip for you. At Cybervisor, we are a unique personal cybersecurity firm. We are people of the light and a dark space. We work with entrepreneurs to protect their wealth, their reputation, and their family by providing three things. Number one, cutting-edge enterprise grade home cybersecurity solutions to safeguard personal and financial assets. Number two, robust network security measures to protect all connected devices, including smart home technologies. And number three, we provide expert guidance on proactive cybersecurity measures and emerging threats in the tech industry.

9:30People trust us. Today, I want to share how you can protect yourself from deepfakes. Deepfakes refer to media that uses artificial intelligence to create those highly realistic and often deceptive content videos that we see that use images, videos, and audio. These sophisticated manipulations leverage deep learning algorithms that actually superimpose or replace one person's likeness with another. That results in fake videos or audio that can be convincingly difficult to distinguish from genuine content. We've all seen these videos on social media. With deepfake technology, it has positive implications and applications in various fields such as entertainment and digital arts.

10:21It's raised significant concerns for our clients in the four different areas that I'm going to share here. Number one, identity theft and privacy. Malicious actors can use deepfakes to impersonate individuals, leading to identity theft and privacy violations, especially in the financial industry. Number two, reputational damage. We see how deepfakes can harm individuals' reputations by portraying them in compromising or inappropriate situations, even though they were not involved. We see this with politicians and movie stars and actors. Number three, fraud. Audio deepfakes have been used as part of a social engineering scam, fooling people into thinking they are receiving instructions from a trusted individual, such as a family member, to transfer money.

11:11We see this with fake fraud scams, fake hostage situations. And then number four, we see cyberbullying with deepfakes. Now, there are several steps that you can take to minimize the risk and safeguard your personal information online. Number one, be cautious with your personal information. Hold it dear to your heart. Limit the amount of personal information that you share online, especially on social media platforms, especially when traveling or eating out. The more information available about you, the easier it is for someone to create a convincing deepfake about you or your family member or children.

11:51Number two, enable two-factor authentication, which is also known as 2FA. Enable 2FA on all accounts when possible because this adds an extra layer of security, making it more difficult for attackers to gain authorized access. In many cases, you'll receive a text where you'll have to verify that it is you, which is excellent. Number three, verify the sources and content. Be skeptical of any video or image that seems unusual or controversial. Don't believe everything you see, right? Check the source, cross-reference information, and look for inconsistencies to detect potential deep fakes. And number four, use reputable apps and services.

12:33When using apps or platforms, stick to reputable ones with good security measures in place. Go ahead and read reviews and privacy policies. See what people are saying about these different apps, where they were made, make sure they trust them, and if they're paid or free. So in conclusion, deepfakes are powerful, double-edged technology with both creative and malicious applications. Please keep a watchful eye and ear open when online, especially when watching videos on social media. Be smart. You can make a difference. Again, this is Brian Masterson from Cybevisor. If you're interested in taking a quiz on your personal cybersecurity hygiene, please visit our website at cybevisor.com.

13:17C-Y-B-V-I-S-O-R dot com. Thank you very much. Brian, thank you. Hopefully, Fire Nation, you took away some great content from that that could very well save you from massive headaches and potential financial disasters down the line. Now we're going to be talking about what went down in August. Our interview of the month is from my good friend, John Morrow. It's all about how AI can create content better than 99 % of humans. We chose this one because it's pretty fitting based on what we just talked about because you can utilize AI for incredibly positive reasons and also AI can be used in really bad ways.

13:59So it's best to be aware, knowledge is power. And the three value bonds from this interview was becoming an entrepreneur is like a bamboo shoot growing from the ground. Use intensely vivid language and create an atmosphere of excitement. Use rhetorical language, informal language, make it conversational and style to create an intense sense of engagement with the reader. And what AI is going to replace, Fire Nation, is the processor. AI will not replace the painter, but the paintbrush. Think about that. So once again, how AI can create content better than 99 % of humans with John Morrow. And he has a great AI writer, how to use chat GPT to write 100 times faster.

14:40This book is awesome. It's just$1 and we have it linked up in the show notes, eofire.com slash income 120. And Fire Nation, we have some really exciting things to chat about as soon as we get back from thanking our sponsors. Expectations are at an all-time high these days for sales leaders and sales teams beyond your daily cold calls, the relationship building, and actually closing deals. You're also expected to leverage a slew of different tech to-dos. If you're not digging into the numbers, monitoring the best strategies, and switching it up when things aren't working and collaborating across other teams within your company, then you're not on your A game.

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17:04Thought Leader is a speaker coaching company that has helped over 550 and counting coaches, speakers, entrepreneurs, authors, and experts land TEDxTalks. Thought Leader is not affiliated with TED or TEDx, but they're able to get these results because their founder, Taylor Conroy, is a four-time TEDx speaker himself and past EO Fire guest. You might be thinking a TEDxTalk sounds great, but where do you start? Taylor has put together a free training that's going to teach you how to land a TEDxTalk in as little as 90 days. Join Taylor to learn exactly what TEDx organizers are looking for in their speakers, how to write a talk that goes viral once it goes online, and more.

17:40Visit thought-leader.com slash fire to join Taylor for this free training and get your message out of your head, out of your heart, and out into the world where it belongs. That's thought-leader.com slash fire. Fire Nation, we are back. And finally, we get to pass it over to the one, the only, Caitlin Dumas to talk about systems and SOPs. So Kate, say what's up to Fire Nation and take it away. All right, Fire Nation. I'm on the mic with you with Gus right by my side, panting on my arm. And I'm very excited to talk about one of my favorite topics, systems and SOPs. Those are standard operating procedures for those of you who are wondering what the heck that means.

18:25And these are critical components of your business. We have been creating systems in our business since day one, thanks to John's organizational genius. And when I came on board, it was definitely high priority to make sure that systems processes, standard operating procedures were something that not just John and I were creating, but that our team was creating and following as well. because the thing with systems is they're an ever-evolving and ever-changing project. So yes, they require a lot of time and attention to set up, but more importantly, they will work for you on an ongoing basis. They will save you time.

19:06They will help you scale. They will help you grow. They will help you avoid so many frustrations. And who doesn't want that in their business? So why are we talking about systems and standard operating procedures today? nearly 11 years later if there's something that we set up on day one? This is a great question. But the reason that I'm bringing it up in this month's income report is because, again, like I mentioned before, systems and SOPs are ever-evolving and ever-changing. They're something that you have to check up on because systems in your business might require changes because you have a new team member and they're going to take on parts or the whole of a system.

19:47Maybe you've found more ways to automate or delegate parts or the whole of a system. Or maybe you've found efficiencies in the way that you do certain tasks and therefore you need to document a new way of doing something so that you and your team are on the same page. Now, we also take on new projects and tasks in our business all the time that require us to create new systems from scratch. So I just feel like this is such an important component in your business, again, for the success, for the scale, scalability, for growth. So during the month of August, we decided to take on a pretty hefty project.

20:24We did an audit of all of our existing systems and SOPs. And this includes determining any project or task we work on in our business that might require a new system to be created. Now, if you want to check it out, I did a bullet point list of some of the system updates that we made this month. You can check that out on the income report, eofire.com forward slash income 120. So this project is well underway. We're making some great progress. We'll definitely keep you posted though because we are far from finished. So if you have not created systems or SOPs in your business, if you haven't checked up on them in a while, this is a little friendly reminder to do so.

21:08Fire Nation, you heard it from the source, Mrs. S.O.P. herself. Definitely make this happen. Now, we do have a little sad news to update you with. Earlier this month, if you were listening to some episodes, I interviewed Davin Michaels about a really fun and a really cool and a really exciting opportunity for us, me and you, Fire Nation, to get to hang out on a cruise ship. It was going to be in April. It was going to be an epic cruise around the Caribbean, which is, of course, is my backyard. And it was with Virgin Cruises. And it was with one of their brand new ships, not just one of their brand new ships, it was actually with a brand new ship that had yet to be completed, but was slated to be fine for the time April came around.

21:56Well, after the interview went live, we unfortunately got news from Virgin that that cruise ship will not be complete for logistical reasons and other reasons they gave. It doesn't really matter, but it's not going to be ready for April. So they booked everybody on an earlier cruise in March on a different ship. And I unfortunately cannot make the updated timeline. So we just wanted to share that I am not going to be able to make the San Juan social cruise. So if anybody signed up for that, you were obviously alerted that the April cruise is off and the March cruise is on in a different ship. But I am not going to be able to make that.

22:32So I just want to make it clear that unfortunately, I will not be joining you on this really cool cruise if you made the decision to go. If you're so cool with that, please go. It's going to be awesome. There's going to be a lot of amazing people. I know over 200 people have already signed up and you can learn more about it at sanjuansocialcruise.com.

22:54sanjuansocialcruise.com. It's going to be a great cruise. Devin's putting together a ton of really cool people. The network is going to be a lot of fun. I know the islands that he's going to are great because I've been to them on prior cruises and I've heard nothing but great things about Virgin Cruises. So have a blast if you're going. Sad that I won't be joining you. Hopefully in following years, we'll be able to make it happen. Now we're going to move on to August of 2023's income breakdown. Our product service income for August of 2023 was$118 ,381 total. We did just under$2 ,000 in journal sales for a total of 54 sold.

23:34We did 30 freedoms, 10 masteries, and nine podcast journals. And that's just in the digital pack because we have officially sold out of all of our inventory of the physical copies and digital packs are all that are available now. Podcasters Paradise brought in just under$9 ,000. Our podcast sponsorships was$107 ,000. Our affiliate income was$3 ,779. And our total business expenses were$9 ,137. That was just for our recurring and our, or that was just for our standard business expenses. And for our recurring subscription-based expenses, it was$2 ,941 for a total expense of just over$12 ,000 for a net profit of$110 ,082.

24:25So another great six-figure month, our 120th in a row. Kate, take it away from the biggest lesson learned. This month, my biggest lesson learned comes from a recent episode of my podcast that I do with my girlfriend, Nicole, called Nicole and Kate Can Relate. And in this episode, we chatted about the topic of different working setups. We discussed the in-person setup, the at-home setup, and the hybrid setup, which has become increasingly more popular. So this topic came up because Nicole and her husband and business partner, Omar, decided to start working in person out of a co-working space. And they had made this switch after working from home since they started their business.

25:13So like over 10 years, they've been working from home. and now they've made the switch to going into an office pretty much five days a week, this co-working space. And I found this move so fascinating because I absolutely love working from home and I can't really ever imagine changing that. John, do you feel like you could go to an in-office setup right now or no? Man, just being back in Boston, it brought me back to when I was working in corporate finance with John Hancock right in the Seaboard District of Boston, which was right around the corner from where we were staying at the Omni Hotel.

25:49And it just brought me back to waking up every morning, shaving, obviously getting ready to go to work, putting on literally a suit and tie every single day to go. And I mean, listen, there were some things that were cool about that, the camaraderie of being in an office where there's high energy and things are happening. You're meeting people, you're doing things, you're in views and you're doing this and that. We had a great gym. So I was taking my lunchtime to go to the gym. So there's some cool things about it. And I definitely liked it. But I mean, to answer your question directly, it's really hard to picture at this stage, especially with a baby on the way to be going into an office every single day.

26:32Yeah, pretty crazy. But I know that everybody has different feelings on this and different reasons for why they love either the in-person at home or hybrid setup. So I had to hear all the details from Nicole. Was this the right move for them? Did they love going into an office? Like I wanted the full breakdown. So she did break it all down in a recent episode on that podcast. Nicole and Kate can relate. The title of that episode is, is a hybrid work model, the sweet spot. And I have this linked up in the income report, if you want to check that out. But a little spoiler alert, they are loving it.

27:08During our conversation, I got to thinking about the different ways that we work and hearing Nicole out plus reading a few articles on the topic here and there, I really did gain a new perspective, did not change my mind about how much I love working from home. But when we initially went into the conversation, I was so fully committed to thinking that working from home was the best way to do it hands down. But Nicole brought up a lot of great points about working with others in person. John, like you said, that camaraderie, like her experiencing a shift in energy and enthusiasm being around other people, the positives about meeting new people, how it can bring inspiration and allow the opportunity to give back.

27:50Like Nicole has signed up for this mentorship program through the coworking space. So she actually gets to talk with other startups and business owners and kind of help them on their journey. And that's a way for her to pay it forward, which I think is really awesome. And I could see how that would feel really great. So our conversation made me realize that at the end of the day, maybe there isn't really only one right way. Maybe it's dependent on your business situation, on your personal situation. Of course, your personal likes and dislikes and what it is that you're looking for on a day-to-day basis.