Income Report for May 2023: We're expecting!, Our 23-day River Cruise, and more!

0:01Boom! Shake the room, Fire Nation. JLD here and welcome to Entrepreneurs on Fire. Brought to you by the HubSpot. Podcast Network, the audio destination for business professionals with great shows like Finding Founders. In today, Fire Nation, we are talking about the Entrepreneurs on Fire Income Report for May 2023. We have a lot of great things to talk about coming from our lawyer, our CPA, and of course, myself and Kate have some value bombs to drop as soon as we get back from thanking our sponsors. One of my favorite conferences to attend each year is HubSpot's annual Inbound Conference and is coming up fast.

0:44Join us in Boston from September 5th to the 8th, 2023 for an event like no other. Inbound brings together leaders across the business space, including sales, marketing, customer success, and operations teams. The goal at Inbound to help you discover all the latest trends and tactics you can implement in your business right now. Learn, be inspired, and walk away with practical tips to help you tackle your next challenge, supercharge your sales and marketing, and ignite your customer service. Inbound is featuring many must-see speakers this year, including Reese Witherspoon, Guy Raz, and Neil Patel, just to name a few.

1:22Whether you choose a general admission ticket or go the VIP route, you're sure to leave Boston feeling on fire. Visit inbound.com to get your tickets today. If you've been sizing NetSuite up to make the switch, then take advantage of their special financing offer today. Defer payments of a full NetSuite implementation for six months, no interest, no payments. Visit netsuite.com slash fire to get the visibility and control you need to weather any storm. That's netsuite.com slash fire. All right, Fire Nation, let's get rolling with our income at a glance. Our gross income for May was$173 ,293. Our expenses were$19 ,065 for a net profit of$154 ,228, an$11 ,000 drop from April.

2:16But I will say our net profit overall gross revenue was 89%, so close to that goal of 90 plus percent. But we did come up a little short there. And we're going to kick it off with Ron, Mr. CPA on Fire himself, as he talks about the home office tax deduction for business owners. Take it away, Ron. Hello, John, and hello, Fire Nation. This is Ron Parisi with CPA on Fire for your May 2023 tax and accounting tip. Over the next few months, I'm going to be covering a lot of tax tips, tax topics. As I talk to more and more prospects, I just feel that too many business owners are paying too much in taxes and they're just simply not aware of all the opportunities there are to save on taxes.

3:08So today we're going to be tackling a major deduction, something that's come front and center post-COVID, and that's the home office deduction. I'm going to break this down first. If you're a W-2 employee, before 2017, you were able to take home office deductions, but that was all eliminated. it. However, if you have a side hustle going on or you have a Schedule C, you're prime to take the home office deduction. If you are an owner of an S-Corp or in a partnership, you may be able to take the home office deduction under what's called an accountable plan. I think I'm going to cover that separately on another tax and accounting tip from CPA on fire in a couple months.

4:01But right now, let's just dive in. I think there's a lot of misconception on the home office deduction. So I'm just going to, you know, bear with me. I'm just going to use some buzzwords, but I'm going to try to break it down for everybody, for you, Fire Nation. First of all, to be eligible for the deduction, the IRS states that the home office must be exclusively used for trade and business, and it must be used regularly, not just occasional or incidentally. So let's break that down, right? So exclusively means that the area can only be used for your trade or business. It doesn't necessarily need to be separated by any kind of wall or permanent partition, but it does need to be exclusively used for business.

4:50That means that if you do your bookkeeping or your invoicing on your kitchen table, probably not going to qualify. However, if you have a desk set up in a multi-purpose room and that desk and the filing cabinet, et cetera, take up half of that space, you'd still be able to use that square footage as counting towards your home office. Let's cover regularly. Regularly is a tough one, but basically they define it as you use the space more than occasionally or incidentally. So whether it's every day, Monday, Wednesday, Friday, if you occupy that space and use it for work, again, that would qualify for the home deduction.

5:44but again getting back to the area right so one of two things need to happen one it needs to be your principal place of business or you need to either meet clients patients or customers in a normal course so what that means is that you know if you're a traveling salesperson or you travel for work and you come home and use your home as your primary place of business, then you can take that deduction. Or if you have maybe an office, but you also meet clients or customers at your business, then again, you qualify for the home office deduction.

6:37the principal place of business, again, the amount of time spent and the relative importance of the activities you perform at each location, again, whether it's exclusively or regularly used for the business administration management activities. And an important point to note is a separate structure that's not attached to the home could qualify as a home office deduction if it's used in connection with the business. I know like in Los Angeles, we have some folks that converted their garage into their office. We have different people have different structures on their building. E-commerce maybe has their inventory located on a garage or a barn in their business or on their property.

7:25So all of those things would qualify as a home office deduction. direction. So let's talk about, okay, what qualifies? Okay, you have a space that you exclusively use for your principal place of business. Okay, now, hey, Ron, what can I write off? So let's start off, right? If you rent, you can write off a portion of your rent. If you own, now you have mortgage interest, you have property taxes, homeowners insurance, You can allocate a piece of your utilities, your repairs and maintenance. If you live up north and you get some snow, snow removal, a certain amount of lawn care. So this all can be allocated based on square footage, what you can write off.

8:20So say you own a 1 ,500 square foot house and 150 square feet qualify for where your principal place of business is. That means that 10 % of all your expenses relating to the house could be written off as a home office deduction. Hopefully, Fire Nation, I've covered this in enough detail for you guys to get a flavor of what would qualify. whether you do qualify, and how important it is to, one, to bring it to your tax professional, and two, to ensure that you keep good records. I always believe in writing everything down, having a contemporaneous record, and being able to back it up. So that means going to the county auditor, getting a list of your square footage of your house, mapping your own space out, maybe taking pictures and being able to document the square footage of your house.

9:25But hopefully you guys out there, as we manage our way through some difficult tax topics, you guys have a good understanding of what's available to you. And please go out there until next time and crush it. Thank you very much. Ron Parisi with CPA on Fire. Way to rock the mic and draw some value bombs, Ron and Fire Nation, as always. check out cpaonfire.com to get in touch with the amazing CPA on Fire team. They will help you succeed. Now, without any further ado, we're going to bring on David Lizerbram for May's Legal Tip, and we're talking about how to avoid a descriptive or generic trademark.

10:08Take it away, David. 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 21 years and have loads of free content over at a website, LizzerBramLaw.com. And this month's legal tip is all about how to avoid a generic or descriptive trademark. So the best way to establish a strong trademark for your business, your brand, your product, your service, whatever it may be, is to create a brand name that is neither generic nor quote, merely descriptive. In this legal tip, I'll explain what those terms mean and provide some tips on how to avoid running into these issues.

10:53Before diving into the details of avoiding descriptive or generic trademarks, let's first explore the benefits of having a strong trademark at all. A robust trademark can serve as a powerful tool for businesses to stand out in the competitive marketplace and protect their brand identity. Some advantages of a strong trademark are enhanced brand recognition, greater legal protection for your brand, and higher valuation for your company should you want to sell the business or get a loan or bring in a partner, anything like that. All right, now that we've explored the benefits of having a strong trademark, why you should even care, let's delve into the specifics of how to avoid descriptive or generic trademarks to ensure your brand name is both distinctive and legally protectable.

11:38All right, so imagine you're starting a business and you've just come up with the perfect name for your product or service. You've invested time and money into developing your brand name, and now you want to protect it with a trademark. But what if your brand name is deemed, quote, merely descriptive or generic by the U.S. Patent and Trademark Office? Well, that outcome might prevent you from being able to legally register your trademark and to enjoy the protection that comes along with registration, which means that your competitors may be able to use the same name or a similar brand name, and you might not be able to stop them from doing that.

12:10A trademark is anything that identifies your products or services and distinguishes them from those of others. So a strong trademark can be a valuable asset as it helps customers recognize and trust your brand, but not all trademarks are created equal. Some are weak and vulnerable to challenges, especially those that are merely descriptive or generic. The Trademark Office is responsible for determining the eligibility of trademarks, and they have specific criteria to determine if a trademark is too descriptive or generic. Let's talk about the slippery slope of, quote, merely descriptive. So a merely descriptive trademark is one that just describes a characteristic, a feature, a quality, a function of the goods or services that it represents.

12:53It's not distinctive enough to be granted full trademark protection. For example, a company selling apples under the brand name Crunchy Apples would be considered merely descriptive. That type of trademark fails to distinguish the company's products from others in the market because, ideally, all the apples that are being sold at that store are crunchy and not soft and not delicious. One real-life example of a merely descriptive trademark refusal involves the case of Inre Trivita Inc., where a company tried to register the mark Nopalea, N-O-P-A-L-E-A, as a trademark for dietary supplements for Nopal juice.

13:31The USPTO found the mark to be merely descriptive as Nopal is a type of cactus, and Nopalea is a genus of cacti, from which Nopal juice, the product at issue, is derived. so the court held that no palea simply described the primary ingredient of the product and the application was refused all right now let's talk about the generic trademark dilemma generic and descriptive is not the same thing for trademark purposes a quote-unquote generic trademark refers to a term that the relevant purchasing public understands primarily as the common name for goods or services rather than as a brand identified or at all really one shouldn't refer to a generic term as a trademark at all.

14:09It doesn't really function that way. An example would be someone using the term bicycle shop for a store selling bikes. Generic terms can never acquire trademark protection as they don't distinguish one company's products or services from those of the others. Someone can open a bike shop across the street and also call their store bicycle shop and neither competitor can do anything about the other's name. So it's really not a trademark at all. A classic example of a term that was determined to be generic and therefore not entitled to trademark protection is the case of Kellogg Company versus National Biscuit Company in which the term shredded wheat was determined to be generic.

14:44The court decided that the term was merely the way to identify the product itself, which is a cereal made from shredded wheat. It wasn't a brand identifier, so both Nabisco and Kellogg were able to sell their products using the term shredded wheat. It didn't function as a trademark at all. So to avoid having your U.S. Patent and Trademark Office trademark application refused or challenged, you should strive to create a distinctive and unique brand name. So this can be done using suggestive, arbitrary, fanciful terms. Suggestive trademarks, those are the ones that hit at a product's characteristics, but they require some imagination to make the connection, like Netflix for a streaming service.

15:21Arbitrary trademarks are words that exist like in the dictionary, but they have no connection to the goods or services they represent, like Apple for a technology company. It has nothing to do with phones or computers. It's just a word that was randomly chosen to kind of convey the spirit of what they wanted to convey. And finally, fanciful trademarks are made-up words with no meaning, like Kodak for cameras. Or think of the names of medications. Most of them are fanciful. They're just completely made up. Remember, the USPTO examines trademark applications on a case-by-case basis. You can do the preliminary research using the Trademark Office's TESS system to check if there are similar or potentially conflicting trademarks that are already registered or pending.

15:59But that's just the first step, because it won't tell you if there are other parties using an identical or similar brand name in the marketplace who haven't applied for formal trademark protection. And that is where consulting with an experienced trademark attorney is the best way to ensure that your chosen brand name is distinctive, strong, and unlikely to face any legal hurdles. So that's really the essence of descriptive or merely descriptive generic trademarks. Avoiding those are really essential for the long-term success and protection of your brand name by choosing a distinctive and unique brand name, conducting preliminary research, and consulting with a trademark attorney, you can do your best to ensure that your trademark is strong and defensible.

16:39And armed with this knowledge, you're now better prepared to navigate the complex world of trademarks and to protect your brand from the pitfalls of merely descriptive or generic marks. I know there was a lot to process, but just think about it. You want your trademark to be distinct, different from anything else in the marketplace, not generic, not just describing what the service is, but really creating a unique brand that is defensible and something that you can own and protect for years to come. If you have legal questions about trademarks, feel free to be in touch with me, David Lizabram.

17:08Just go to Lizabramlaw.com or Google my name, David Lizabram. There's only one of me. You don't have to spell it perfectly. You'll find me. And I'm always happy to talk with members of Fire Nation. Thanks a lot, and I will talk with you next time. Fire Nation, as always, you need to take care of this part of your business. The I's need to be dotted. The T's need to be crossed. So please do reach out to David Lizerbram. And don't go anywhere because we have some awesome things to talk about. We're gonna be talking about the interview of the month, Kate and my 23-day European river cruise, and so much more.

17:41As soon as we get back from thanking our sponsors, The Product Boss, hosted by Jacqueline Snyder and Mina Kunlo-Sitep, is brought to you by the HubSpot Podcast Network, the audio destination for business professionals. Take your physical product sales and strategy to the next level to create your dream life with hosts Jacqueline and Mina as they deliver a workshop-style, hour-long episode filled with social media and marketing strategies so you can up-level as the boss of your business. A recent episode covered the ins and outs of whether you can have a successful product business as a side hustle.

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20:42And we're talking about the ideal anti-inflammatory diet. If you know me, Fire Nation, you know that I am always on a health journey because I know for a fact that the healthy person wants a thousand things in life and the unhealthy person wants one thing to be healthy. So no matter how much success we have in business, in relationships, we need to maintain our good health. So I wanted to bring this one back to the top of the queue for the income report. Hopefully you listened to this. Hopefully you read his book, The Rain Barrel Effect. It's a great start on your journey. And of course, we have a gift for you, Fire Nation.

21:16That's a free inflammation lab test. You need to check out eofire.com slash income117. And we talk about the three value bombs in this income report right now, about how no matter what health issue you're dealing with, someone just like you has overcome that. So it is possible, Fire Nation. Number two, inflammation is one of the body's defense mechanisms. It turns on because it sees something forward in the body like a bacteria or a virus. You can deal with that. And number three is optimizing inflammation. You have to discover the true underlying root causes that are creating the symptoms that you feel, and you can do that.

21:52So man, this is a great interview. Just go to eofire.com, type Cabral, C-A-B-R-A-L in the search bar. Look for the most recent episode. He's been on a few. They're all fantastic. And wow, we have some exciting news that we're going to share with you, but I'm not going to be the one to share. I'm going to pass the microphone over to Kate. She is going to talk about this exciting news. So Kate, stay with us at the Fire Nation and take it away. Hey, what's up, Fire Nation? Excited to be on the mic with you. Holy cow, we are halfway through the year, which is blowing my mind. And we are on income report 117, which is also blowing my mind.

22:35And something that is definitely overly blowing my mind is that our exciting news is that we're expecting. So we sent out an email to share the big news, this big surprise on March 5th of this year, days after returning from our trip to Japan, we found out that we're expecting our first baby. And we could not be more thrilled and just grateful. So blessed. We found out, are we sharing that we found out what we're having? I think we are. Okay. We also have a gender reveal video linked up in the income report if you want to check that out. We had some friends over to our place here in Palmas Del Mar.

23:21We also Zoomed in a ton of our family members and friends who couldn't be here in person and had a great gender reveal. But for the spoiler alert, we are having a boy. Booyah. It's Father's Day soon. What do you think? You're going to be a dad. I'm pretty darn excited as I've shared. I mean, I just feel like you and I have been really very intentional about every aspect of our life, you know, our business, our relationship, travel, like the world that we want to live in. And we were intentional about this process as well. So like nothing was a surprise. We really kind of set a date on a calendar and said, okay, this is when we're going to, you know, give it a go.

24:01And fortunately for us, it happened quite quickly. So we're very grateful and feel very blessed for that. And I know that you and I are both very ready and very excited. And we really feel like we have a lot of our ducks in a row. So only good vibes right now. Good vibes. Absolutely. I know one thing that I was thinking in this whole process is that everyone always says there's never a perfect time or there's never a right time or if don't wait until you're ready because you're never going to be ready. I actually think that all of that is so accurate for us. I do feel like this is the perfect time.

24:40I do feel like I'm ready. And yeah, I'm just so happy to be at this moment on this place in our journey. And I'm so excited for this next chapter for us. Gus is excited too. We got a cute picture of him. Definitely a next chapter and definitely a great photo of Gus. And I want to throw it in here. I'll probably say it again, but man, this income report probably has the best pictures we've ever shared on any income report. I mean, it's definitely up there in the top five. You have to actually go to this post, Fire Nation, and look through this post because we have put up some amazing photos all the way through this to really focusing mostly on what we're going to be talking about next, which is an epic 23-day river cruise that we did in Europe during the month of May.

25:32But before we move on to that, Kate, anything else you want to share on this topic? And then let's chat about the cruise. Just very grateful for everyone's outpouring of support and congratulations and encouragement for this big news. We have read every single one of your notes and messages on social media and emails and everything. And we are so super grateful. So thank you so much for celebrating with us, Fire Nation. Thank you, Fire Nation. All right, on to the next. So you are right. This is probably one of our best collections of pictures that we have on our website. And don't worry, they're not baby bump pictures.

26:10They are pictures from our 23-day river cruise. Yes, 23 days. We are on a boat for a very long time, meandering our way up the Danube River, down the Rhine, and holy wow, did we see some incredible places. Actually, on the baby note, I was so incredibly grateful and happy that I had hit my second trimester by the time we set sail. I was feeling so much better, not feeling all the all-day sickness all the time. So the timing could not have been better for us setting sail. And we set sail May 2nd in Bucharest, Romania, and we made our way all the way to Amsterdam. We went with seven other couples.

27:04So we had quite the crew on this boat, which was so cool. We got to have a ton of our friends from Palmas Del Mar join us. and what a special way to spend our time on the river and going through these different countries and towns. Again, we have so many pictures from our travels. Don't worry, we won't detail out every single one of the 23 days. But John, why don't you talk about what were some of like the highlights for you? I really love the beginning part of the cruise and that's probably gonna be different from other people you might talk to on a cruise like this because you started in Bucharest, Romania, floating down or sorry, up the Danube for a bunch of days until you kind of get to the approximate halfway point in Budapest, Hungary, which was an amazing stop.

27:54But I loved just how in the wilderness it felt you were during those first number of days because you're just going through wilderness. You're not seeing many towns or even really forms of life besides wildlife. as you're floating down here. And I thought that was a really cool aspect of it. I really enjoyed that first leg. So I loved the second leg, which was from Budapest to Amsterdam as well, which included a lot of the Rhine. In fact, I would say the number one day for me was when we were going down something referred to as Castle Alley in the Rhine, where every turn you would just come across this epic medieval castle just towering over you.