January 2024 Income Report

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 Sales Evangelist. Today is the income report for January of 2024, and we have a lot of fun stuff to talk about today. We'll be talking about planning your exit strategy. We're also going to be talking about the new beneficial ownership information reporting requirements, important stuff, Fire Nation. Plus, we'll be talking about parenthood, our interview of the month, and so much more. All of this as soon as we get back from thanking our sponsors.

0:38Marketing Made Simple, hosted by my friend, Dr. JJ Peterson, is brought to you by the HubSpot Podcast Network, the audio destination for business professionals. Marketing Made Simple brings you practical tips to make your marketing easy and more importantly, make it work. A recent episode on whether vulnerability is a superpower in business is a must listen. Listen to Marketing Made Simple, wherever you get your podcasts. All right, Fire Nation, we are back and we have a lot to get you today. So I'll dive right in with our income at a glance for January of 2024. Our gross income was$146 ,283. Our total expenses were$10 ,863.

1:16We keep trimming those down for a total net profit of$135 ,420 for a$5 ,000 increase over last month. That is a 93 % net profit overall gross revenue number, and I love that. And Fire Nation, today we're going to start with CPA on Fire, Mr. Ron himself, sharing with us what we need to know about planning our exit strategy. Ron, take it away. Hello, John, and hello, Fire Nation. This is Ron Parisi with CPA on Fire for your January 2024 tax and accounting tip. Hey, Fire Nation, hopefully you guys are doing well. Hopefully 2024 started really well for you guys. Today's tip or topic is planning for your exit strategy.

2:05In this segment, we're going to be covering three topics. Always be ready, complex to simple, and the power of story. when I talk with our clients about exit strategies or in just in general really I always say always be ready no matter what size fish you are there's always usually a larger fish or somebody that may be interested in acquiring your company you know we see kind of some of the least planned exits happen with the most force and the greater upside for the seller. So in my mind, as an entrepreneur, you should always be ready for that knock at the door that somebody's maybe ready to acquire, and maybe the number is good enough for you to sell and maybe pursue another business or another activity.

3:08So I always say always be ready. And two is that, you know, don't discount, you know, maybe a large joint venture, maybe some type of merger where you're still involved in maybe a bigger company. So just, you know, always keep your mind open for possibilities. Number two is, you know, complex to simple. When you're growing your business, very rarely does things get simpler. Most likely the complexity of your business, the temperature raises up, it becomes more complex. And I think the success for you to go from, you know, a small business to a mid or size or a large business and particularly a profitable business is you, the entrepreneur, the business owner, creating, you know, taking that complexity and making it simple.

4:03And what I mean by that is everything you do has to be broken down and has to be simplified and has to be able to be digestible to, obviously, your client, to potential employees, and potential merger or acquirers, to buyers. So, you know, through, you know, as you grow your business through your business cycle, you should always be thinking about, okay, as my complexity grows, how am I simplifying? And how am I simplifying my message? How am I simplifying my mission? And I think that's an important piece as well is just, you know, you know, what, you know, like what we do at CPA and FIRE, right?

4:50You know, we spent a long time trying to simplify our message, even though everything kind of behind the curtain is relatively complex with taxes and different accounting rules and things like that. So always be trying to simplify your message to the outside world. And then number three is the power of story. I'm sure everybody listening, right, understands the power of story. but really you need to look at what I talked about your numbers right you have to look at your financials and you have to look at your business and you have to say you know what what's what are those numbers what are those financials telling the story right about your business so I think it's important right that you look at trends you look at what's happening within the business looking at profit drivers, revenue streams, things like that, and try to build a story out of your business.

5:52And then part of the story as well, don't forget our other assets. So we have IP, and that's domains, processes, other intellectual property, whether that's apps, software that you've developed yourself, but also look at your client lists. Another big aspect, prospect lists. How many lists do you have in your CRM system? These are important assets for buyers when they look and they value companies. So definitely look at the power of the story through the financials and through what you've been able to do with sort of your ancillary assets as well. So in sum, always be ready for that exit strategy, no matter where you are in your business cycle, always be thinking complexity to simplicity.

6:45Um, and then last, you know, what's, what's the power of the story, you know, through the eyes of your financials, through the eyes of your assets of your business. Um, I think if you, you know, kind of keep those three aspects in front of you as you're driving the success of your business, you know, when that opportunity comes for a successful exit, you'll be more than ready. So there you have it, Fire Nation. Really appreciate it. Just want to be mindful, right? I kind of go in depth on exit strategies in chapter six of my financial superpowers, how to take your business and personal wealth next level.

7:23You can grab an electronic copy on our website, cpaonfire.com, or you can get a hard copy on Amazon. So hey, Fire Nation, wish you the best for 2024. Until next month, this is Ron Parisi. with CPA on Fire. Ron, thank you as always for breaking down a very important process that could really impact a lot of our listeners at some point in their entrepreneurial journey. Next, we're going to talk with David Lizerbram. His legal tip is FinCEN's new beneficial ownership information reporting requirements. Fire Nation, it's a mouthful, but it could save you bunches. So listen close. David, take it away.

8:00What'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, boy, over 21 years, and I have lots of free content over at my website, lizabramlaw.com, L-I-Z-E-R-B-R-A-M, law.com. And this month's legal tip is all about a new rule that applies to most LLCs and small corporations doing business in the United States. This is like one of those things that, what you don't know can hurt you, kind of obscure, but definitely important for everybody who has a small business or medium-sized business even to know about. So as of January 1st, 2024, the U.S.

8:39Treasury Department's Financial Crimes Enforcement Network, which is called FinCEN, has imposed a new obligation on almost all corporations and LLCs doing business in the U.S. Companies that fall under this obligation, we're going to call them reporting companies, must file reports containing identifying information of certain individuals with a limited number of exceptions. And this is an ongoing obligation, meaning it's not a one-time filing necessarily. These reports are required when certain changes are made to the company. So let me go over some of those details. So first of all, which companies does this apply to?

9:13Or you can think of this as, does this apply to me if you're listening to this? So the rule does not apply to companies that fall within certain enumerated exceptions. But most small and medium-sized companies won't qualify for the exemption. So exempt companies include larger entities that employ more than 20 full-time employees and have greater than$5 million in annual gross revenue or sales, as well as investment companies and certain entities registered with the SEC. So if you're operating a smaller or newer business, meaning you have fewer than 20 employees or you have less than$5 million in annual gross revenue or sales, the obligations will most likely apply.

9:53I want to make sure that's clear. so in order to be exempt you need to have both 20 full-time employees and greater than five million in annual gross revenue or sales so if you do if you have two employees but you're doing 10 million dollars you still have to report etc okay when do we have to comply if you're starting a new company beginning on january 1st of this year 2024 and going forward the filing must be completed within 30 days of the formation of the company so if you file today you need to file within 30 days if you have an existing company that was formed before 2024 you have until the end of calendar year 2024 to comply.

10:28So basically by December 31st of 2024, all reporting companies have to comply at some point. Next question, whose information must be reported? So reporting companies must provide FinCEN with information about the company's quote-unquote beneficial owners. So a beneficial owner is an individual who either directly or indirectly, number one, exercises substantial control over the reporting company, or number two, owns or controls at least 25 % of the reporting company's ownership interests. So number one, exercising substantial control, you know, that could apply to like a company's senior officers like CEO, president, COO, CFO, general counsel, et cetera, or anyone who has input on budget approval, major expenditures, or other significant company decisions.

11:16So that means that somebody could own none of the company, no equity or no stock, or they may control own, let's say, less than 20%. But that still could be a person, either because they're a senior officer or because they have some input in reality into the company to exercise substantial control. And sometimes you get that. You may have an investor who owns 20 % of the company, but they have a substantial role, and then their information would need to be reported. There's really no easy black and white rule to determine who is or is not a, quote, beneficial owner. So my recommendation is that the requirement be understood to be very broad, meaning if there's a person who might fit any of the obligations listed above, they should be considered a beneficial owner who's subject to the obligations of the rule.

11:59All right, now, what information is required? So for each beneficial owner, the company must provide to FinCEN, number one, the individual's name, number two, the date birth, number three, residential address, so not just the address of the business, but that person's residence, and an identifying number from an acceptable ID document, like a passport, U.S. driver's license, and the name of, you know, where that state or country of the document came from. So it's important to know that the government says this information will not be easily available to the public or won't be available at all.

12:35FinCEN's website says beneficial ownership information reported to FinCEN will be stored in a secure, non-public database using rigorous information security methods and controls typically used in the federal government to protect non-classified yet sensitive information systems at the highest security level. Okay, that is what it is. But the information has to be reported. Once the initial report is filed, there's no annual obligation to update it. You don't have to do it every year. But it must be updated within 30 days of a change to the information about the company or its beneficial owners, meaning if a new senior officer is appointed, Let's say the company brings on a new COO.

13:09You have a small company. You bring somebody on to be your COO. Boom, that's a change. You have to update this information within 30 days. Or someone else becomes a beneficial owner. Let's say you have a partner and they have 20 % and then they invest a little bit more or you grant them some more stock and now they own 25%. Boom, now they're a beneficial owner. Or if one of the beneficial owners leaves the company. So you have a partner and they sell their stock back to you or whatever happens. Any of those types of things happen. That means an updated report must be filed within 30 days. So, you know, Sally owns 20 % of your LLC.

13:44She gains an additional 5 % equity. Now she owns 25%. She's a beneficial owner of the company. You must report Sally's information to FinCEN within 30 days of the change becoming effective. What if you're listening to this and you say, well, I'm not going to bother complying. What are the penalties? Well, according to FinCEN's website, a person who willfully violates the reporting requirements may be subject to civil penalties of up to$500 each day that the violation continues. That's not$500 once. That's$500 per day. The person may also be subject to criminal penalties of up to two years imprisonment and a fine of up to$10 ,000.

14:20So that's pretty significant, I would say. Given the severity of those penalties, it's recommended that companies review their obligations regarding these reports on at least a quarterly basis, as well as any time the company's beneficial ownership may have changed. So this is something you need to keep an eye on on an ongoing basis. You've got to do it now, but also think about it. And if you're right now, you're just a sole proprietor, maybe you form an LLC later this year or you form an S corporation. Okay, now this, again, these rules are now applying to you. So you've got to be aware of this kind of thing.

14:50there's more information that can be found on FinCEN's beneficial ownership information reporting FAQ page which is available in the income report online or you can just google that FinCEN's beneficial ownership information reporting FAQ anything like that you'll find it if you'd like assistance complying with FinCEN's new rule you can contact me I'm always happy to talk with members of Fire Nation again it's Lizzerbramlaw.com or just Google David Lizardbram attorney. You don't have to spell my name perfectly. Don't worry about it. You'll find me. I look forward to speaking with you. And thanks a lot.

15:25And I will talk with you next time. We look forward to next time, David. And thank you as always for spending some time with us today. In Fire Nation, we're going to be talking about what went down in January, settling into parenthood and so much more when we get back from thanking our sponsors. Are you ready to start your year off with increased revenue, faster growth and record-breaking performance? Well, a powerful sales platform can make it all happen And for that, there's the all new Sales Hub from HubSpot. Sales Hub is an all on one platform thoughtfully built with the tools and insights you need to communicate on a personal level with every lead, prospect and customer.

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16:32With Sales Hub, closing deals is no big deal. Head to HubSpot.com slash sales to try it for free. All right, Fire Nation, we are back. And as promised, we're going to dive into the interview of the month. It was the top non-food franchise opportunities for 2024. We brought John Ostenson back on the mic because he is the expert in this topic. And we talk about one overlooked aspect of business is focusing on stewardship and family legacy. We talk about when advising early stage entrepreneurs, John believes there are three key aspects to consider, mindset, talent, and investment criteria. And the third thing, people are crucial to any business, whether the individuals you hire or the franchisor you partner with.

17:15And we really expand on this Fire Nation. So definitely check out that episode as well as Fran Bridge Consulting because you can get a free chat with John if you want to learn more about franchising or his free book, Non-Food Franchising, when you jump on a call with John directly. And Fire Nation, we're finally going to get to bring Kate Lynn Dumas onto the microphone as we talk about settling into parenthood. Kate, say hello and take it away. What's up, Fire Nation? Excited to have this opportunity to hop on. Happy New Year. I'm kind of, well, I guess we recorded our December income report technically in the new year, but happy official 2024.

18:00I can't believe it's already mid-February, but I guess having a baby does that to you. The way that I used to say time flies before, now it flies 10 times faster. Do you think so too? I don't actually really think time's going by any faster just because every day to me, it's like sitting and enjoying Bo and seeing the slight little growing that he does, the smile, the rolling over. So there's so many more markers for me than there used to be when kind of every day just blended into each other. So I kind of disagree with you, but hey, no worries there. Yeah, I definitely agree with you on, I mean, we're so lucky to have this time that we get to spend with Bo every day.

18:41And like you said, every day, it's like a new little change that we notice. Sometimes I look at him and I'm like, you look different from yesterday. What's going on? It's hard to believe he's already three months, though, as we're recording this. He just turned three months yesterday. And, you know, thinking about our January, I was trying to figure out like what was so unique about this month. And really, it was that for the first time since Bo was born, you and I were on our own with Bo. We had had family or company in town since before he was born. So we had your parents who arrived on November 11th, which was Bo's due date.

19:21Bo didn't come until the 14th. So we had a few days with your parents solo. Then your sister and her family came. They overlapped with your parents. And that was awesome. Everyone got to meet Bo. And then after your family headed back to Maine, my parents arrived. They were here for seven weeks, which was awesome. I honestly didn't know how I was going to feel about that before it happened, but it was so, so nice. My sister came the day after Christmas, so she overlapped with my parents a little bit and my parents. So what was unique about January again is that my parents left January 26th and for the first time it was me, you, Gus and Bo in this house alone.

20:07It has been incredible. I've really, really enjoyed Bo getting to meet all of his grandparents. I think that's incredibly special. I'm so grateful for that. He got to meet some of his cousins, his aunts, both of his aunts, one of his uncles. so all of that was so great and having the support and people around to just kind of talk through things with the emotional support was awesome my mom was obsessed with like holding Bo whenever she possibly could so that was incredible because it gave me a chance to do a few things and just getting to see her with Bo like even being there hanging out with her and Bo was really great but I also think there's a lot to be said of you and I, John, being on our own and kind of trying to, you know, see what our own routine is going to be with Bo because it was a little hard to do that with people with company here.

21:06And, you know, my mom, like wanting Bo to nap on her all the time, obviously that's not going to happen when she's gone. So it's also been really special you and I getting to figure this out and kind of see what our routine is going to look like, get into our own rhythm and flow. And that's kind of what a lot of January was, is soaking up that time with family and then also transitioning to our own parenthood. That has definitely been happening. And Fire Nation, I will just tell you straight off the bat, if you hate photos of cute babies, do not go to eofire.com slash income125. Just don't do it because it will ruin your day.

21:49There are so many cute bow photos on that site that I just, it'll ruin your day. But if you like or love photos of cute babies, or at least what we think is a cute baby, check out eofire.com slash income125 and you will get to see a smiling bow, a serious bow, a rolling over Bo, you're going to see a lot of Bo Arthur Dumas. Bad. B-A-D are his initials. So there's no more JLD and the his-o. It's all about B-A-D, just taking control of the household. And by the way, I'm looking at that photo again of us down at the beach with your parents, me, you, and Bo in matching Christmas pajamas. And then Gus is actually just posed amazingly as well.

22:40The only person who is not a perfection emotion is Bo who's closed his eyes by accident. I know they were open a second before that, but that, that photo is a one for the ages, just a beautiful Christmas day photo that we took at the beach in Puerto Rico with the whole family. And of course, a little extended family of Kate's parents as well. So a lot of Bo, a lot of love. and luckily we have the lovely Jamil in our life. I think this is the first time that Jamil's made the Entrepreneurs on Fire podcast, but she is our daily help, our house manager, doing our shopping, some of our food prep, pretty much all of our cleaning and all the stuff that just makes Kate's and my life easier so that we can focus on the things we wanna do, like spend time with Bo, like spend time with Gus, exercise, still have some form of a social life and just enjoy the moment.

23:38So Kate, anything else that you want to talk about when it comes to Bo? There's something I want to talk about when it comes to Jamil and that is that she is an angel sent from heaven. She's so incredible having her around the house to help with stuff. Like you said, has just allowed us so much like dedicated, focused time with Bo, being able to just be fully present with him like that and not be thinking about like the dishes and the laundry and everything is so amazing, so amazing. And I'm so glad that I'll kind of circle back to this and the biggest lesson learned this month. I'm so glad that you and I were both open to asking for that support because it has made a world of difference.

24:25Well, we are already over 30 minutes into this income report, so it's not going to be a short episode this month. But before I do move on, is there anything that you want to talk about, bow-related, not bow-related, before we dive into the next topic? I mean, just how cute he is. You have to go see these pictures. This tummy time picture of him looking at this multicolored fish is just ridiculous. He looks I mean, the typical prejudice parent you're hearing right now. It just happens. But listen, check it out to eofire.com slash income125. And now we're moving on to our income breakdown. Our product service income was$138 ,522.

25:08We're still selling journals like a boss. 103 journals were sold in January. Let's see. The Freedom Journal came in at 56. people getting after their goals, 31 mastery journals and 11 podcast journals for a lot of money. And then Podcasters Paradise brought in over$8 ,000, which was fantastic. Our podcast sponsorships,$126 ,550. So thanks to you for listening, Fire Nation, and for hopefully taking action from time to time on our sponsors to give them some ROI and to keep them coming back. and affiliate income was$7 ,761. For a total gross income of$146 ,283, our expenses were razor thin. Great job, Kate.

25:55You did a fantastic job this month on expenses. $10 ,863 for a net profit of$135 ,420. And as I mentioned, that's a 93 % percentage of net profit to overall gross revenue, which I think is our highest we've had. It's close. It's at least tied for the highest. We may have had a 94 one month, but that's way up there. And Kate is going to bring us home all about, as she promised, circling back to asking for support. Yeah, I was going to say, I do think that this might be our highest net to gross percentage, but 94 does sound familiar. So it's right up there. It's up there. We'll keep working on keeping it there.

26:37I like it. Asking for support. Yes, this has been a big lesson for me over the past few months because this is not something that I've always been super great at, especially in my adult life. Since becoming an entrepreneur, I feel like I've just learned to figure things out on my own. And so asking for help or support is, you know, a little bit difficult at times. You never want to like put people out and sometimes it can feel just like, oh no, I can do this by myself. But as soon as I found out I was pregnant, I knew that I was going to have to work on this big time. So I did. And I think a lot of entrepreneurs can relate to this, to this feeling of like, oh, no, I've got this.

27:22I can do this on my own. But since Bo was born, I've been so incredibly intentional about accepting support when it's offered and also asking for it when I need it. And sometimes that can be hard to identify in the beginning. But, you know, if you are intentional about it, if you do identify this as something that you want to honestly give a fair try at working at, then you can make progress and become better and better at it. And I've noticed in the instances that I do ask for support that people are more than happy to provide it, which makes absolute sense. Because if I think about the times that my friends or family have asked me for support, of course, I'm happy to help them.

28:03I want to help them because supporting those you care about feels good. It makes you feel like you're supporting them. And so does being supported. It really does feel great to ask for help and then to receive that help. And again, you're giving that other person the joy of being able to do something for you. And one thing that I've learned about asking for and offering support is that the more specific you can be, the better and easier for everyone involved. So I want to give a quick example because I've run into this a lot of times where I've found myself doing this. And then I've had a lot of people do this since we've had Bo.