July 2024 Income Report

0:00What is up, Fire Nation? We have something a little different coming at you this month for the income report. Myself and Kate are actually on a three-month vacation right now. We actually are spending about a month and a half, close to two months in Maine, then another month in San Diego. And so we're on the move. And of course, we have Bo with us, little Boesky, who's now nine months old, which is crazy. And so we are on the move. We decided, hey, let's just keep things simple and let's just record an income report that is just kind of off the cuff and it's just kind of a bonus episode that's just gonna be dropped into our feed.

0:42So there'll be two episodes this day, one like official episode and then this kind of just bonus episode as an income report. So no sponsorships, none of that stuff, just Kate and myself kicking back. And by kicking back, to kind of paint the scene for you here, We're actually in this pretty cool building in Portland, Maine, on the deck of this beautiful vista that I'm looking at where there's speedboats and yachts and sailboats and seagulls and trains are going by. So you may be hearing a lot of different noises. Again, you might be hearing seagulls. You might be hearing horns from a train. You might be hearing just some other things that happen on a very active and lively coast of Maine that we're looking at right now.

1:29So I hope you can just bear with us here and have a good time because we're just here to hang out, have a good time, and share a few cool things with you that happened this month. Of course, our income is always, I'll start there. Our gross income was$170 ,866 for July. We had expenses of$12 ,502 for a total net profit of$158 ,364, which was a$46 ,000 increase over last month, and a net profit percentage to overall gross revenue of 93%, which you know that I love. We're going to have a tax tip from Ron. We're going to have a legal tip from David. I'm going to let them both take it away. There are going to be a couple of good conversations.

2:16Ron's going to be talking about traditional rear view financial reporting versus proactive forward facing financial insights might be a mouthful, but it's important stuff. And then David's going to rock it with business partnership basics. So we're going to be having them come on the mic, but then we're going to be talking about some really cool things later on the interview about our top interview of the month. We're going to talk about our time here in Maine. We're going to get into the exact specific numbers. And of course, Kate always has that final amazing farewell blurb that we'll get into today as well.

2:51So Ron, take it away. Hey, John. And hello, Fire Nation. This is Ron Parisi with CPA on Fire for your October 2023 tax and accounting tip. Hey, Fire Nation. It is cold here in Ohio. I'm fired up. We're coming down to the end of the year for 2023. what I think was a very, very quick year. So basically what we do every month, right? We talk about tax and accounting tips for you, the entrepreneur. And I thought I would bring up a topic regarding financial reporting. It's called rear view financial reporting versus forward facing, forward looking. And it's something, you know, we've been working with a new client and how it's really been able to transform their operations and sort of their mindset.

3:48So let me define rearview accounting, right? So I really do think the accounting industry in general does a disservice to entrepreneurs, right? Most entrepreneurs, I'm sure, Fire Nation, right? We always want to do better with our businesses. We want to improve operations. We want to grow, become more profitable, build our wealth. And I think the accounting industry does a disservice with this rearview accounting. It's definitely compliance-based. But usually, you know, you have your operations, you have a bookkeeper, and they're giving you, you close the month, you're getting that month's financials, you know, 15, 20 days later, if you're lucky.

4:34And you're trying to sit there and figure out, okay, what was working last month? wasn't working this, you know, what worked, what didn't work last month, and you're already, you know, three quarters or a full month later, and maybe there's a whole host of different problems and different issues to solve or things that are going well. And I just want to kind of introduce to you kind of forward-facing financials. And that's what I think is creating forecasts, creating budgets for your business in the future, obviously. And what you do is as the month rolls on, you're constantly looking at those targets built inside those forecasts and budgets comparatively to actual.

5:21It's called budget to actual. And you're constantly measuring, you know, where you want to be, you know, those forecasts and budgets kind of marry your goals, where you want to be, you know, a year from today, where you want to be three months from today, or where do you want to be three years from today? And you're You're constantly looking at how the business is performing to where you want it to perform. And every month we do what's called the budget to actual analysis. And we see, okay, where are the profit drivers? How are these certain key performance indicators working? And we're always sort of course correcting every month, but we're doing it forward facing, right?

6:00We're not living in the past. We're looking into the future and kind of, again, seeing, okay, where are my goals? and how do I need to get there and how am I measuring my performance to meet those goals. For this new client of CPA on Fire, this was transformational. Just never knew how to manage their ad spend, when they could bring on certain team members. They wanted to bring on certain key leadership inside the organization. Was sort of blind to when can I bring this person on, at what revenue size, um what are how are these people going to affect my margins so we really built a uh pretty uh nice you know three-year forecast on the revenue and then a rolling 12-month budget uh from an expense side and we sort of like i always talk of snapshots right like pictures and time so we kind of looked at all right today we looked at a month we looked at three months we looked at a year from today and what that org chart would look like, what that ad spend or sort of that ad strategy, marketing strategy would look like.

7:10And it really transformed this individual, this entrepreneur's thinking. And they went from just always looking and being very analytical about past performance to, holy moly, this is what I'm striving for. How am I going to get there? and really got into a good cadence with looking at that budget to actual, changing things very quickly that needed to be changed. And I think in general gave this individual a huge amount of confidence to make those decisions and their performance has been outstanding. So I just thought we take this month tax and accounting tip to look at sort of the rear view accounting, sort of the compliance-based accounting versus forward-looking accounting and using certain tools to really, you know, marry together your long-term goals with your financial reporting, your financial operations.

8:12As always, Ron Parisi with CPA on Fire. Always a pleasure being with you, Fire Nation. Until next month, go out there and crush it. We'll see you soon. Ron, thank you for that as always. Rocking the mic, brother. So appreciative. And we're not going to hesitate. We're not going to stop because David's waiting in the wings with a great legal tip on business partnership basics. So David, take it away. Let's say you and I are at a game, we're talking and we come up with an idea for a new business and we're really excited about it. And we go out the next day and we're fired up and we're starting it.

8:46I'm going to just make something up. Let's say we're going to start a taco truck. And I'm from San Diego, so everything's about that. So we're really excited we started. We're starting to work on it. So what happens is when you have a business with one or more other people and you haven't formed an entity like Josh was talking about in terms of a corporation or an LLC, what you are is a partnership. Even if you've never signed one piece of paper, you just have to be something. So the default is that you're a partnership. So I wanted to talk real briefly about partnerships and just kind of how they work.

9:20So like I said, you and I are now working together. We started this business. We haven't put anything on paper or formalized anything. So we are acting as business partners. And that's not necessarily a bad thing or a good thing. It just is what it is. So just real quick setting the table, when people talk about business partnerships, generally speaking, there's two different kinds. There's general partnerships and limited partnerships. And maybe in future income reports, we can get into the details of how these different aspects work. But real briefly, the standard form is a general partnership, right?

9:55So each – it might be 50-50. It might be something else. But each partner has liability for the debts and obligations of the business. So if the business is sued, each partner might be liable. Limited partnerships have to be formed with some specific legal language and filed with the state. And in limited partnerships, only one or sometimes a few partners have that liability. The others are quote unquote silent partners. So they're sort of investors. They're not directly involved in the management of a business. A lot of times you'll see that in real estate. So you might invest, hey, I've got 100 grand I want to put into this office tower that we're putting up.

10:33OK, I'm going to be a silent partner. I just want to invest. I don't want to be directly involved and I don't want to be directly liable. So that's a specific thing. But putting that aside, a general partnership is what we're going to be in this business. So, you know, we can talk all day long about forming LLCs and corporations and the advantages of it, but it's not always right at every business at every moment in time. So if you're going to be in a partnership, it's important to think that through. My sort of highest level advice is going to be for any kind of contract, but certainly for this is going to be that you want to have something in writing.

11:08You want to sit down and work out with your partner or partners what the terms are going to be. Who's going to own what? Who's obligated to do what? What the responsibilities are? Are you working full time on this business or part time? How are people going to be compensated? Is the money going to be put back into the business or are you going to take it out for your personal income? All these kind of things need to be worked out. First, it should be the partners just talking among themselves and then, you know, something more formally, hopefully with an attorney. And the kind of thing that people need to think about that, you know, sometimes gets avoided or is a little scary or uncomfortable is what happens if things don't work out?

11:46Because John, you and I are, you know, at the game, we're fired up about our new concept, we're ready to go start this business. But if you and I are not comfortable with each other enough to say, hey, John, I really like this idea, but maybe a year from now, I'll just get sick of the smell of tacos and I won't want to work in that truck anymore. Or maybe you'll decide to start a podcast and become super successful or whatever. We need to be able to discuss this honestly upfront. If you're not comfortable with that person having an honest conversation about what might go wrong, then that might be a red flag that this might not be a business relationship that's worth getting into or something you need to think about carefully.

12:23So partnership agreements, whether it's just something informal that you write up or work with an attorney, have to include language about what happens if one partner wants to leave or has to leave, whether it's because of illness or another job, moving out of town, any number of things can happen. Typically, that's called buy-sell language. And again, maybe in a future income report, we can get into that in a little bit more detail. But it's important that Fire Nation, whatever type of business you're getting into, you know these terms. You can recognize them at least enough to be able to go look them up and go back and say, oh, yeah, I heard that on an income report.

12:59I'm going to check it out and make sure I have that or talk to my lawyer because all these things are really important. And I know there's kind of a lot of stuff that I just ran through. So if you want to get a three-step checklist on partnerships and just kind of keep that stuff in your head for when the time comes, you can go to my website, productsofthemind.net slash EO Fire Partnerships and download that for free. I'm sure that will also be in the show notes for this income report. So what do you think, partner? We're going to do it. Tacos all the way, baby. You make me want to have like 15 tacos right now.

13:32You've got to come back to San Diego. And I mean, I know they've got tacos in Puerto Rico, but it can't be the same. No, it's not the same. Totally different. There's no Taco Tuesdays down here, which we should probably implement because it'll probably go over well. But Fire Nation, the one takeaway that I'm really getting here is if you are failing to plan, you are planning to fail. Like that is a phrase I want you to just to realize, to absorb, to say over and over again. And David, you are right. You went through a lot of things right there. So let's just kind of have you maybe take one or two sentences, sum up like a key takeaway way that we can just really kind of bite into and then we'll move on from that.

14:07Don't be afraid to talk to your business partners, whoever you're working with about, you know, the tough stuff. What's going to happen if for one reason or the other, you or another person needs to leave, get that in writing before you start the business, before you invest your time, your money, your energy. Make sure that you guys can have a frank and honest discussion. Get it in writing. If you can work with an attorney, there's a lot of good attorneys out there who are happy to help with this kind of stuff. And, you know, nobody has ever said to me, John, boy, I wish I hadn't sat down with my partner at the beginning and gotten things in writing.

14:41It's just never, nobody ever says that. Love that. And just real quick again, how can Fire Nation get a hold of you? Productsofthemind.net is my website with all kinds of tons of free legal tips on partnerships and trademarks and copyrights and LLCs and all kinds of fun stuff. Or you can get me on Twitter at David Lizabram, which I think will be linked in the show notes because you probably don't know how to spell it, but I'll let you give it a shot. Thank you, brother. Much appreciated, David. And Fire Nation, of course, if you want to get a hold of Ron, it's cpaonfire.com or just type Ron at cpaonfire.com into the email address list and it will go right to him and he will respond.

15:20He loves hearing from Fire Nation. And of course, David Lizerbram, you can always check him out. Just type Lizerbram into Google and his law firm pops right up. He has a lot of cool things going on there. So just contact him. Always looking forward to speaking with Fire Nation. Now we're going to be talking about our interview of the month, and that is the key to sound success with Mike and Isabella Russell. The three value bombs that came from this episode are pretty awesome. Number one is everything starts with passion in every industry. They have found that to be the case. And if you've ever worked with Mike or seen Mike and Isabella's work, man, they have passion and it works so well with them.

16:01Number two is attention to detail is incredibly important. And again, if you look at what they do, they are so attentive to detail and it helps them in their business so much. We get into that specifically. And then number three is if you do a lot of little things, you can never do anything big. So Fire Nation, do you want to do a lot of little things in life or do you want to just do one big thing that really matters? And we talk about that in detail. music radio creative check them out you can just google that or just go to music radio creative dot com it's a great website they've done a lot of good work there it's been something that i've used over the years multiple times in fact i just had a one-on-one uh consulting call where i paid mike for his time which is very valuable um to come on and answer some like really high level questions for me about adobe audition and to really set things up to the next level and he did that.

16:55It was super efficient and really fun and so valuable. So again, you just want to work with the best Fire Nation and these two people are great at what they do. So thank you, Mike. Thank you, Isabella. You two are awesome. Now we're going to pass the mic over to Kate because we're going to talk about heading to Maine. I mean, this is our first trip as a family of three. So myself, Kate and Bo hitting the road. Kate, take it away. What's up, Fire Nation? As John shared, we are sitting out on a balcony overlooking the Casco Bay in Portland, Maine. And man, is it ever a beautiful day. And we have experienced many, many beautiful days since heading to Maine in late July.

17:39So we'll have lots more to share about our trip in our future income reports because we are here until September 9th. That's right, almost six full weeks, I believe. We are on the road here in Maine, and we're actually headed straight from Maine to San Diego. So lots of travel adventures to share ahead. And we've started to do that in our July income report with some great pictures and a little recap, eofire.com forward slash income 131. And yes, we were very excited to embark on our first trip as a family of three. I traveled with Beau in June, but John stayed back in PR. So this is our first trip together.

18:25We are very sad to not have Gus with us, but you know, traveling with a baby is enough. We would have loved to have him here, but with all the moving pieces of our trip, we're hopping around different places in Maine. And then, like I said previously, we're headed to San Diego. So Gus is back home being loved on by all of our friends who have graciously agreed to watch him for us. So before COVID hit, we always spent about three months traveling in Europe during hurricane season, which is right now. And typically we would leave around mid August and come back early November. And while we are definitely excited to get back over to Europe with Bo along for the ride this time, we decided to hang stateside and visit family.

19:13And it has been absolutely incredible. We've gotten to spend a ton of time with John's family. We've got some great pictures of Bo hanging out with his poppy, which is what John's dad is going to be called, and Cece, which is John's mom. And they have a dog named Call. and you'll see a couple of cute pictures of Carl. Carl just loves Bo and Bo likes him as well. And we've taken some great walks every morning and every evening. We did a pretty huge commitment in taking our Bob jogging stroller along. This thing is a beast, but man, we have been using it multiple times every single day. That has been really great for going on runs and such.

20:06And man, we've just had so much fun. Boat time, hiking time, family time, camping time, Portland time, and the adventures are just getting started. So very excited to continue keeping you up to date on our travels. Beau has been such a rock star on this trip. he is even amidst getting teeth number five six and seven all at the same time he has just been such a champ I think he's really loving just seeing all this new stimuli and experiencing new things meeting new people he really is such a great baby and he's been so much fun to travel with. So I will hand it back over to John to kind of add his two cents about our time in Maine so far, in addition to what he already shared at the beginning.

20:59And excited to circle back with you, Fire Nation, for the biggest lesson learned this month. Thanks, Kate. And yes, there's a reason why Maine's motto is the way life should be. Because man, I'll tell you, this time of year, it really is the case. I mean, every day has been in the 60s, 70s, maybe low 80s. The humidity has been amazing, especially compared to Puerto Rico. So been loving that. We've had some rain, but you know, that just happens. But overall, the weather has been really nice. It's been great seeing so many friends and family and just getting around. And we have a lot more awesome stuff planned as well.

21:38We'll be doing the income report for September while we are in San Diego, which will be fun. So it'll be another kind of laid back, chilled income reports, kind of like this one too, which will be fun. But I definitely do recommend going to eofire.com slash income 131 because those pictures that Kate was talking about hanging out with, you know, Poppy and Cece on the boat, they're all there. The pictures are great. And you know, Bo is growing up right before our eyes and the pictures are just super cool. But let's talk about the income breakdown for July. The product service income was$154 ,000.

22:14We did a total of$887 in sales for journals. We sold 24. We did 12 freedoms, two masteries, and five podcast journals. Podcasters Paradise brought in a little over$4 ,000,$4 ,017 to be exact. We did$149 ,000 in podcast sponsorships. Our affiliate income was$16 ,745, and our total gross was$178 ,66. Now, our expenses for that month were$12 ,502, which gave us a net profit of$158 ,364, with that 93 % of percentage of net profit to overall gross revenue, which we're really excited about and proud of. So another great month here, 131 months in a row of six figures plus for Entrepreneurs on Fire. Even as we're traveling to different parts of the world, life is good.

23:15On that note, the biggest lesson learned is schedules equal flexibility. And Kate will be joined by an airplane in the background. If you can hear that, that's just what's happening today. So Kate, take it away. Well, this lesson learned has been so apparent, especially since we've been on the road. And as many of you tuning in who also have children know, having a baby and navigating a new normal when it comes to getting work done teaches you a lot. And I have learned so much and it's only been nine months. So I know that there is a lifetime of lessons ahead. but one lesson that stood out for me this month is the importance of having a schedule and how this has helped me be so much more flexible I know a very common misconception among entrepreneurs and creatives is that having a schedule in place will stifle spontaneity and not allow one to be flexible not allow one to be creative and I just absolutely do not agree with this we have reached a whole new milestone with Bo thanks to sleep training.

24:24And this is just one example of why I don't agree with this idea. Because he went from taking four or five 25 minute naps throughout the day, to two naps that are at least an hour and a half each. And as a result, we have so much more of a predictable schedule, which allows me so much more flexibility with those time blocks that I did not have before. It not only allows me to get more focused work time in, but it also allows me to plan fun outings and activities for us to do in between his naps. So up until now, we really haven't had a consistent schedule. And that has really tested my patience first off.

25:10But it also wasn't allowing me to have flexibility or to be creative with the things that we were going to do because I felt like we were always just kind of waiting for that next nap to happen. But now that we're onto this new stage, I feel like the world is our oyster. And it has been such a blessing while we're traveling to have this schedule in place. And of course, it's not every single day the same exact time. I mean, if we're out and we're doing something, we stay flexible in that regard as well. And because Beau is learning from this sleep training, he can fall asleep if we're out walking around, or he can fall asleep if we're in the car during his nap time.

25:55So it has really opened up a lot of doors for us. And I just encourage anyone who does kind of have that thought or that feeling that schedules don't allow flexibility or that schedules stifle creativity to really think about the ways in which a schedule can actually give you so much more of those things. Kate, thank you as always for dropping those value bombs and Fire Nation. Until next month, keep your fire burning.