September 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 Latinx Empower. Today is the income report for September of 2024. And wow, do we have some value to deliver to you. Of course, we have a tax tip. We're going to be going over the difference between good and bad debts. We're also going to be talking about a legal tip. It's about term sheets for buyers and sellers when it comes to businesses. So selling and buying a business. We're going to about the interview of the month, our time in San Diego, traveling, which was quite the blast, some cool pictures as always.

0:43Bo is such a poser, I'll tell you. We took him to the desert. We also went to Inbound in Boston, which is HubSpot's annual conference, which is so fun and fantastic. Some updates from that and oh, so much more. And of course, we'll be diving into everything as soon as we get back from thanking our sponsors. The Next Wave, your chief AI officer, hosted by Matt Wolf and Nathan Lands is brought to you by the HubSpot Podcast Network, the audio destination for business professionals. Matt and Nathan are leading AI creators in your guiding light in the AI and technology frontier. AI technology is transforming the way we do business and the media landscape is fragmented.

1:20The Next Wave strives to be the leading podcast on AI technology and how you can apply it to growing your business. Listen to The Next Wave wherever you get your podcasts. All right, Fire Nation, we are back and ready to kick off this income report. The gross income for September of 2024 was$110 ,362. Our total expenses was$11 ,677 for a total net profit of$98 ,685. It is a negative$35 ,000 from August, but I will say the overall percentage of net profit overall revenue was 89%. So still a pretty good number right there. And as mentioned, we're going to talk with Ron and Mr. CPA on fire himself about September's tax tip, the difference between good and bad debt.

2:09Ron, take it away. Hello, John. And hello, Fire Nation. This is Ron Parisi with CPA on fire for your September 2024 tax and accounting tip. Hey, Fire Nation, always great to be with you. We have a pretty insightful topic for this month, and that's the concept of good versus bad debt. And I've been thinking about this lately, particularly you, Fire Nation, right?

2:41You're typically not a manufacturing manufacturing company or you have large assets, for the most part, you're digital online entrepreneurs. A lot of things you create are digital, right? They're not tangible. You go to a bank and you start talking about creating something digital, whether that's a course, a program, a marketing system, right? Banks don't, they don't really like that. There's nothing they can hold on to, right? My brother-in-law is a commercial lender. He calls it an airball. But there is good debt in the online entrepreneur community. And I want to talk about that, right? The first thing that I think about when I think good or bad debt is, is the debt helping you create a bigger, and I'll call it machine, right?

3:47A bigger machine, right? Whether that's, you know, creating, expanding your digital process, whether that's expanding, training your sales team, whether that's making strategic investments in your marketing campaigns, right? So, um, really what I think like, what I think about the business owner, you, right? And you think about whether it's good or bad debt, right? You have to be very careful, uh, about obviously taking on debt. It has to be done strategically. And if you know me, hey, you know about predicting, right? No rear view accounting. What that means is always forward looking, right? We always want to plan going forward.

4:35So when we take debt out, we have to know exactly what we're going to do with that debt, where are those investments going to be made, right? And this is the hard part as an entrepreneur or business owner. You have to predict the future, right? So if I take this$100 ,000, whatever it is, you know, debt, where am I going to invest it and what's going to be my return? And you need to really dial in those numbers as best as possible. And you need to have a plan, not only on how you're going to spend it, but also how you're going to pay it back. And there's got to be a certain return on that investment to make sense.

5:17And essentially that's, in a nutshell, what good debt is. OK, when I instantly think of bad debt, I think, hey, I'm going to go and I'm going to, you know, go out and just, you know, listen to my marketing agency. They need they told me I need to spend 30, 50 thousand dollars on this marketing campaign. I'm just going to throw it on my credit card and hope for the best. Right. Bad debt. Right. That's that's probably not a good idea. Right. What good debt that could be good debt if. Right. You have a campaign, right? You have some data on what that is going to return for you, right? And you also know, okay, this is, I'm selling my product for X.

6:00There's a profitability of Y, right? With that profit, you know, X percent is going to go to that service. The other is going to be used for, you know, the next version of my product or service, or that's profitability that I'm going to take off the table and utilize for my own personal investments, my own personal living, etc. But again, if I were to really see what the linchpin between good and bad debt, and that's, you know, one, it's an investment for expansion in the future, and two, is do I have a plan on how I'm going to spend it? What's going to be the return on those investments? And then how am I going to pay it back?

6:44So just really wanted to kind of take a quick, you know, journey down this debt road and know, you know, as a digital entrepreneur, right, it's very difficult to go to a bank and get money. It usually has to be done with, you know, like we talked about credit card, Stripe, PayPal loans, etc. But which, you know, are typically higher. You know, sometimes you can get a line of credit from a bank. But for the most part, you know, you have to go unconventional means, right, which means usually a higher interest rate. But on the flip side is you guys are in this business, right? Usually the returns are much higher than maybe a manufacturing company buying a large piece of machinery, right?

7:34The digital community usually has higher profit margins. And with higher profit margins, they're able to sustain a little higher interest rates and get a really nice return on their investments. It all has to be done strategically. So hopefully give you, Fire Nation, something to think about. As always, I'm Ron Parisi with CPA on Fire. We help seven, eight figure entrepreneurs with their financial operations. Always a pleasure being with you, Fire Nation. Thank you very much. No, thank you, Ron, for dropping value bombs and Fire Nation, cpaonfire.com, or just email Ron directly, ron at cpaonfire.com.

8:19Now let's talk with David Lizarbram. He has a legal tip for us, all about term sheets for buyers and sellers of businesses. David, take it away. 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 22 years, and I have loads of free content for business owners, entrepreneurs, et cetera, over at LizerbramLaw.com. That's my website. I'm David Lizerbram. You can Google me and you'll find me. This month's legal tip is all about term sheets. Whether you're an entrepreneur looking to sell your company or an investor aiming to acquire a business, understanding term sheets is essential.

9:01So let's do some definitions. A term sheet is a non-binding document that outlines the key terms and conditions of a proposed business deal. So it sort of serves as the blueprint for the more detailed legally binding agreements that will follow. Now, although term sheets are typically referred to as non-binding, Ivan did so about a second ago, some clauses in the term sheet may create legal obligations. So be sure you understand where those obligations may arise. That's where you may need an attorney to help. term sheets are crucial in setting expectations and aligning both parties on the fundamental aspects of the transaction before investing significant time and resources into due diligence and negotiations they help to identify potential deal breakers early on and they provide a framework for further discussion so some key elements that are typically found in a term sheet include the valuation and purchase price so this section would outline the agreed upon value of the business how the purchase price will be determined.

10:04Sometimes the price is fixed. Sometimes there's adjustments based on financial performance or something that happens in due diligence when you're looking into the business, et cetera. The deal structure. Is it an asset sale? Are you just buying or selling the assets, a little piece of the business? Or is it a sale of stock or ownership of an LLC, meaning the entire company is changing hands? There's different implications. There are different levels of complexity. and this also affects whether the buyer is assuming the company's liabilities or if they're remaining with the seller. Again, sometimes people get into this like, I'm going to buy a business or I'm going to sell a business and they may not think about these details at this point and this is really where you need to start hashing it out to make sure everybody's on the same page.

10:47Payment terms. It's pretty clear. Details how and when the purchase price will be paid. Very easy if that's just upfront cash, but sometimes there's deferred payments, earnouts, combination of these, etc. Financing. If the buyer is seeking financing, then the term sheet may outline the expected sources of funds and any contingencies related to securing that financing, meaning in order to get the financing, the seller needs to provide X, Y, and Z, and it needs to be satisfactory, something like that. Due diligence. This section typically specifies the scope and duration of the due diligence process, that's the time when the buyer will investigate various aspects of the business.

11:28Typically, again, there's a time limit on this, and sometimes sellers and buyers will agree to limit the scope of due diligence for various reasons. Exclusivity. So often, buyers will request an exclusivity period or a no-shop clause during which the seller agrees not to entertain other offers or to put it up for sale or take that kind of action. This is something you really need to carefully consider, because especially if you're the seller, it'll lock you up, and if the buyer doesn't come through, you haven't been able to sell your business. If you're the buyer, you want to make sure that you have some time to go through the process, so it's a complicated negotiation.

12:04Conditions to closing. These are the requirements that must be met before the deal can be finalized. Sometimes you need government approval. Sometimes you need key employees to sign on or financial targets to achieve, things like that. representations and warranties you know usually this is the kind of thing that gets more detailed in the final full agreement but if there are some key representations and warranties like you know there's no litigation that could adversely affect the company something like that you want to make sure that's in there indemnification again it's going to be worked out in detail in the final asset purchase or business purchase documents but this can be a high level overview of how potential future claims or liabilities will be handled confidentiality this is very important terms regarding the disclosure of sensitive information exchange during the process are typically included if you're the seller and you open up your books and you show you know all the nitty-gritty the good and bad of your business you don't necessarily want that person to tell everybody about it so you want to make sure that the confidentiality terms are very clear employee matters again this might cover retention of key employees What if those employees have stock options or ownership pieces or something like that?

13:16If there are planned changes to the organizational structure, that's where this would be addressed. Governing law. So now we're going to see, you know, which state's laws govern the interpretation of the agreement. So in case there's a dispute about the term sheet or something that comes up, we want to know where and how that dispute is going to be resolved. So if you're selling your business, it's crucial to strike a balance between providing enough detail here at this stage to move the process forward and to maintain flexibility for negotiations. You want to be cautious about granting, again, long exclusivity periods or agreeing to onerous terms that could hinder you from exploring other options.

13:54If you're a buyer, the term sheet's an opportunity to sort of clearly articulate your vision for the deal and to set the stage for a smooth transaction. But, you know, it's a negotiation. there could be pushback on some of the terms that could be perceived as too friendly to your side. And remember, while term sheets mostly non-binding and people throw that term around, oh, let's sign a non-binding term sheet, you know, there's going to be clauses often like confidentiality, exclusivity, et cetera, that may be legally binding. And the whole document sets the tone for the entire transaction. So, you know, you don't want to just, you know, grab something off the Internet or just quickly sign what's ever put in front of you.

14:30You want to really take some time to be careful with this because it's an essential part of the process. You want to approach it with care. Consider seeking professional advice to ensure your interests are protected. Wrapping it up, you know, whether you're buying or selling a well-crafted term sheet can save time, it can reduce misunderstandings, and it can pave the way for a successful transaction. Of course, if you have questions about term sheets or need assistance in negotiating one or reviewing it, you can always contact me, David Lizerbram, and I'm always happy to talk with members of Fire Nation.

14:59and thanks a lot. And I'll talk to you next time. David, thank you so much for dropping those value, value, value bombs and Fire Nation. Of course, you can just Google David Lizabram, as he mentioned, to get in touch with him, products of the mind, give him an email, give him a shout, give him a call. He's here for you, Fire Nation. And we have a lot more coming your way when we get back from thanking our sponsors. Being a small business owner comes with a lot of challenges, especially now. It seems like everyone is working with smaller budgets, shorter timelines, and sky-high expectations, and that can make growing a business feel pretty painful.

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16:12And you've got HubSpot's all-on-one customer platform. Get ready for growth without the growing pains. Visit HubSpot.com slash Spotlight to see all the updates. All right, Fire Nation, we are back. And the interview of the month is with our good friend, Clay Clark. This guy's been a partner, a sponsor, just a great person for Fire Nation over the last, I want to say five years now. He just has a lot of great stuff going on. He always brings the heat, the energy, the value with his episodes. And this month we talked about how to scale your online or offline business. And we had some incredible value bombs.

16:48Without vision, people perish. We get into that. how you must measure what you treasure and you will slack where you do not track. And again, we get detailed into these things. We bring on a great guest that has used Clay's services and such a fun time and a fun conversation as always. So just go ahead to eofire.com, type Clay Clark in the search bar. You can look for the most recent episode and that one is this one and it's a great one and I highly recommend it. Now we're off to our month in San Diego. We spent 45 days in Maine, followed by 33 days in San Diego. So we're now going to talk about some of our time specifically there with the great Kate Lynn Dumas on the mic.

17:29Kate, how's it going? And let's talk about San Diego. What's up, Fire Nation? As always, amazing to be on the mic with you. And oh my goodness, how are we in Q4 already? Well, last we left off, we were wrapping up our time in Maine and headed to San Diego and we dove straight into life on the West Coast. We were at different playgrounds and parks. We were doing twice daily walks around the bay, visiting the new Children's Museum in downtown San Diego. If you're anywhere near that area, that Children's Museum is so incredible. We were hitting up pumpkin patches, crushing the San Diego Zoo. We were going to SeaWorld and that is just to name a few things.

18:16We definitely kept ourselves busy and spoiler alert, Beau absolutely loved it and so did we and we've got so many pictures to prove it. Beau has also, as you'll see in the pictures that I posted, done so many firsts over the past couple of months and I'm actually looking at one of the pictures at the pumpkin patch where he has this little side pose that he does where he looks like such a little model. It's hilarious. Definitely check out the photos over at eofire.com forward slash income 133. Bo is climbing up on stuff. He's standing with support. He started clapping. He's pointing at things. Oh my goodness.

19:05It feels like every day he does something brand new and it's so freaking exciting. I love it. So when we were in San Diego, we got an Airbnb and we were right on Sail Bay, which is just around the corner from where we used to live when we lived in San Diego. And being right on the boardwalk and steps from the sand was such a treat. And in addition to all the fun activities I just talked about, we also very much maximized time with our friends and our family. We hosted multiple what we called Bay Days, where we just put bags out. We had bottle bash. We had blankets and tents and we were swimming and we were paddle boarding and we did dinners.

19:46We had sleepovers with my sister and her family, which was super fun. My niece and my nephew, we got to watch them play softball and baseball. And you're probably thinking, how the heck did Bo do all of this? Well, Bo was very much along for the ride. He was such a champ when it came to traveling across multiple time zones coming from Maine. And we were changing spaces a lot too, as you heard in our previous income report. We did a week at the beach when we were in Maine. We were at John's parents' lake house. We also did a weekend. Where was our other weekend? I guess we did a weekend at the beach and then we did a weekend at one of his friends' place.

20:31And so we were hopping all over the place. And man, Bo is just like proving time and time again that he's up for whatever. which is amazing. And also in San Diego, we cannot forget, speaking of firsts, we had a lot of firsts on this trip. It was Beau's first camping trip to Joshua Tree. And that was so much fun. We had a group of, I don't know, 15 or 16 of us out there. We opted instead of tent camping to rent an RV. And that was a really cool experience. It was actually a company that drove the RV out to our campsite, parked it. We showed up, they gave us the keys. We got to stay in the RV for the weekend and then they came and picked it up.

21:14It was incredible. Such a efficient and seamless process. Again, speaking of first, we also left Beau for the weekend for the first time. He stayed with my sister for three days and John and I took off to Boston for HubSpot's inbound conference. And that was a complete blast. This was our third year in a row attending inbound by HubSpot and John has spoken all three years. And this event does not disappoint. It was such a great time. I didn't know how I was going to feel about leaving Bo, but it turns out being able to mentally check out for a little bit was much needed. And of course I miss him and I was thinking about him every second, but wow, I don't think I realized how quote unquote on I was all the time, 24 seven.

22:09So it was really nice to get on a plane and watch a show. And it was great to wake up in the morning and go do a workout and all of those things that before I became a parent, I guess I kind of took for granted being able to just go do them whenever I wanted. But yes, Inbound was great from the opening keynote where they talked about one of the newest offerings that HubSpot has, which is Breeze AI, which looks so incredible to the HubSpot Media Network live recording studio that they have set up in the, they do it at the Boston Convention Center. It's quite the setup. We had a bunch of fun mixers and dinners that we got to hang out with our fellow HubSpot creators.

22:53Got a cool picture hanging with some of the crew there over on our income report. Inbound was just a 10 out of 10. John rocked the stage with Alex Lieberman. He's the founder of Morning Brew, which is a daily newsletter that delivers quick and insightful updates about the business world. If you haven't checked that out, we have it linked up over on the income report. You definitely should. Alex is a really cool dude. It was fun to spend time with him and again, other creators in the network. And yeah, Inbound was just overall amazing. So that was kind of in the midst of our time in San Diego. So we went from Maine to San Diego to Boston to San Diego to Puerto Rico.

23:34Oh, it was an amazing trip. Also, I have linked up on the income report, eofire.com forward slash income133. You can listen to John and Alex's full chat. They, at the conference, they spoke live on stage and we publish it on Entrepreneurs on Fire recently. So you can check that out. They talked about how AI is impacting creators today, why newsletters are still incredibly powerful as a form of engagement and connection with your audience. And the top takeaway from myself, the higher the barrier, the lower the competition. okay whoo that was quite the uh rant from me about san diego boston inbound bow all the things john what did you think about our trip way to rock the mic kate and no no real updates besides what you shared i mean just love the fact that you know bow seems to be a pretty versatile and at this time at least anti-fragile human that can kind of adjust and pivot and really take on what we throw down at them.

24:37The event in Boston was great, meeting new friends, or I should say, hanging out with old friends and meeting new friends and all that, all the stuff in between. HubSpot just does a great job with events. You know, Maine was a 10, San Diego was a 10. It's just so great that we have these other places that we can go to because then it actually just makes me appreciate Puerto Rico even more because of the variety and, you know, coming back here and seeing just the beauty and the Caribbean and the greenery and all that stuff. And of course, Gus, who's here as well. So all of that was awesome. And Kate did a great job breaking everything down.

25:08So I will just move into September's income breakdown. Our product and service income was $108 ,000. We did, let's see, 17 freedom journals, 20 mastery journals, and three podcast journals. Podcasters Paradise brought in$4 ,000. Our podcast sponsorships was over 100K. our affiliate income was$2 ,360 for a total gross income of$110 ,362 our total expenses$11 ,677 we have them all listed out at eofire.com income133 so if you want to see what we're spending money on come check it out because we do go through these every now and then to make sure that we have everything that we need and we want and we believe has to be there to help our business move forward So if we think it's important, it may be of value to you.

25:59So that brought our total net profit for September in at$98 ,685. So by about$1 ,315 for the first time in 133 months, we did not have a net profit in the six figures. So man, we were close within about one and a half percent, but we didn't quite get there. So just raising our hand, recognizing that reality and hopefully diving in and doing a little bit better next month. And Kate's going to bring us home with the biggest lesson learned, the skill of being able to turn off. All right. This month, I realized that the skill of being able to turn off is so critical. I mean, I've known this before, but you know how sometimes you kind of have those life lessons or business lessons where you're like, ah, okay, this is very shining, very bright to me.

26:56And it did this month for sure. I thought of it because, of course, as entrepreneurs, it's easy to feel like we're always on. We have a lot of new ideas. There's always new software and platforms that we can try out. There's always more people to meet and relationships to grow and conferences to attend. But as we all know, this can be very exhausting. And I've never been one who does well under a lot of stress or feeling like I'm being pulled in a lot of different directions. So over the past 10 plus years, I've been very intentional about practicing the skill of turning off because I realized that when I always feel on, that's when I tend to feel that stress, that exhaustion, that overwhelm.

27:41And it's not only important on a day-to-day basis so you can focus on other things like yourself and your family and your household, you know, things outside of your business. But it's also important when it comes to having energy and inspiration to create new things in your business. Having the time and space to feel motivated and inspired, that is required too. So one of the best ways that I know how to do this is setting a sort of curfew for myself. and John and I have really been doing this since the very beginning that we started working together because it was very important to us to know that we were going to have time for us personally as a couple in addition to the relationship that we have working together and that's always a question that we get when people learn that we work together.

28:29It's like, how do you guys kind of shut that off so that you do have that time for yourselves? And it's just that. We've really set ourselves like a work curfew. And around 5 p.m., we start to shut things down. Our evening time is dedicated to spending time with each other, enjoying dinner together, spending time with Bo, being with our dog Gus, going for walks, going out with our friends when we're around them, spending time with our families. And this is very important to us. So we've always made it a point to make sure that we're doing that. Now, I know that it's not always easy to do 100 % of the time.

29:08Of course, there's exceptions. If you're working on a launch, maybe you're attending an event, you're certainly not going to say like, all right, guys, it's 5 p.m., got to go. Or like shutting down your launch early, you're going to go all in. And that's totally fine. There's going to be those moments, but just let it be the exception, not something that you're doing all the time. So setting this curfew has really been super helpful. And if you have someone that can hold you accountable, all the better. John and I have been able to hold one another accountable to this. And over the years, we've been lucky enough to even extend this time.