Different Supply Voltages on PCB

Hey guys,

Im designing a simple PCB with an ATmega328P to switch some fans on and off through a MOSFET.
I need 5v for the IC and 12V for the fans, not huge power from rough calculations about 1A on the 12V side and roughly 1A on the 5V side.

I was planning on using a 12V SMPS into a 7805, and tapping off the 12V incoming but I’ve been told that’s not a good idea as it will get too hot.
What are my other options? Hoping to keep this as compact as possible.

Cheers guys!