Rockin H 2015 Income Report – lessons learned

First off, I have to apologize for not writing much in 2015. There are a couple lame reasons for this but I will get to that below.

Something I have wanted to do for Rockin H readers is open up the “control center” so to speak and let you in on what happens when you are not looking. Here I will share with you a year end review of Rockin H Farm Toys and what I learned in 2015.

If you did not know Rockin H is my outlet for my love affair with custom harvesting. Custom harvesting involves a couple things that make me slightly aroused and grab my attention which are, combines, choppers, and trucks. Like many guys I work a day job and do Rockin H stuff on the weekends and evenings, lunch breaks, at the lake, early morning, late at night, in the car, visiting family, at work….yep I got it bad. But I love it.

Rockin H was formally organized as a business in 2012 and operates under Rockin H LLC formed in 2014. I did not keep good records until the 2013 fiscal year. Record keeping for this guy is not a strong suite and my records reflect that. For two years I had a Filipino virtual assistant keeping my books. I transitioned in 2015 to Merritt Book Keeping www.merrittbookkeeping.com as my needs changed and I could afford an American company. Merritt charges me $1.50 per transaction. That means, income, expenses, transfers etc all cost me a $1.50 each for Merritt staff to keep track of it for me.

Rockin H Specializes in custom harvesting models with an emphasis on 1/64 scale trucks. While associated machinery is important to harvesters and farmers alike, it is the trucks many of these people take great pride in. Thus, I build mostly replica trucks which is the biggest source of revenue for Rockin H. I do sell a modest amount of parts and miscellaneous items including my own brand of combine trailers. I have created other sources of income but the models are the bread and butter.

For the record, I am not a dealer for anything other than my own products and have no interest in becoming one. Affiliate…yes. Retail outlet…no.

Expenses: As I will mention throughout this post I have not itemized my expenses as well as I should. My primary goal is to report the income correct and pay my share of taxes. With time being my most valuable commodity, telling my bookkeepers to itemize things differently lands at the bottom of my to do list every time. Therefore I will give you generalities. These are approximate numbers.

  • I paid $3,000 to the Federal government in taxes for 2014. 10% of my gross income. I file a schedule C on our personal tax return.
  • $7,000 for model trucks to customize as well as parts
  • $1,800 in subcontracted labor
  • $2,500 in legal ad professional fees
  • $900 in bank/merchant fees
  • $1,141 in shipping fees
  • $500 in travel and auto
  • $800 web services
  • $500 meals and entertainment
  • $350 telephone and software
  • $900 office supplies and equipment
  • $211 Ebay listing/final value fees
  • $424 Paypal fees

That is more or less the big numbers and are about as accurate as I have indicated thus far. There are other things but as I mention below, my goal for 2016 is to be more precise with this. All I have to do is tell the bookkeeper to do it differently.

Here is the down and dirty for the last 3 years

Gross Income
201320142015
$10,815.50$30,569.70$22,745.44
Expenses
$15,173.72$24,451.35$17,093.65
Net Income
$-4,357.55$6,118.35$5,651.79

Here some broad generalities from when I started to where I am today.

  1. Again, I cannot tell you how many dollars I spent on specific things like trucks for customizing or 3D products for resale etc. That will be fixed in 2016. Have I mentioned I don’t like book keeping? Luckily I pay someone to do it.
  2. The net loss in 2013 was due to a bit of debt and spending money on inventory and basically not knowing what the hell I was doing. (Funny, I still feel that way most of the time)
  3. I have $3,000 in business debt I put on an aggressive repayment plan that will be paid in full by November 2016.
  4. The huge increase in income in 2014 is due to raising all my prices. I double and tripled the prices of custom work. And, I worked my butt off all year.  2014 was insane.
  5. 2015 showed a slight decrease in income because….I didn’t want to work as hard. I did not publish as many videos or write as much either. Sorry about that. But overall I was more profitable.

A couple other lessons I learned in 2015.

  1. I quit spending money on things that do not make money such as hiring people to edit videos. I was more selective on who and what I chose to have hired done. I experimented a lot in 2014 with Virtual Assistants which freed me up to do other things but the net effect was not growth in my business. This is my fault due to lack of focus…and being a bit impulsive.
  2. I chose not to pursue so many 3D projects. I love 3D printing and the absolute creativity that comes with it. But….I have found it is not very profitable unless I sell finished products. Rockin H is very specialized and the niche I serve does not have the high demand for grain beds and related items. So, I simply did not do much of this unless it was something I was very interested in such as the stake type grain bed.
  3. I LOVE www.fiverr.com and will continue spending money there. The freelancers I have hired there have freed up my time and are very inexpensive.
  4. Giving all my knowledge away via blog and videos has not hurt my business in any way. It has increased my business.
  5. During 2015 I have been transitioning to a teaching model of business. I have been teaching via www.rockinhtv.com and www.rockinhblog.com since I began but I have been focusing more on that aspect for a couple reasons; 1. I cannot produce all the cool models that people should have. If I can teach more people to build what they want they win. Plus there will always be a group of people that have no interest in building and are willing to pay for a model. 2. I like doing it, sharing knowledge is very gratifying. 3. Teaching is scaleable. Meaning, if I create a high quality lesson and sell it, I can sell it 1,000 times. Whereas, if I make a custom model and sell it, I can only sell it once. I intend to keep free content and offer premium services as the idea evolves.
  6. The ability to get custom decals on demand is still a mess and frustrates me greatly. I have received good decals from good people but most of my purchases have not had the wow factor I expect. IT’S 2016! Why can’t we get the absolute wow factor in water slide decals? Grrr.. I would love to solve this puzzle. In time.
  7. In late 2015 I made a goal to publish regularly again on the blog and Rockin H TV. I enjoy doing those things and helping people learn what they want to know.

What is up for 2016? Right now my goal is to continue doing customs but make enough to cover current expenses and get myself debt free again. Already there are 10 firm projects coming up that do not include all the people I have put off as I work on the present list.

A double header trailer is in the works. This is a combined project between Lazy F Customs and Rockin H. The replica will be a Befort Double Header trailer and will be sold in two options, Static open or Static closed. Stay tuned as this project is nearing completion.

Expect more tutorials and classes. One class I had planned to offer did not attract any interest so I let it die. This proved to be a good thing as I do not have the correct format to even teach the class as of this writing. My initial idea failed after a ton of work. My goal was to turn my digital video camera into a webcam and stream live to Google+ live hangouts. No worky….yet. I will relaunch that class after the Rockin H Model Building Summit at the end of February.

That is the long and short of it. 2015 surprised me. I deliberately worked less with only a modest decrease in income. All other numbers as far as youtube video views, Facebook likes, and website traffic increased. Plus I wrote and released my first eBook which was a hoot.

2016 is off to a strong start with cool projects and coming up and lots of new friends to be made.

If you have any questions regarding this report, please post them in the comment box. I am glad to share everything I know.

Cheers,

Eric