Transcription
And the worst year of my life was whenever I realized that I was making an obscene amount of money, or I had an obscene amount of money coming into my accounts every week, but I was not a profitable business.
Hey, it's Brock here with Rock Hill Farm. And today I want to tell you guys kind of a crazy story about how I went from being broke and desperate to building a business that made more money than I ever could have dreamed possible, to then losing everything in a very painful way and building again and building something better that is more sustainable and the lessons I've learned along the way.
If you guys have been following me for a long time, you've heard this story a few different times, but only pieces of it. I've never really told the whole thing and tried to share the lessons I learned from that process. Now, I think the best thing about YouTube is not the planned and produced videos, but when people share their real experiences without trying to sell anything or color their story to make themselves a hero or a guru in the story. In this story, I'm not the hero or the villain. I actually think mainly what you're going to hear when you listen to this is that this guy is a fool who got lucky. And I, that's how I feel about it. I don't, I feel like right now I live my perfect dream life. I mean, I just feel blessed beyond measure and I, I don't feel like I even deserve to live this life. So, I'm no expert on anything, but I do think I've made some mistakes that maybe other people could learn from if I share exactly what they were and the lessons I learned from that.
So, we're going to go all the way back. I started working in a factory while I was still in high school. I was working 11 pm to 7 am as a graveyard shift factory worker. I've got a job that paid pretty good. You know, it's hot, dirty job, working bad hours, 60, 70 hours a week, but I liked working like that. And one thing I knew for sure is that I wanted kids and a big family. And I wanted it right away, actually. So, my first son was born when I was 19 years old. And by the time I was 25, I had three children and I had taken on two stepdaughters. And so at 25 years old, I had five kids. And I'm still a factory worker. That job that seemed like a good paying job at 18 no longer felt like a good paying job at 25 with five kids and a mortgage and two car payments. So for the next decade, I just barely got by, just like most people I think, and made just enough money to pay the electric bill, pay the car payments, buy groceries. We didn't get to go on vacations. We didn't have fancy things. We, we just survived. So at this point the story, I'm like 35, 36 years old and have led a very ordinary life. This is where things get interesting, though. So my son played travel baseball and we traveled all over the place to go to these baseball tournaments and it was like my favorite thing in the world to go watch him play ball. The team had a problem that we needed a pitching mound for the pitchers to practice baseball on. And they were like, "Hey, you know, could you build us a pitching mound?" Like, "Yeah, I could do that." So I looked up all the available options for that and there really wasn't anything that was easily transported. And this was like 10 years ago. The only thing you could find if you looked up portable pitching mounds on the internet was something that was really big. It folded in half and it took two people to carry it. You couldn't put it in your vehicle. I thought, "Well, I can do better than that." So, I built a portable pitching mound that folded in two places and had wheels and a handle. It was like a suitcase you rolled behind you. One person could pick it up and put it into a vehicle. And we built one for the team. And I posted it on a Facebook group. But when I posted that on that baseball Facebook group, I got like a hundred comments and 30 private messages that said, "I would buy that from you."
And I was working a job I hated, terrible hours for actually the least money I'd ever made in my life. I think this was maybe 10 years ago, and I was making like $13 an hour at a factory that printed fast food wrappers. And it's a long story how I downgraded jobs, but I did. And I wasn't making any money. We were just barely like, just surviving. It's always a day late and a dollar short. And there that is just personal shortcoming. There's always a way to make smarter choices and do better in life. And I just didn't do it. But I'm just a regular guy with regular problems. Now, I've got this product that I built and a lot of people want it. I said, "What if I made a lot of these?" 30 days later, I had a website that I created. Not obviously, I didn't know how to make a website, but I had a website that I created and I had shipped like 10 of these around the country and I was shocked by the demand. And at that point, I said, "I'm gonna go all in on this thing and change my life." And I did. It was the most remarkable thing. It feels like something out of a movie that I can't believe it actually happened. Over the course of the next six years, I sold millions and millions of dollars of fold-up rollaway portable pitching mounds. And you've probably at this point, if you've got kids who played sports, you have seen my product. Now, today I don't make that product. Other people are making the exact product that I came up with. I never got a patent on it. And I shut the business down and other people make the same thing. So cool. What this is the crazy thing. I could not possibly be more prouder of what I did with turning that idea into the business it was. I think we sold 14,000 portable pitching mounds with an average price of like $400 a piece. We sold them to multiple MLB players. It was just incredible. And 99% of the people who bought a product from me loved it. And there were actually people who complained I didn't charge enough. And that's where the real mistake started. And you know, a lot of times I feel like in my videos I tell a clean story from A to B. And I can't do that with this. It's because it's still an emotional thing that I'm not fully detached from. Let me try to go back and tell this story in an order that's relevant to you guys.
I started selling this, making this product and selling it. And I was already working 70 hours a week, 60 hours a week, and it would take me like three hours to build one of these. And I'd get a $100 profit from it. And so I'm like, "Wow, I'm making like $30 an hour, and I'm making what, 13 to 15, whatever it was at the job. I don't even remember what I was making exactly, but I'm making twice as much making these things." And I'm sitting there doing math like, "How many of these would I have to make to replace my job?" And then I'm almost discounting the fact that I've got health insurance, retirement plan, dental insurance, working workers' compensation, short-term disability, all these protections and benefits that you get from an employer. I'm just going like, "How many of these would I have to make and could I sell that many?" And in like 10 months after making the first one, I had quit my job and I was making these things full-time all day every day. And it continued to scale the fact that I just had a little area in my basement where I could make these things. And this is where the mistake started that that was just a little boost in income. But the numbers worked out something like I needed to make 30 of these things or 20 or 30 of these things a week and sell that many to make an income. But working my job, I could really only do 10 or 15 because there's only so many hours in a day. So there's a gap there. What do you do? And there's a lot of better ways, but what I did was quit my job before I was selling enough of them.
So the next phase of this is I quit my job and I hit a sales boom. I started doing Facebook advertising and that went kind of crazy, that sales blew up and I said, "I can't build all these." So what's the logical next step? If I can sell a product that is profitable but I can't build them myself, you hire employees. And there could have been other paths I could have taken, but I didn't. I hired people that I knew to come to my house and build these in my basement and things just kept scaling and kept scaling and my website became the first search result or top three search result on Google for portable pitching mounds and I'm just blown away, you know, by the success I'm having. But how many of these products can you build in your basement? Each one's made out of a full sheet of plywood and the process of cutting that sheet of plywood into a hundred parts and then assembling it and it was, it's an in-depth process to build these things. Said, how big can I grow this company working out of my basement? So I said, "I need a commercial property." Well, I'm still just surviving, you know, I'm making profit from selling these pitching mounds. I've given up my health insurance. Now I have problems of like, the business needs liability insurance. The business needs taxes. I just took on employees and I don't know how to get benefits for them. Even the most basic thing, do I 1099 them? Is there any way we can get a group insurance policy? How do I ask these people to work for me full-time but not have benefits? So now you look at it and you say, "Wow, this product cost me $100 to make and I can sell it for 200. I'm providing this tremendous value to a customer, but not if I need insurance. I have to save for taxes. I have employees that need fair compensation and benefits. And these employees are human beings with families too. Like, how do I provide real income for these people?" And the answer is the product has to become way more expensive. But I had a problem with that because my, at that time I would have said, "What are you most proud of in your life?" It's that I am a father to these children and that I am selling a great product at an affordable price. And I really struggled to raise the price even when I had customers tell me I wasn't charging enough. So that is the first lesson that I would impart to someone who's watching is that if you're going to go into business and you have a product to sell, you have to do what you hate from other businesses and you have to charge a huge markup. And so in my current job as a YouTuber, I'm always showing products and I always get the same comment. "That's ridiculous. That's $30 of steel and they're charging $300." Yes, you are right. But you don't understand what it is like to be a small business manufacturing a product and all of the hoops you have to go through.
In my business, I thought everything was humming. And this is later in the story, but I thought I was just crushing life. And then I, I was selling my products on Amazon and I got an email from Amazon that said, "You have to purchase this liability insurance policy so that if someone sues you, you're covered." And I thought, "Okay, no big deal." I go to get that policy. It's like a $9,000 policy that had to be paid cash upfront. And that is one example of unexpected expenses that just show up out of nowhere. Now, every, that's $9,000 a year. How many products am I selling? How much money per product sold goes directly to the Amazon insurance policy? It is a significant amount of money for something that I never would have calculated the need for.
So, let's get back to our timeline here. I've got a few employees and we're like sardines on top of each other in my little basement trying to build this product that needs a full-scale assembly line to do it efficiently. So I said, "I need a commercial building." So I started going looking. Yeah, I can buy a commercial building for, you know, $150,000 and then have all these other insurances, double liabilities, double insurance on the property, utilities on the property, taxes on the property, double my product price again. It was crazy. And instead of doing that, I bought 20 acres in the country with a shop big enough that I could build my product in. And I think that was a great decision. But it came with all kinds of other problems. Number one, the mortgage on this property, it was like five or six times the mortgage on the house in town. Scariest thing I've ever done in my life was buy this piece of property. And as I go through this progress, as I go through this process, what you, what happens to a small business owner is you're wearing a lot of hats. I am the guy who makes the product. I'm the guy who keeps track of inventory. I'm the guy who does customer service before and after purchase. I'm the guy who does marketing. I am, you are everything to everyone within your business. You have to do everything. And I did not know how to be that guy. I did not know how to run that business. And there comes a point in the process when all these extra costs have driven up the price of your product to a ridiculous level to remain profitable. And what you need is to hire an accountant. That's the most important thing I could have done. Hire a marketing person. Hire this. Hire that. I, I didn't know how. I was scared to do it. I've already got all these expenses. I needed to be able to move bulk material. I needed to be able to transport all this plywood that we were buying, which required a tractor that I bought to move freight around. Now I have a tractor payment. I needed a bigger truck. Now I have a truck payment. I bought a trailer on credit. All of these costs. All of this is debt that the business is taking on that goes into the profitability. And I don't have an accountant. I'm just winging it. And so as I tell all this, you know, at this point when we moved here, we had months where we would do a hundred, $150,000 in revenue. And I'm a factory worker who didn't go to college. How am I supposed to know how to manage $150,000 of income a month? And it was like a, a hundred thousand of the $150,000? These are just ballpark numbers. I bring in $150,000. Say $100,000 went just on cost of goods to manufacture the product we sold. My margin was never what it was supposed to be. And within the process of all of this, the companies that processed my money came to me and said, "Hey, we see you're selling a lot of stuff. We can front you capital and then you will repay us with a percentage of sales." And if you've never looked into those types of loans, they are essentially like the buy here, pay here vehicle or payday cash advances that trap poor people into a debt cycle that they will never escape. Those exist for businesses. And I borrowed money off of future profits at insane interest rates. You're paying, you're borrowing $50,000 and repaying a hundred or 80,000 like insane rates. But it was at points where I said, "I, I've got payroll due and we need materials or we are out of business. I've got a shipping bill. I've got all this stuff and I was unqualified to run this business and I took out these loans that guaranteed a percentage of my future profits went to the product, went to the pay, repay the loan." And at that point, this is no longer a profitable business. And the worst year of my life was whenever I realized that I was making an obscene amount of money, or I had an obscene amount of money coming into my accounts every week, but I was not a profitable business.
And this point happened where I said, "This business needs to die or be run by someone more qualified. I had a product that was easy to sell that people loved, but it wasn't a profitable business." And I said, "This business probably needs to die. I should shut this business down." But you cannot shut down a business if you have all of this debt. You say, "I've got payments on all the equipment I'm using. I've got the payment on the no job I'm qualified to do will pay the mortgage on this property, so I can't go out of business." To go out of business means I have to allow my home to be foreclosed on. I have to let my vehicles be repossessed. I'm going to have to file bankruptcy, go back to being a factory worker, and then if all that happens, I will have hundreds of thousands of dollars of collections coming after me for the vehicles not worth what I owed. You know, all these loans don't just go away because I go out of business. And if I had an accountant and a lawyer, maybe there was an exit plan. But the worst year of my life was trying to survive in a business that was not profitable and had debt, large amounts of debt. And it's just terrifying to say. And so at this point, you know, this is an oversimplification. There, this is happening over years and I'm trying all different things. Raise prices, raise prices, low, try. This is my new plan to reduce our cost to manufacture. Can we do this? We came up with auxiliary products. I had affiliate products that I sold on my website. Increase revenue, increase profitability, raise prices, negotiate shipping contracts, trying to find ways to be more profitable, but all my profit was going into paying off debt. And, um, I was in this cycle that I couldn't escape. And I, I was scared to death and I didn't know what to do.
So what did I do? I started a YouTube channel about tractors. Kind of crazy, right? So at that time sometimes I would go up in the shop, you know, I would do customer service, I would do inventory, I would order stuff, do all the administrative stuff that I did every day, and then I would go in the shop for a couple hours and build the product. Now, I was paying someone like $12 an hour to build this product. And I was standing in there making $12 an hour. And I'm listening to all these YouTube videos about business advice and things. And they said, "Don't spend your time doing $12 an hour tasks. Your time should be spent finding ways to make the business more profitable." And I decided, you know what? I need an exit strategy that builds a separate line of income. And what I actually thought is I knew that there are people making real money on YouTube. I said, "If I could build that business, I could use the profits from this new successful business to feed my other business, pay off the debt on my other business." And that was my thought that on YouTube I could make $1,000 or a couple thousand dollars a month here and there and use that to pay off the debt on my other business. And in that time I was doing other things. I worked a part-time job once. I, I tried everything. I was doing lawn care. Me and my son would go out in the evenings and try to make extra money. I, I was trying everything over the course of years. I'd have a period where I tried this and, um, I decided to start this YouTube channel. And a crazy thing happened when I was at the point where I said, "I've done everything I can do to save this business and I don't know what to do next." And I was scared and I was desperate. And all of a sudden, people started watching my YouTube videos. And before we even go into YouTube, I just want to say like, if you're watching this, you're listening to this and you're like, "Well, this guy's just an idiot. He messed up his business." You're right, man. I just messed up because I didn't know what I was doing. And I got myself in this terrible situation where I was afraid of all these collections that I couldn't pay and everything. And so, I started making YouTube videos. I'd work on my business all day and then I'd come out here in the evening and I'd record a YouTube video and people started watching them and then I had a single video go viral and I made $10,000 in a month with no debt, no liabilities, no obligations, $10,000 from social media that I got paid to talk to this camera. And I said, "This is it. This is the answer." And so I started really pouring all my energy into YouTube and I said, "I think that business might die." But I had a great guy who was up there managing the day-to-day. He was my number one employee. He kind of made sure everything worked. I said, "I'm going to pour myself into YouTube and see if it can make enough money to save this other business and keep my employees employed." And I started making real money on YouTube. And I was pouring all the money into the debt on that business. And it wasn't enough because this was a, a business, this YouTube business, it wasn't always $10,000. I, I that was a good month that I had that made me think, "Wow, this is real income potential." I started taking all my YouTube money and putting it on into trying to save the other business and it wasn't working. Because the YouTube money was like the money you would earn from a job. It was like a $60,000 or something that I made in a year from this. And that was a business that was bringing in a million and not profitable and throwing $60,000 at it was not saving it. And yeah, I still had to live. I still had to pay my mortgage. I had to buy groceries. And you all the things, right? I still had to have money to live on. So there came a point where I just was, I could not do anything with that debt on that business and I had to shut it down. And that leads me to where we are now. I shut that business down almost maybe three years ago, maybe over three years ago. And since then, when I shut it down, it was messy and it was scary. I've never been so scared in my life as shutting that down with all the debt. And now I have this really profitable YouTube channel. And people ask me all the time like, because I, I will tell people that I'm making a lot of money on YouTube and they're like, "Oh, you're rich now." No, not at all. First, I'm not making that much money. I make pretty good money making YouTube videos, but all that debt still exists. And so all the money I make from YouTube, I filter out into repaying all those old debts. And it's been a painful process over the last three years to try to pay off my debts with this YouTube channel.
So there are lessons in there. And that is if you start a small business, do everything in your power not to sign away your profits to debt. And don't be afraid to charge what you're worth. And part of this in there, my, as my business struggled, it was during COVID. We, we started off paying like $30 a sheet for plywood, and I found ways to get it for 20, buying in bulk from like resellers and different ways to get this plywood for $20 a sheet. And then that all dried up. And during COVID, plywood was like $85 or $90 a sheet. A $20 cost of doing business went to 90. And that was amplified throughout the whole business. COVID was rough. And I did get COVID loans that everyone heard about those COVID loans, but I have to pay those back. I'm paying those back today. So those are the lessons in there is that if you're going to start a business, so first I would say it's still worth it to take the jump, but learn from my mistakes and understand that there's going to be all these cost inflations that happen as you grow a business and be prepared for those and put those into your pricing because if you can't sell at a price that is going to later absorb the cost of your expansion, then you don't have a business. Sometimes you have a great product, but it's not a business. If the cost you have to make to be profitable on this business is enough that the price of the product now gets to a point that you can't generate sales, then it can be a great product, but that doesn't make it a business. So maybe I never had a business. Or maybe it could have been a profitable business if I just knew how to run it. If I just knew how to price it right, hire an accountant, hire a marketing person, and get help. Maybe it could have been the best thing ever and I learned a lot and I, I could do it better now, but I didn't know how back then.
So, from this part of the story, if I had advice, don't underestimate what you can accomplish because I accomplished some amazing things. But also, if you're going to try to start something like this, get help. Get a mentor. Invest in learning how to do it the right way. Watch videos. Find a real-life mentor. Take a program. Do whatever it takes to learn. And above all else, don't take on debt if you have any option whatsoever. When I talk about debt in my videos, people are like, "Dave Ramsey's an idiot. He doesn't understand that debt is the way that rich people leverage their money. And if you borrow money at 5% and you make 12% on it, it's just free money. And the bank is just paying you. Your loan is paying you twice as much. And only an idiot doesn't use all these advanced tools." Mathematically, that's accurate. Dave Ramsey has always said that mathematically his program doesn't make sense. But you cannot put a price tag on the peace of mind gained from not owing people money. And the security of what if COVID happens, what if there's an economic crisis? What if a competitor comes along with a version of your product? What if anything? There is no replacement for living without that debt. And the mental benefits of I was a, I was a wreck for a long time because I spent all my time in fear of bankruptcy and telling my children and my my wife that we'd lost everything and we had to move back and rent a little house in town so I could be a factory worker again. All of that was the price of borrowing money and scaling too fast.
So, I hit rock bottom shutting my business down. But just at the right time, I found a replacement. The success of this YouTube channel is a miracle. I have no idea why it happened and how it happened. And I don't deserve it. What I deserve is to be bankrupt and lose everything and fail and start over. And somehow that didn't happen. I don't understand it. Somehow this YouTube channel became profitable enough that I can put all that debt onto payment plans and work through it and maybe have a five-year plan to say I can become debt-free. And I still made mistakes after starting the YouTube channel before closing down the other business. I thought YouTube is saving me. I'm making this money from YouTube. And if I had fancier equipment, I could be more profitable on YouTube. But I'm making $10,000 a month on YouTube. I can buy a skid steer with a 13, $1,500 payment and that's only 15% of what the YouTube channel's paying. And I thought if I buy a skid steer, I will double my YouTube revenue and I can use the skid steer to make money. And that was taking on debt again. I had not learned my lesson at that point. Couple years ago, I learned that lesson finally the hard way and I don't borrow money anymore. Been really hard to have that to learn that lesson for me. It's easy to mentally understand it. Anyone can say it. It makes perfect sense. But actually doing it in practice has been hard for me to learn and I'm finally there that I won't borrow money. And you guys see me showing off all kinds of fancy new equipment, but I don't spend money on anything. I catch a lot of flack because I haven't finished my woodshed. It's $300 of metal I have to buy. $500 of metal. I don't know what it cost. I'm not willing to buy that metal because I need to pay off my loans. And so it's always a choice like, do I go to these expos? The expos grow my channel, help me make more money, but I have to invest in the hotel room and the travel and all these things, or it will cost me money to build a log cabin, but it's good for the channel. I, I would like to have it, but why am I spending money on something that I don't have to? So, I've learned a lesson of now to try to be frugal with my money. I try really, really hard to do that. And, you know, I'm never gonna be perfect, but I've learned that debt is the biggest noose you can hang on yourself and carry around with you every day.
So, I'm trying. But the second thing, man, I, so there's a lot of talk about my negativity and failure here, but I've also learned the miraculous ability to make money on the internet with simple products and by just being yourself and sharing it with an audience. It's remarkable. It's truly remarkable. And so today, I make a nice six-figure income from making YouTube videos. And I'm, that's a blessing beyond words. And I just want to say thank you to everyone who's ever watched one of my videos. It's, you have saved me from someone who went bankrupt in another business. But your viewership has allowed me to keep my family on this amazing property. And there's nothing that can repay that. So I'm eternally grateful to the people who watch my videos.
So if you're watching this and you're saying, "Man, I'd like to be a YouTuber and make six figures." First thing I'll say is it's really hard. Okay, I feel like I got lucky. I don't know how it happened, but I will tell you a couple things. Number one, I'm probably work at it harder than anyone you've ever seen on YouTube that I have published almost 2,000 long-form videos in the last 5 years. Each video takes like eight hours to make. This video only I can make this in two hours, but a lot of videos are 12 hours to make. I live, breathe, eat, and sleep YouTube. And the only way to be successful at anything is to give it a 100% effort. If you kind of have a YouTube channel, you will kind of be successful. If you put every ounce of your effort into it, it might work. And even then, it's not guaranteed. So, a lot of times, you get back from life what you put into it. And if you kind of start a small business, you'll kind of be successful. I went all in and made mistakes, but I jumped without a parachute and I ended up landing somewhere that I'm very happy. And so, if you want to make a YouTube channel, your your life and your business, I'm going to try to give you some advice here is number one, you have to do it with your whole heart and you can't hold anything back. And that means in my case, look, people do it all different ways. Just all I can say is what's worked for me is being uncomfortably honest with the audience and then trying harder than everybody else. That's my secret to success.
My number one takeaway that I've learned through a few crazy years is just making more money does not mean you have to spend more. If I had kept my cost of living where it was, I could be hugely successful now instead of just trying to dig myself out of debt now. So that's it. That is my story. I hope that you gained some value from it. Leave me a comment. You can be polite if you want it. It there's nothing wrong with that. But I appreciate you taking time to watch. I'll put links on the screen to a couple more of our videos and I'll see you next.