Month: January 2021

So I made a few phone calls today. Couldn’t get anyone at Penske to answer the phone so I decided to try later and call the railroad company. I was told the driver had to be on the approved list so I inquired as to how to do that. Wow! So this is a CSX approved driver list. This is a whole transportation thing. The shipping container is owned by Hapag-Lloyd. The chassis (container trailer) is owned by another company which may or may not be the railroad company. So in order for all these things to be used interchangeably and transported to and left in other states or even countries the owners of these assets have to be able to track their location. But for a trucking company to move a container they have to provide proof of insurance to the owner of the container as well as proof to the owner of the chassis. That’s what this system is. Any trucking, railroad, or container ship company registers their company, drivers, and most importantly insurance information with this system. So, I’d need to get a DOT number for my company, trucking insurance for my company, and pay for the annual fee in order to pickup the container myself. So I’ll have to hire a trucking company that’s already registered to transport the contafrom the rail yard to the workshop.

When you purchase a fixed asset for a company like a rope machine it isn’t considered an expense. The company had $24,000 in cash then it had $12,000 in cash and $12,000 in equipment. The company is worth $24,000 either way. But equipment loses value over time. As the machine is used it starts to wear and it can’t be sold for as much as it was purchased for. That’s called depreciation. In that charts above are the depreciation classes and schedules for the rope machine. Each year over 7 years I get to depreciate the machine as an expense to the company. The first year (this year) I can depreciate 25% of the total cost to purchase and setup the machine. That includes things like transportation costs, installation costs, and materials needed to make the machine operational. This means for this year whatever profits the company makes is already going to decrease by at least $3000. Since the company isn’t projected to make much profit this year and has to retain all of its earnings to afford a shipment of yarn, this reduces the tax liability of whatever profit would have been realized.

To explain. If the company sells $13,000 in rope this year and has $3000 in expenses then the profit would be $10,000. So the company owners would need to pay taxes for that $10,000. 5% owners would have to pay taxes for $500 which is about $130. But the company cannot distribute any of the profit to the owners since it has to save for yarn. This means each owner is responsible to pay taxes even though none of them collected any money from the business. It’s called phantom income. So through depreciation of the machine the profit is actually only $7000 ($13,000 – $3000 [expenses] – $3000[depreciation]). This reduces the amount of phantom income each owner is responsible for.

This along with the current cash on hand should be enough to purchase yarn which will be about $20,000 with shipping. However, once the machine is operational I may take out a loan to purchase the yarn since it will take at least 6 months to receive the order after payment is sent. This means the company may run out of yarn before the shipment arrives if we wait until we save enough money prior to placing the order. Currently there is only enough yarn in inventory to produce about $8000 in rope. A loan allows us to order sooner and hopefully receive the yarn shipment before the current inventory is depleted. The loan should be repaid rather quickly once the new yarn arrives. With a healthy inventory of yarn and the ability to produce rope much faster we should be able to keep enough rope in stock to allow for an ad campaign and the sales increase it will bring. I’ve held off on direct advertising because I am currently unable to meet the demand that would generate.

I did some pricing for forklifts today. The plan was to built a couple if stands to rest one end of the machine on while I reposition the forklift to lift it out of the container and onto the ground. One place had forklifts for $285 / day and another for $226 / day. But both charge $140 each way for delivery. That doubles the cost. With all the fees and taxes I was quoted $744 and $586 to rent a forklift for a day if I have it delivered. I literally need a forklift for 20 or 30 minutes! Thats like $20 to $25 per minute! I could probably rent a trailer to go pick up a forklift for less than their delivery charge. I mean I’m renting a semi anyway. But honestly the forklift plan just isn’t feasible at those rates. So I need another plan. Oh joy!

Stopped by the garage today to do some stapling since I forgot to take the stapler the other day. I so enjoy stapling above my head. But the workshop is starting to look pretty good. As they said the other day when we spoke, the property owners removed a bunch of stuff from the space. While we were talking the other day they asked how I was going to get the machine in the garage. I explained the plan and mentioned I had explored several options including using a flatbed tow truck. They actually know someone with a flatbed tow truck and gave me his number just in case. Well after the disappointing forklift costs I sent him a text today to get an idea of if he could do it and how much. So he was like just to take it out of the trailer and put it on the ground is $50 which is the minimum he charges for a run. FIFTY BUCKS! Seriously? I mean I’ve spent months now trying to figure out how to get the machine out of the container without hiring a tow truck and it’s only fifty bucks! So my original concerns were trying to find someone that would do it and do it without charging me $500 and of course how to do the scheduling. I mean I can’t ask the tow truck to wait indefinitely for the semi to arrive and I can’t ask the semi to wait indefinitely for the tow truck to arrive. But since I’m the semi driver now all those problems go away since I can tell him exactly when I’ll be there and I can wait for hours if needed.

So my offload expense went from $744+ this morning to $50 this afternoon. Now I need to call Penske and find out what they’ll need in order for me to rent a truck from them and call CSX and get my information added to their driver registry. I wonder which one of those will be the next problem.

So most of the ceiling in the workshop is insulated. I ran out of insulation today before I finished. Talked to the property owners today and let them know the machine was coming soon and they said they would get the rest of the stuff out of the garage. Clearly there will be more left in there than I had expected but it shouldn’t affect the operation of the machine.

Been having trouble coming up with an adapter for the generator exhaust. I need to route the exhaust through a muffler and then outside so it’ll be quieter an I won’t die from CO poisoning. I should able to start building the enclosure soon. Just realithat I forgot to buy soundproofing compound at Menard’s during the 15% off sale. Why in the World didn’t I remember to put that on my list or buy it. Literally bought screws for the bag sale! Ugh, what’s 15% off of $75? Like 10 bucks? The whole time at the store I kept thinking there was something else. Would have been really nice if the 11% rebate from November had gotten here before now.

So I performed a year end inventory on the yarn, rope, pins, shipping supplies, and whatnot. This gets subtracted from the starting inventory to give a cost of the items sold. This is an expense. If I purchase any inventory item it is an asset untilit is used then its an expense. I started the taxes but the IRS doesn’t have all the forms ready so I can’t file until at the earliest January 28th when the forms are supposed to be ready. Ummm, why can’t the IRS have the forms ready by the first of the year? Then I say on Facebook today that the IRS has postponed tax season to start on February 12th but taxes are still due on April 15th. Ummm, it’s okay for you to be late but not okay for the rest of us to be late?

Anyhow, I’ll get the K-1’s out as soon as I can file.

So I’ve been trying to contact various sources regarding many aspects of getting the machine here and operational. I found a super for spools but noticed that the hole for them is smaller than the spindles on the machine. Turns out that the factory made my machine assuming I would use cardboard spools. Ummm, why not use spindles that can handle cardboard or nylon spools? I can get spinthat will fit for $200 plus shipping. Okay, so it’ll be cheaper to have them made locally because the shipping will be expensive. Then the spool maker didn’t want to talk then said they weren’t sure how much shipping would be. A hundred spools would cost $500 and the shipping would be at least $500. So I’m back to just making my own spools…

I sent an email to the freight forwarder asking what the address was for the rail yard the machine was going to and they said they would update my contact inland send me an A/N (arrival notice) when available. So not at all helpful.

At some point I saw the zip code for the rail yard which is the yard in Avon. Actually, the zip code is for Clermont but the rail yard is has the same zip but is surrounded by the Avon zip. Anyhow I sent an email to to the CSX Intermodal Office in Avon to ask about pick up procedures. They responded and clearly answered most of my questions and told me how to proceed! OMG,THANK YOU! So I had hoped that I could maybe hire a flatbed tow truck or a hauler with a piggyback forklift to simply meet me at the yard and pull the machine out and load it on their truck then take it to the workshop and set it on the ground for me but I was told the container had to be taken off site to be unloaded. I also considered renting a flatbed truck and having the container loaded on it and then use the lift gate and a forklift to get it on the ground but a flatbed truck is $240 per day and $0.38 per mile and the yard willcharfe a $50 lift fee to put the container on the truck. The container will already be on a chassis (container trailer) and a semi tractor is $150 per day plus $0.49 per mile and no lift fee. So having the use of the lift gate will cost $140 more plus the cost to rent or buy straps. So I think I’ll just rent a tractor and save a little money and time but unloading the machine will be more of a challenge without a lift gate.

If I pull the machine most of the way out of the container and set the end that’s pulled out on stands then I can reposition the forklift so I could under the center of the machine and get it out of the container and on the ground. So I looked to see in I could rent trailer stands because they are trailer height and designed to keep heavy trailers from tipping forward with the weight of the forklift inside but I can’t find anywhere to rent them so I think I’ll have to make stands for this procedure. They just have to take the vertical force of half the machine’s weight. So I can build them out of wood as long as they have a wide enough bases to be stable. Like 4 – 2×3 corners a foot apart with 2×3s tying them together and a 2×12 cap. I can tie the two stands together with a few 2×3s for added stability. They just need to hold one end of the machine so its level until the forklift is moved to the center of the machine and lifts the entire machine by itself…

So after a few weeks of sitting in Busan, South Korea the container has been loaded on the Seaspan Hudson and is en route to Vancouver, British Columbia, Canada 🇨🇦. From there it’ll travel via rail to Indianapolis.

The workshop is coming along as well. Managed to get the garage door opener adjusted just right to maximize clearance and allow insulation to me installed in the ceiling.

Should be able to put the insulation in next weekend. Once that is done I’ll build a soundproofing enclosure for the generator. I picked up a copper pipe fitting that I think will allow me to route the exhaust outside and install a muffler to quiet the generator. I also need to extend the gas line to the propane tank and install cooling fan for the enclosure so the generator doesn’t overheat.