Chapped Chin??

Or could it be partly because he sleeps with his chin on the floor and it may be irritating it?

Some dogs are prone to developing infections on their chin and lips that closely resemble "teenage acne" in people. In fact, "acne" is what this disorder is usually called. The cause, however, is not adolescent hormone fluctuations, but repeated "bumping" of those stiff chin and lip hairs on objects such as chew toys, food dishes, and the ground itself, an action which not only inflames the hair follicles by driving those stiff hairs into them repeatedly, but may actually break off the individual hairs below the skin surface and rupture the hair follicles, releasing hair protein and other irritating follicle contents into the tissues under the skin. The hair follicle begins to "ooze," trying to expel the foreign material, and it becomes chronically infected secondarily, repeatedly discharging small amounts of bloody fluid from small nodules, each of which is at the base of a hair or where a hair used to be.