How to Find Profit Margin with Marley Majcher
You’re working hard, making moves, but are you making any money? Marley Majcher talks about why the answer for too many entrepreneurs is no and what to do about it!
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About the Episode
LifeBlood: We talked about how to find profit margin, why way too many entrepreneurs work their butts off, but never make any money, and a system for figuring out how to price your product or service to solve that problem with Marley Majcher, sought after business coach and author of But Are You Making Any Money?
Listen to learn about an uncomfortable activity that when you do it once, will serve you for the rest of your life!
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Come on. Welcome to lifeblood. This is George G. And the time is right welcome today’s guest strong and powerful Marley, major Marley. Are you ready to do this?
Marley Majcher 0:19
I’m ready to hit it and quit it. Yeah, I’m ready George, George G and Marley Am I love it.
george grombacher 0:25
Yeah, perfect. Let’s let’s, let’s go. Marley is the party goddess. She’s one of the top event planners and renowned names at Ellie’s party planning circles. She’s also one of the most sought after a business coaches and She is the author of but are you making any money? hourly? Tell us a little about your personal life’s more about your work and why you do what you do?
Marley Majcher 0:48
Well, it’s interesting because I was listening to a bunch of your other podcasts and listening to people’s interests. And I was thinking kind of seen them. They were pretty nice and neat, you know, and I thought my stuff is so messy. Like I kept thinking, if I was stressed about anything, I was like, how am I gonna do that intro now that i’ve you know, spent most of like 10 minutes saying how how’s that going to the intro, but it uh, I like one of your other guests said like, I grew up in Pasadena. And, you know, kind of checked all the boxes, right? Like I followed the rules, very, like conservative kind of family upbringing, not necessarily politics, but just like, you know, you do this, and you did that, and you have a strong work ethic. And I got my business degree from Georgetown, and then came back to California. And, you know, the one pause in there was that when I, one summer was born at Georgetown to before my junior year, decided to go to cooking school in Paris. And I came back and decided for some reason to tell my teacher for one of my classes that was on speech on what I knew more about than anything, anybody else. And at Georgetown, that was absolutely nothing did I know more about and my mom was like, why don’t you do it on French cooking. I mean, he just came back from France. I was like, Okay, I told my I ran ran into my professor. And I was like, oh, and I’m so excited, because this is my topic. And I’m interviewing the chef from 1789. Well, that had never dawned on me. I did not know the chef from 1789. And I was like, Oh my gosh, that’s amazing. So I go back to my roommate in tears. I can’t believe I just lied to my professor want to be kicked out of school. And they are like, you know what one of my roommates said said, He’s this new guy from New York, don’t worry, he’s too new to know that, you know, he can say no, basically, interview and I was like, okay, so I say Listen, I do the meeting for my class. So I meet him and I take one look at him, and I decide I need to marry him. And it’s gonna be difficult, because I’m 19. And he is 20 years older than I am. And he is working in the bowels of a very fancy restaurant, and I am never going to see him. So I the whole time I’m interviewing him, I’m cooking up this plan, pun intended of like, like, what my differential advantage is going to be here to get myself hired. And I kind of hang it on the fact that I noticed they had souffles on the menu, and I was like, okay, for sure. I’ve made some of those over the summer, I’m going to be a souffle expert. And second that I spoke Spanish, and he didn’t. And so I kind of realized that and, and thought, Okay, I’m going to warm my way in how am I going to get this next appointment, which I did. And I think he thought, whatever, I’m never going to show up. And so net net, I worked there every day, or I worked three days a week for a year, get out of class at 230 or 330 to 1130. He never asked me out, of course. So before my senior year, I go to Normandy to cooking school plot the entire summer, how I’m going to ruin his life when I quit, because I’m like his best employee. And I go back to Tom, I quit. He says great, you know, would you like to have dinner? So get engaged the month after graduation? Oh my god. Yeah, so we move back to California, get into the restaurant business, have all kinds of you know, dramas because yours truly so focused on her goals of gold, gold, gold, doing a million dollars in sales the first year, which I did, you know, but when you have a goal and you kind of forget the other piece of it, which is you can do a million dollars in sales. But if you you know, spend 1.2 million, you haven’t really hit your goal, you know, there’s there’s missing pieces. And so, here I am, like I have this great background from school, and should be able to run my numbers and all this stuff, but for some reason, it was just very difficult to apply in real life What, what I needed to and so he was running in the kitchen, the back of the house and I was running the front and by now we’ve started a catering company and taken over a banquet operation and I just kept Focusing on like, okay, it’s the sales it’s the sales like if I win more customers and then we have a lot of customers, I don’t mean that but I mean, if we had more like revenue streams and we had more, and I just always felt stuck, well then, you know, magic for any romance, you know is, is to be in business together and then to have financial stress. And so what do I do is, you know, this is the perfect time to get pregnant so I get pregnant and now we have financial stress now romance the kid getting raised in front of the cappuccino machine. And because it was noisy, basically in a free babysitter, if you squat and I’m just like, what the heck. So the whole time My my, my dad was saying to me, Listen, you know, why don’t we keep getting these offers to partner up for the restaurant? Because we own the land, thank goodness. And he’s like, why don’t you do this? I was like, No, because to me, I would have just, you know, like, I would have been a failure. Like, even though I did love the party part of it, I didn’t love the restaurant business part of it. So anyway, my hand got forced, because that because I had a very bad skiing accident. So now I can’t walk, I’m on crutches, I’m in physical therapy, you know, on and on, I have a one year old. So we do we cut a deal with this different restaurant group, the chef and I split, we’re still very good friends to this day. But um, and I go on to, you know, after, you know, a lot of drama in my head to start the party, God is at a very low point in my life. Well, wherever you go, that is where you are, and you can whitewash any mess. But if you do not deal with the root issue, and in my case, the root issue, which was like how, what is the tie between my revenue and my margins? And why isn’t there more in my bank account, right, and so here are now I start the party goddess, I have all these, you know, seemingly from the outside, just just fabulous life. And we start doing celebrity events. And we started doing the opening of the Hollywood Bowl, and all this stuff. And I say to my dad, my parents went out to dinner, oh, and we’re doing this or doing that. And my dad has heard this story now for quite a while. And it’s not the first time his tune has been sung. And so he says, you know, Merlin, okay, whatever. So they’re you making any money. And I mean, an asteroid, my might as well have dropped in the middle of his dining room is a very fancy dining room, this restaurant, and I remember the tears were at the top, the rim of my eyes, and I remember just saying to myself, don’t cry, don’t like, Don’t let it get, I knew that if those if I let those tears go, they would never stop falling. And I just thought, you know, I am done, I am done with this story I am done when he’s like, just answer the question. I mean, I’m like, Well, you know, with depreciation with with woody depreciating martinis, how much money is in your bank account. And when I realized that here, it was, again, in exactly, not exactly, but in a very similar place, I just thought I cannot do this. And I better come up with something to frickin figure this out, because I am not going to fail. And so that’s really how the book came about I, I started I created this system for myself, which is basically based on cost of goods sold, but I have this kind of secret sauce factor about time is a big part of it. And then I, the reason that the book actually got written was because in our industry, we have this big injection industry convention every year, and you would get a free edge, you know, free pass, if you for the convention, if you taught a class and this is freaking great ROI, you know, I’m going to teach a class for an hour, and then I’m gonna get this very expensive ticket for free. And I’m going to teach my class and then you know, chop, chop, I’m going to go have a drink. And I taught the class and all of a sudden, there was like, standing room only, like, I noticed that as I was doing it, people kept coming and coming in the hallways getting filled in. And then at the end, I was like, okay, you know, check the box, I’m done. And people started asking questions, you know about numbers and about how do you price for this? And how do you charge for that? And I was like, okay, you must have come in late, because I just told you, the rest of the group here, how I messed up my numbers. And that is why I am here like I am the girl who took the deposit went to Neiman Marcus scented, and then wondered, how am I going to, you know, pay for this event that I’ve been contracted for? They’re like, No, no, no, you know, and then the next question, I was like, you guys, I’m not the one to ask. Like, I have messed this whole thing up. And they were like it You’re the only one answering our questions. And it was like, What and and then it really did dawn on me. But nobody was really talking about pricing and nobody was talking about how do you price? And why do you set your price? You just copy everybody else’s? Well, that’s what I realized a lot of people were doing. And they were like, Well, you know, how do you do your system like you made this, this sounds like, you know what my system like, and net net, I, you know, ended up writing the book to solve my own problems and named it after this conversation when they died, you know, where he asked me, but are you making any money and, and I really kind of totally fell, I mean, talking about falling into something, I mean, talking about teaching something that you considered yourself a miserable failure. But what what came out of it is, you know, when you teach something, you really do learn it, and I was not about to let anybody down. So when, when I wrote the book, I did two tons of research. And then my professors at Georgetown was was very involved with helping me with it. And, and I kept researching, and then, you know, start working with people kind of on the concepts of the book. And what I found was I would just research more and more and like, what were the Lay’s latest pricing strategies? And, you know, was there was this more beneficial than what I was doing that kind of thing. And I just got better and better at it to the point that it’s frightening. But I love numbers. Now. I mean, I absolutely love digging into how much did we charge how much we may come at, can we, you know, eke out because some money between the wallpaper in the wall. And that’s just what people don’t realize in business is. That is what matters is that space between the wallpaper and the wall. And your job is to not talking about servicing your client and having passion for those, you have to have no matter what. But it’s about creating more space between the wallpaper and the wall, and constantly focusing on expanding that space. And most people miss it. Most people do what I did for a very long time, which is, how can I get more sales? How can I get more customers? How can I get and it’s to speak to your one of your other guests who was fabulous maryalice. She said, one of my favorite quotes, which is your ladders up against the wrong building. And if you’re focusing just on sale, sale, sale, sale sales and the marketing machine and the social media machine and everything that we’re conditioned to do, you’re missing it, you first have to know how much does it cost to produce your product or service. And there are real costs even if you are just purely a service based business and so that’s kind of the you know, the paradigm shift that that I’ve gotten people or that I you know, focus on because it is a big aha moment, but it’s a shift. It’s not how most people think.
george grombacher 13:01
I love it. What a story a
Marley Majcher 13:03
very long winded story.
george grombacher 13:07
I mean, I I feel like like there’s so much I know that there’s so much good stuff in there, but I feel like there’s the title of your next book is gonna be souffles in Spanish.
Marley Majcher 13:19
You know what George g Marley am and souffles in Spanish, you know what, thank you very much to ask nice. Okay, thank you. Yeah, I’m writing that down, actually.
george grombacher 13:29
So so you talk about you can, you can try to pretty much any situation, but unless you get to the root cause and the root cause of what was what was sort of alien, you you were experiencing all this massive success, you just were not fit, you just didn’t have a good sense of what the cost to produce everything was you were pricing things wrong?
Marley Majcher 13:51
Well, yes. Okay. That’s the that’s the essence of it. Right? But a lot of business owners know that. And a lot of business owners feel that, you know, aside from the fact that, you know, we all feel like we’re never making enough money or never charging, you know, enough. But it was the why, if I am charging X to consult, or if I have X amount and product sales, why am I not? Is there not more money that stays with me? Why does it always feel like it’s coming in and all going right out. And that was what I needed to pull apart. And so one of the chapters in my book is called deconstructing the pot of soup, right? Because that’s what it felt like to me. It felt like this big mess in my head of all jumbled of all these expenses and things that went into producing and events or producing, you know, my product. And I couldn’t see I knew there was a problem, but I but I couldn’t figure out where the problem was like, What part of it was I not charging enough for or what As a charging enough, but I was spending too much to produce a product or my event that I could have produced, you know, more wisely at a better rate, or was I allowing scope creep to come into my projects, like Was I not having enough boundaries as far as this is what, you know, my event your event is going to include and if you go above and beyond this, it’s going to cause in, you’re gonna have overage charges kind of thing. And that gets into this whole thing too, about being a woman in business, and, you know, standing up for yourself and just being like, yeah, these, you know, the cost more, and here’s why. Because people always are trying to say, hey, well, can I get it for this? Or can I get it for that, or That’s a lot. You know, my sister’s an event planner, it’s like they will now I say, well, awesome, go hire her. And that doesn’t have to come back to me, but
george grombacher 16:01
I love it. So it’s obviously it’s obviously a lot that goes into that. But knowing your value is obviously super important. We talked about the space between the wall and the wallpaper. Tell me more about that.
Marley Majcher 16:12
Sure. So what it what it is, is business, whether it’s service or product base, right? It’s, you have these building blocks that go into product or service you’re going to deliver. So we have the basics that, you know, we all know, like cost of goods sold, because I’m in the dress making business, I’ve got the fabric and I’ve got the thread and I’ve got, you know, the buttons and all that stuff. And that costs a certain amount. And what I found was in my research and consulting for so many years, that’s not the part that trips people up, right? They’re cool pulling the invoices and saying, Okay, I see, I got you know, 1000 buttons, I need 10 per dress divided. Okay, that part they get, then you’ve got the component of other people’s time, right? So you say okay, I pay The Dressmaker. $10 to make this dress, okay, so that’s good. That’s another pretty clean and simple line item, right? And then it gets a little stickier when you get to overhead right and they say well how do I divide my overhead but again, that’s still pretty manageable right? If you say okay, I’ve got a home based business or I’ve got my you know, rent I pay pretty for small businesses, it’s, it’s measurable. So what I where I found the problem was when I deconstructed This was that the problem was in how much time we take to service the client or produce the product and what I found is because that is not so that path is not so linear. And I found there’s a lot of emotion involved in it, which sounds very strange, but we want to like a lot of times we go into service based businesses because we want to make the customer happy, right? We love planning events or we love the creative component or we love seeing the smile on the photographer sees a smile on somebody’s face. But but the part that we all aren’t mean almost all of us Miss is how much time it takes not to be the photographer and the photoshoot, right? That you say well the photo shoot was four hours and I charged them $2,000 or whatever. The the, where it gets sticky, and where I help people break it down is money between the wallpaper and the wall is the drive time of the photographer to the photoshoot and from the photoshoot, adding the time to pack all the camera equipment, shop online for the extra filters. Order, you know, set up the do the editing of the images. ching, ching, ching, all that time adds up and then what happens is, you divide the money you made by the hours you spent and you realize, which is exactly what happened to me. I would have been making more money at McDonald’s. And that is the God’s honest truth. I would have been I was making a you know, very generous Lee when I did this exercise. I was making less than $5 an hour and I realized oh my god, I could be working at McDonald’s and I would have gotten a shift meal and probably a 401k and I wouldn’t have had to go to McDonald’s after my events because I was so stressed out and tired and I was like what am I doing wrong? And when you when you can have that on a conversation with yourself because it is not pretty and then you are really willing to look at it and say well you know what i did drive to pick up this or that or I didn’t include this you know the FedEx shipping costs to for this product and when you when you start breaking it down if you can start having fun with it. Then the space between the wallpaper in the wall and increases, right? Because then you say, Wow, if I just ordered this one day before, I wouldn’t have had rush shipping, say 40 bucks. Wow, if I had just ordered five extra napkins, even though I wasn’t sure what the final count would be, well, I wouldn’t have added to add them the day before, at a rush charge added in a separate delivery charge. And I could eat and the price of the five napkins at 50 cents, you know, who cares. And then you start looking at your business from a different perspective. And you start looking at it from you know, how can I be more efficient, cut my hours, etc. And that doesn’t mean cutting your service to your customers, it doesn’t mean that you know, the doctor necessarily, oh, I used to spend 30 minutes and now Mulligan spend 15 it’s not that it’s the back stuff. And that’s where we have to take the magnifying glass out and look and say, Where is all of it going.
But you have to do the exercise, you have to put that that work in now it’s very, very valuable. Because you, you put it kind of in one Soma, then intensely. And the payoff is huge for the rest of the time you have your business. But because that stuff isn’t fun, it’s not the fun stuff of creating a website or you know, designing, you know, doing social media stuff. Most people don’t do and they don’t want to do it. But then what happens is they’re ladders up against the wrong wall in a wall by the way, with no space between its wallpaper.
george grombacher 21:41
I love it. I think that that’s really well said that’s, that’s an amazing explanation and like so many things in life that we just don’t want to do, and we avoid it and we refuse to look if we just did it the one time then we would know and it would serve us for the rest of our lives.
Marley Majcher 21:58
Right and it’s and I guess maybe part of my message and part of why I wrote the book and kind of why I get on this bandwagon is is that you know I wanted to just do my business right like I wanted to just do the event and I hear that so many times from really like I don’t want to do the numbers like I don’t want to end the message really is just as you said do it just do it once kind of the big overhaul and then it pays dividends but it isn’t that bad like once you get into it it’s kind of fun and I will tell you it’s very empowering because nobody can really mess with you I mean you will from that point stop negotiating your rate to a ridiculous amount right because you will know it takes me X amount of time and X amount of money to do this photoshoot or to produce this you know doesn’t cake and you just you’ve got the knowledge so you’re like yeah, no, I can’t discount it by 25% because then I will be right back at my McDonald moment and then where I where I see that’s when that’s when your sea legs get built I mean that’s when you get your muscles and when you release can start cranking in your business because you have a solid foundation now but it is really about just kind of picking it apart and it doesn’t have to be scary doesn’t it doesn’t mean picking it apart and then throwing your business in the garbage it means just picking it apart so that you can just kind of you know reorganize the garage a bit it isn’t like we got to sell the house it’s no just take the stuff out of the garage and let’s just put it back in the most efficient way. And then thank you we’re done we don’t have to go back to the garage next
george grombacher 23:48
eautiful well Marley thank you so much for coming on where can people learn more about you? How can they engage with you where can they get a copy of are you making any money
Marley Majcher 23:59
they can get a copy of the book on Amazon which I would so love and they can I’ve got this free little course kind of videos on exactly my method to get people to have a taste of it and see if it’s for them. And they can do that at many am I and I got the profit goddess calm and that’s the two DS and two s’s and I think that’s the best place to start. I think they check that out or buy the book and and see but the biggest messages it’s not that bad. Just just jump into it and you know, you will feel like that. You know Rosie the Riveter Yes, we can hear me roar at the end of it.
george grombacher 24:43
Love it. If you enjoyed this as much as I did your mother your appreciation and share today’s show with a friend who also appreciates good ideas pick up a copy of but are you making money on Amazon and then check out that video course. Give us the website again Marley
Marley Majcher 24:59
mini Stop the profit goddess.com
george grombacher 25:02
Mini dot the profit goddess.com Thanks good Marley.
Marley Majcher 25:09
Thank you for having me.
george grombacher 25:11
And until next time, keep fighting the good fight. We’re all in this together.
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