When Honest Foods Catering owner Tad Devlin approached business guru Marcus Lemonis for help boosting his catering business, Devlin could not understand why his company was suffering a 30 percent shortfall in revenue from the previous year.
As Lemonis sat in the company's storefront kitchen of Chicago's Forest Glen neighborhood to review the company's finances, he noticed two things standing out: The company was being underutilized and it wasn't diversifying its client base.
Eighty percent of the food the company produced was feeding Chicago's small entertainment industry, a seasonal one that boomed during certain periods and suffered during others. The unpredictability led the business to frequently be underutilized.
Lemonis, host of CNBC's "The Profit," encouraged the business to focus on meeting its capacity, or the maximum level of output the company could sustain. "That's a way to all of the sudden take the same amount of labor and the same amount of rent and the same amount of lights and have more revenue attached to it," Lemonis explained.
To reach capacity, the business would need to operate 90 hours per week, 30 hours more than it had been working with its staff of 12, Lemonis said. Working those additional hours would generate Honest Foods Catering another $648,960 in revenue per year.