Marginally Better S01E23: The Capacity Catastrophe

Every business has its version of April 15th — a stretch of the calendar when most of the customers arrive at once. These surges are the most predictable events in commerce, and every year they break somebody. And sometimes the busiest day of a business’s life doesn’t send a save-the-date at all. It just walks in on a random Tuesday and orders the banana pudding.

In this episode of Marginally Better, Joe Taylor, Jr. looks at what happens when demand finally arrives and the business can’t hold it: the federal agency that lowered its own goal for answering the phones after it had already fixed that exact problem once, the retailers who win December with homework they do in September, and the one-woman dessert shop outside Houston whose viral moment put its owner in urgent care — until she made the counterintuitive call that probably saved her company. Plus the most American business there is: the fireworks stand that earns nearly its whole year in a single month, on purpose.

Episode Links:

The Season You Saw Coming

The Feature: The Puddery

The Counterweight: Fireworks Stands

Company Mentioned

Johns & Taylor — blog and newsletter

Transcript:

[00:00:00] On the Tuesday after Thanksgiving in 2023, a man with a phone camera walked into a four-table dessert shop in a strip mall south of Houston and ordered the banana pudding.

Nine days later, the woman who owns that shop was standing in front of an urgent care clinic, filming a message to her customers. She had a diagnosis: a strained chest muscle. From stirring pudding. Because that man’s video review went out to millions of people, and by the next morning, the line outside her little shop wrapped around the building — and it never stopped.

She was living the dream every small business owner shares. Everyone shows up at once. And it was breaking her — her processes, her supply, her actual body. So she did the thing you’re never supposed to do in the middle of the biggest rush of your life.

She closed.

Today: what happens when demand finally arrives and your business can’t hold it. Also on the show — the federal agency that just told America to expect fewer answered phone calls at peak times, after it had already fixed that exact problem once. And the most American business there is: the one that earns nearly its whole year in a single month, on purpose.

That’s all coming up, on Marginally Better.

Every business has their version of April 15th. A stretch on the calendar when most customers arrive all at once. Black Friday. Back-to-school. Wedding season. Tax season. These surges are the most predictable events in commerce. And yet, every year, they break somebody.

So before we get to the woman with the banana pudding, let’s look at how some of the biggest operations in the country handle crowds they already know are coming.

We’ll start with the federal government, because nobody on earth has a more predictable busy season than the IRS. In the United States, tax day has been April 15th, give or take, since 1955.

In January, the Treasury Inspector General for Tax Administration — TIGTA, the IRS’s in-house watchdog — published its readiness review for the 2026 filing season. The numbers describe an agency walking into its busiest months with fewer resources than it’s had in a long time.

Staffing, down about nineteen thousand people — back to where it stood in the fall of 2021. The pile of unprocessed work — including amended returns, taxpayer letters, mandatory paper filings — sitting at about two million items in December, more than double what it was before the start of the pandemic.

And then there’s the phones.

For the past few filing seasons, the IRS set a goal of answering 85 percent of the calls where a taxpayer wanted a live human. That’s a number that many insiders already admit is a compromise from where they’d like to be.

For 2026, TIGTA reports, the agency lowered that goal to 70 percent. The last time the IRS actually landed below that was 2022 — when the number came in at eighteen percent. Fewer than one in five callers got through to a person.

Here’s what makes this a business story and not just a Washington story. The IRS fixed this once.

After that 18-percent year, Congress handed the agency a massive hiring budget, it staffed back up, and by fiscal 2024 it was beating the 85 percent goal on its own yardstick. Keep in mind: for “a variety of internal administrative reasons, that level of service” only includes certain phone lines — roughly a quarter of the calls the IRS gets, according to the National Taxpayer Advocate. But by any measure, the phone support got dramatically better.

Which raises a question for every business owner listening: when your busy season goes badly, is that just bad luck or bad timing — or a decision you made months ago that you may have not even thought through all the way? We won’t speculate in this case if that decision was deliberate or an unintentional outcome from broader budget cuts. But even experienced tax professionals with enhanced agency access say they can only rarely get through to an actual human at the IRS.

The biggest retailers, at least, treat an expected surge like the main event it is. Back in September, Boston Consulting Group published its playbook for the 2025 holiday season, and I want to read you one sentence, because it’s the thesis of this whole episode. The holidays offer a disproportionate chance to win, BCG writes, but — quote — “the window to make the right moves is narrow, the stakes of failure are high, and a poorly executed holiday sales season can amount to a beautifully wrapped disappointment, even for the strongest brands.”

That’s what a surge does to an unprepared business. All that demand, all that attention — and it arrives at a company that can’t convert it.

And notice what BCG actually prescribes. Not heroics in December. Homework in September. Reassess the targets. Line up the hero products with the inventory you actually have. Stand up what they call a command center — one cross-functional team empowered to make fast calls when the season starts moving. The firms with the most money and the most data have concluded that you don’t win the busy season during the busy season. You win it months before.

Now shrink that down to a shop with one owner and no command center.

Last October, Retail Dive’s Daphne Howland reported on how small retailers were heading into the holidays. She cited research from Xero, with an X, the small-business accounting platform. They found 37 percent of small business owners worried about Black Friday foot traffic. Another 32 percent worried about running out of holiday inventory, and three in ten worried about plain old burnout.

The weeks that pay for the whole year are the weeks the owners both love and dread. One Portland, Maine shop owner in that story had her inventory lined up for the season — and was already losing sleep over whether her suppliers would have anything left for the following year.

For a big chain, a surge is a project to be managed. For a small operation, it can feel like weather. Something that happens to you.

But at least Black Friday sends a save-the-date. What happens when the busiest day of your business’s life shows up unannounced — on a random Tuesday, in the form of one man ordering dessert?

When we come back: a one-woman pudding shop outside Houston becomes the most talked-about dessert counter in America overnight. And the owner makes a decision, in the middle of all of it, that most business experts would call crazy — and that probably saved her company. That’s next. It’s Marginally Better.

Quick word about the team behind this show.

Marginally Better is made by Johns & Taylor. We’re a user experience consultancy, which is a fancy way of saying we help businesses figure out why customers get stuck — on their websites, in their checkout lines, on hold with their support team — and we help our clients figure out what to fix first. We’re big believers in data over drama: fewer opinions, more evidence, no redesigning things that aren’t broken.

And every week, we write up what we’re learning — the research behind episodes like this one, plus practical ways to apply it to your own business — on the Johns & Taylor blog and in our Tuesday newsletter. It’s free, it’s short, and it’s written for owners, not just for engineers. You’ll find all of it at johnsandtaylor.com.

It’s Marginally Better. I’m Joe Taylor Jr.

Pearland, Texas. A suburb south of Houston. In a strip center on Broadway Street, between the kind of neighbors every strip mall has, there’s a dessert shop called The Puddery. It has four tables. The specialty is banana pudding, along with an invention called the Oreo Croffle — half croissant, half waffle, which is the kind of thing you drive across town for.

The Puddery is run by a woman named Janel Prator. And “run by” is underselling it. By her own description, the shop was a one-woman show. Janel made the pudding. Janel worked the counter. Janel packed the shipping orders. On busy weekends, her daughter came in to help. That was the whole org chart. Not because she wanted it that way — because, as she said herself, the business had never brought in enough money to justify hiring anybody.

Which, by the way, is the capacity math for nearly every small business in America. You staff for the demand you have, not the demand you dream about. That’s rational. That’s responsible.

It also means the dream, if it ever arrives, lands on a system built for a more typical afternoon.

On November 28th, 2023, the dream walked in.

A former MMA fighter named Keith Lee had become, improbably, one of the most influential food critics in America — a TikTok reviewer with millions of followers who eats in his car, speaks in deadpan tones, and scores what’s in front of him with total honesty. Small restaurant owners have been teaching their teams to watch out for this guy’s headlights in their parking lots.

His fans talk about the Keith Lee effect.

Lee tried The Puddery.

He said he wasn’t really a dessert person. Then he called the croffle “immaculate,” said the menu overall was — his words — “absolutely insane,” and gave the shop a nine out of ten. From him, that’s about as good as it gets. And he pushed it out to an audience about the size of a mid-sized country.

Janel watched the review go up and didn’t believe it. “Even when Keith Lee posted the review, I was still in denial,” she said later. “Like, I don’t know if y’all are really going to come.”

Then she looked out the window. Quote: “When that line formed, I was like — oh, crap. It’s happening.”

The line formed within hours.

And then it stayed. Out the front door, down the sidewalk, around the side of the building. Day after day. For a week and a half, The Puddery ran at a volume it had never been designed to survive, powered by one woman’s two hands.

Do the math on what that means physically. Every cup of banana pudding in that display case exists because Janel Prator mixed it. The wave of new customers didn’t just empty her case — it turned her into a factory running double shifts but with nobody else to hand off to. She suspended online shipping orders entirely, just to triage the line.

It wasn’t enough.

Nine days in, her body filed a complaint. Chest pain. She went to urgent care — and the diagnosis was a strained chest muscle, overworked from mixing and preparing pudding. The best thing that ever happened to her business was physically injuring her.

And here’s where Janel said the quiet part out loud, in a video she filmed for her customers right outside that clinic. “Usually I would just thug it out and work through it,” she said. “But because of all the influx of all the customers we have, I really feel like I need to stop for a second and make sure I’m OK. Because the weekend is coming, and I want to make sure that I’m on point for all the customers that we have coming this weekend.”

And then she did it. With a line of brand-new customers forming every morning — customers she had waited years for — she closed the shop. Three days, until that Saturday.

Let’s be clear about how counterintuitive that is, and why her decision was the right one.

Every instinct, and frankly a lot of business advice, says you never turn off the faucet while the water’s running. Viral attention decays fast. Those customers might not come back.

Janel looked at the biggest revenue days of her life and decided the thing at risk wasn’t this weekend’s sales. It was everything after. Serve that crowd badly and the Keith Lee effect becomes ten thousand first impressions you fumbled. The review said this place is worth the drive. The experience had to keep the promise. But even worse, Janel had no backup. Thugging it out could have cost her her life.

So the closure wasn’t a retreat. She used the pause to rest, to rethink her processes, to start hiring — including neighbors and total strangers from the community who’d offered to work the rush. The one-woman show finally started auditioning a cast.

Here’s what the next eighteen months looked like…

The Puddery reopened that Saturday, staffed and stocked. The crowds kept coming — and now the shop could manage them. With the new revenue, Janel bought a food trailer, a second serving line she could park wherever the demand was. Then she signed for a larger space in the same shopping center, purpose-built for volume the old four-table shop was never meant to handle.

And in March of 2025, Keith Lee came back. This time with a camera crew and a check. In partnership with Toast, the restaurant point-of-sale company, he presented The Puddery with a fifty-thousand-dollar grant to help finish the move into the bigger location.

Now — it would be easy to file this under happy accidents. I think that misses what actually happened. At the moment of maximum pressure, Janel Prator made a capacity decision most much-bigger companies often get wrong. She recognized that her scarcest resource wasn’t pudding or parking. It was her. One irreplaceable person, running at 130 percent, with no backup. And instead of riding that resource until it failed for good, she stopped, on her own terms, and rebuilt the system underneath the demand.

Let’s recap…

The IRS answered its phones when it bought the capacity to answer them. BCG’s retail clients win December because of what they do in September. And a dessert shop in Pearland is thriving because its owner understood, nine days into a stampede, that the surge wasn’t the emergency.

So — the question for you. Picture your best possible month arriving unannounced. Triple the customers, starting tomorrow morning. Be honest: what breaks first? Because whatever you just pictured — that’s not a hypothetical weakness. That’s a decision you’re making right now, by default. Janel got to make hers from an urgent care parking lot. You get to make yours from wherever you’re sitting.

I want to end with the one business that never gets surprised by its surge — because the surge is all there is.

You saw them last week, if you drove pretty much anywhere in America before the Fourth: the fireworks tents. They materialize in grocery store parking lots and roadside gravel lots at the end of June, blaze away for a week or two, and vanish. Zachary Crockett covered them on the Freakonomics Radio show The Economics of Everyday Things, and the numbers are huge. Consumer fireworks — the backyard stuff — is a 2.2-billion-dollar-a-year industry in this country. A typical stand grosses somewhere between 25 and 60 thousand dollars in the days around the Fourth, and owners told Crockett that netting 20 percent of that makes a good year.

Phantom Fireworks, one of the biggest players, runs about fifteen hundred of those pop-up tents nationwide. And its vice president, Alex Zoldan, told the show something that should sound familiar by now: 80 percent of the company’s entire year happens in one month. “It’s a brutal run,” he said. “But it’s like a month in a few days.”

So how do you build a company where the busy season is, functionally, the only season? Zoldan gave the answer, quote: “Our business is 90-plus percent planning and 10 executing.” The fireworks arrive by container ship from China — a six-week voyage, on the short list of vessels allowed to carry them, into the short list of ports allowed to receive them. Which means the orders for next July have to be placed by this July. The tents you saw last week? Phantom was already buying next summer’s inventory while customers were standing in them.

And in California, roughly a thousand of Phantom’s stands aren’t even run by Phantom. They’re run by nonprofits — church groups, veterans’ organizations, cheerleading squads — who work the tent and keep a share of the profits. The cheer team’s uniforms get funded by a week of selling things called, and I promise this is a real product name, “Grounds for Divorce.”

The fireworks business never has to survive its busy season, because it never pretends the busy season is a surprise. It inverts the whole year: eleven months of capacity-building, aimed at one week of catching everything that falls. All for a product that just goes boom.

That’s our show. If you take one thing with you this week, take this: your busy season is not weather. It’s an appointment. The IRS’s phone lines, a retailer’s December, a pudding shop’s viral moment — in every one of those stories, the capacity to serve the crowd was decided long before the crowd showed up. The businesses that break under a surge usually didn’t fail in the moment. They failed months earlier, quietly, in a budget meeting or a hiring decision or by saying “we’ll deal with it when it happens.” And the ones that thrive — like a one-woman shop in Pearland — treat the crush not as an emergency, but as the moment they’d been building for all along.

If you want help thinking through where your own business would crack under its best month — that’s the kind of question our team at Johns & Taylor works on with clients every week. Come read about what we’re building at johnsandtaylor.com.

Thanks for listening to Marginally Better. If something here was useful, send this episode to one person who runs a business — that’s how the show grows, one forwarded episode at a time. And a review wherever you listen helps one more business owner find us.

For show notes and the research behind today’s episode, head to marginallybettershow.com, or follow the link wherever you’re listening.

Marginally Better is a Calufrax production. Our producer is Nicole Hubbard, with research by Connie Evans.

I’m Joe Taylor Jr.

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