Marcus Lemonis, the CEO of Camping World and star of CNBC's hit series The Profit, points out that Honest Chops founder Khalid Latif made a business mistake: In an effort to be "socially responsible," Latif set a price for his organic halal meat that was far too low to be sustainable.
The two hash out what Latif should do about it in the most recent episode of Inc.'s weekly Ask Marcus Lemonis video series. The series, which publishes on Tuesdays on Inc.com, gives a featured entrepreneur the opportunity to ask Lemonis one question about a business challenge.
So far, Latif says his business is faring well. He started Honest Chops, an organic halal butcher in New York City, last year. The aim: to create additional revenue streams to fund his social outreach initiatives as a chaplain at New York University. So far, Honest Chops has reeled in more than $325,000 in sales. But Latif asks: "How do we maintain the value-based drive that we started this out with as we grow and expand?"
Lemonis probes and quickly uncovers that Latif prices his chicken, for instance, at $5.50 per pound, which is as much as $4.49 lower than at nearby grocers. Lemonis is skeptical: "To lower the prices just to be able to feel like you're serving the community is noble, but I don't know how long the business model works. Because if things get tough--the market changes, a competitor moves in--what do you do then?"
Raising price points now is easier said than done, says Latif. But Lemonis has a solution. To find out what that is--and how it maintains Latif's socially responsible mission--watch the episode above in its entirety.