Some additional details on what type of hot water heater you have would be helpful. Is it a free standing tank with its own heat source (typically electric or gas) or is the water heated by heat exchanger on the main furnace boiler (also known as a 'tankless' heater)? Electric hot water heaters usually have 2 heating elements and if one goes bad, this can result in limited hot water. If it is a self heating tank, it could be too small but I doubt it (should be large enough to last a shower). The 'tankless' heaters are prone to getting scale on the surface, degrading the heat transfer and limiting hot water delivery. I have one of these and added a hot water storage tank with a circulator. This acts as a hot water 'capacitor' - storing up hot water from the tankless heater and then releasing it on demand.