Lessons to Learn from Celebrity Businesses That Failed

Celebrities, from singers and actors to directors and athletes, have all the money to start their own business but unfortunately, not all end up successful. Many of them often start with great excitement as they are able to fulfil their entrepreneurial dreams. Towards the end, however, certain things go out of control resulting in the failure of their business.

Businesses need to make sales and earn revenue to survive in a very competitive setting. When sales goals are not met for extended periods, there's a likelihood that the enterprise may fail with the owner forced to declare bankruptcy.

"In many instances, bankruptcy is the root cause of an unsuccessful business," said Los Angeles Bankruptcy Lawyer Matt Resnik. "Owners sometimes fail to consider the various aspects of running a business and get professional advice on how they're supposed to operate and sustain it for the long term."

Other than bankruptcy, though, various factors can also prevent a company from making profit. These factors include poor market conditions, conflicts among partners, lack of transparency in running the business, lack of funds to finance the business, lack of employees, poor business location, personal issues and making wrong decisions.

To Partner or Not

Sometimes, it's best to launch a business on your own with no partner. This way, you are able to take full control of your entire operations without having to think about or wait for another person's opinion.

Among celebrities who failed in their enterprise, many had partners. As an example, blond actress Suzanne Somers of Three's Company opened Suzanne's Kitchen in 2006 with Kentucky Governor John Brown as his partner. Just after a year, the business closed due to conflicts between Somers and Brown.

Poor Sales

Any enterprise needs to make sales in order to survive. As such, a business needs to have a concrete strategy that will enable it to attract customers on a regular basis and reach its sales goals.

To cite an example, popular director Steven Spielberg opened a restaurant in 1994 with his partner Jeffrey Katzenberg. Called Dive!, the dining place featured a submarine theme and had branches in Los Angeles and Las Vegas. It was shaped like a submarine and the unique feature was that every half hour, the place would simulate a dive with flashing red lights. The business lasted for only five years as eventually, its sales dropped.

Hidden Fees

When in business, it's important to be transparent to your customers particularly about fees being charged. Honesty is always the best policy.

Take the case of the famous Kardashian sisters who launched a debit card in 2010. Kim, Khloe and Kourtney wanted their so-called Kardashian Kard to work as a prepaid debit card aimed at young adults who were financially unsophisticated.

Unfortunately, they later received various kinds of complaints such as exorbitant and other hidden fees. That led to the closing down of the business in just less than a month after its launching.