Even the most famous and successful celebrities who manage their own businesses can run into some trouble if their profit margins are too low.
When high-profile celebrity businesses fail, the celebrities involved lose a significant amount of money and attract attention they would rather avoid.
In this article, Miami's most successful digital marketing agency will discuss five remarkable cases of would-be business owners who faced unexpected losses.
We'll also provide some expert advice on how you can avoid making the same mistakes they did so you won't end up in the same position.
Are you ready? Let's begin the run-down!
Natalie Portman's acting talent is undeniable. But as a footwear designer? She experienced some difficulties. In January 2008, Portman collaborated with the New York shoe shop Té Casan to produce a line of vegan footwear, but critics slammed both the high price and the conventional design.
Té Casan put their entire stock on sale in November of that year, but customers didn’t like the design and weren’t enticed by the re-pricing.
The entire establishment shut down by year's end and took Portman's footwear line with its closure. On November 30, the Sunday after Black Friday, the store closed its doors for good.
One of the company's employees interviewed by The Cut via phone stated, "The company went out of business. As a result, there are no sales or retail outlets."
Té Casan, may you rest in peace. Natalie Portman will have to find a new place to market her vegan shoe line.
Pro Tip: As a business owner, deciding how much to charge for your product or service is one of the most critical choices you'll have to make. If you set your price too high or too low, you'll only be able to grow your business so far.
When it comes to sales and cash flow, the wrong pricing can be disastrous. Before starting a new business, ensure you clearly understand your pricing strategy. Pricing reviews regularly can help established companies become more profitable.
When setting prices, you must ensure that the prices and sales levels allow your company to be profitable. More importantly, consider how your product or service compares to your competitors' offerings.
Despite being Paris Hilton's more reserved sister, Nicky Hilton was eager to join the family business when the time came for her to launch her own brand.
The younger Hilton announced in 2006 that she would launch Nicky O Hotels, the world's most prestigious and luxurious hotel chain. The hotel was supposed to open in Miami first, then move to Chicago a few months later.
However, none of those plans ever came to fruition. Instead, Hilton was sued in 2007 by her investor, who claimed she did not promote the properties or complete any design work she promised.
This led to the investor's decision to take legal action against Hilton.
Pro Tip: There are many reasons to start a business, such as wanting to follow a passion, make more money, or gain the ability to control your own time. But if you don't have a bigger goal in mind, those reasons might not be enough for your business to do well.
That's where commitment comes into play. In business, it's crucial to have a higher goal. The 2018 Global Leadership Forecast says companies with a purpose do 42% better than the stock market.
Because your company should, in theory, be an extension of you and your life, your dedication should contribute to your company's success and help shape its commitment.
In 2019, LVMH made headlines when it announced a collaboration with Rihanna to launch a full-fledged fashion line called Fenty. The line was to be designed in conjunction with LVMH.
According to Vanity Fair, it was the first time a luxury powerhouse worked with a famous woman of color to launch an entirely new brand.
Of course, it is only natural for Rihanna to bring her megawatt style and stardom. LVMH would contribute the knowledge and experience it has gained over decades spent developing brands such as Dior and Louis Vuitton.
Two years after the clothing line launch, Rihanna and LVMH told WWD that they were putting it on hold "until conditions improve." French luxury goods company LVMH confirmed to Quartz that the news was accurate.
Throughout the pandemic, the luxury brand struggled to gain traction in the market. Despite this, you shouldn't feel sorry for Rihanna because she has other successful brands such as Fenty Beauty, Fenty Skin, and a lingerie line called Savage X Fenty.
Pro Tip: During the COVID-19 pandemic, and even now, many small business owners had to deal with the uncertainty of a global pandemic. Many businesses, like Fenty, are having trouble coping with the long-term effects on the economy and consumer market, but others are doing well.
Here are three things that all businesses that did well during COVID-19 had in common:
In 2004, Jessica Simpson revolutionized the beauty industry by releasing Dessert. It was reportedly the first line of "kissable and tasteable" beauty products, including lip gloss, body cream, hair and body mist, shampoo and body wash, and fragrances.
Although the Dessert Beauty line had some success in 2004, things began to fall apart by the end of the year.
Cosmojet, a cosmetics manufacturer, sued Simpson, Dessert Beauty Inc., and Sephora, alleging that the defendants owed them $200,000 in damages.
Simpson's representative insisted that Simpson had "no involvement in the day-to-day operation of the company's business" and thus was not liable for the unpaid bills.
Pro Tip: Studies have shown that more optimistic CEOs are more likely to put their companies in risky situations. When making a big business decision, like whether to open a new location or release a new product, a pessimist will think about all the risks and benefits.
Rather than assuming everything will work out for the best, focusing on the bad things that could happen is more realistic. This doesn't mean that CEOs who are always negative will never take risks or will always be negative.
Instead, they can avoid making bad choices and put their time and money into projects that are better for the business's long-term success.
Britney Spears was on a roll in 2002, having released three successful albums in the previous three years. She decided she wanted to try her hand at the restaurant business and opened Nyla, a Cajun eatery, in New York's Dylan Hotel.
However, the eatery did not fare well with reviewers. After having some problems with the health code, Nyla ultimately made the reasonable decision to switch its cuisine to Italian.
The restaurant eventually faced a mountain of unpaid bills. Spears decided to close it down after only five months, blaming the restaurant's closure on management's failure to keep her fully informed of its operations.
Pro Tip: Cash flow management is a major cause of business failure.
It is critical to establish clear payment terms to reduce the likelihood of overdue payments becoming bad debts. You will also require strict credit control and systems that encourage your customers to pay on time.
Having debt management policies and procedures in place can also help when a customer or client runs into payment problems.
Entrepreneurs have always needed a lot of guts to succeed in business. Entrepreneurship can be intimidating, but it shouldn't stop anyone with a good idea and business sense from starting their own business.
Even if some of the famous people we've mentioned have had business failures, it doesn't mean that yours will fail like theirs.
Starting a business and then trying to make it successful are two very different things, especially for startups.
So, if you want your business to succeed, you must work hard and let everyone know you exist! You can accomplish this with the help of the best digital marketing agency in Miami.
Our tried-and-true digital marketing strategies at Digital Resource will undoubtedly get your company all over the internet.
Get in touch with us today to learn more about our services.