Skip to main content
  1. News
  2. Business & Finance
  3. Small Business

6 Epic Business Failures and the Lessons Learned

See also

Mistakes happen. And when you are running a small business they can be costly, painful and heartbreaking. Most of the time, mistakes are stepping stones to better ways of doing things. At the very least, they are lessons to be learned. The bigger the mistake, the harsher the lesson. 6 small business owners shared some of their epic failures and the reminders that will, hopefully, prevent you from doing the same.

Carefully run your numbers with daily deal sites (i.e. Groupon). We formed Food Truck Festivals of New
 England in the Boston area. For our first festival in 2012, The Boston 
Food Truck Festival, we decided to sell 2,000 of our $40 tickets via Groupon.
 So folks got them for $20 (entitling them to one item each from 25 food 
trucks) and we got $10 per ticket book. Each ticket book had one ticket per 
truck in it. 



It was a debacle. 10,000 people arrived. And instead of each using one
 ticket book, they divvied up the book between two, three, four, eight 
friends. So, we sold 2,500 books but had 10,000 people. The trucks ran out 
of food. It was 85 degrees and people were standing on line for an hour.
 We had countless demands for refunds. Many, many people were angry. It was 
horrendous. 



We learned. We changed our system to a simple $5 gate admission and then 
you buy directly from the trucks. In September we will have our 16th food 
truck festival with another three to go in 2014. Groupon is great for some, but you must be careful!
 Janet Prensky, www.foodtruckfestivalsofne.com

Always test your technology before a big debut. After our launch in May of 2010, we found ourselves on the cover of The New York Times Style Section coined as "the next generation of online dating." We got site traffic from all over the world, until Cheekd.com crashed (mild nightmare). Once the site came back to life, we got orders all over the country. The Cheek'd business model is based on a recurring subscription model, once users make the initial dating card purchase. It was the biggest day in the history of Cheek'd. However, soon after, we realized that our web developer, based in London, had the button ticked "OFF" that captured our users’ credit card information and were unable to enroll them into our recurring subscription. With hundreds of new signups, we lost nearly $30,000 from this simple mistake. I joke, now, that our London-based web developer is lucky that he didn't live in America at the time. Lori Cheek, www.cheekd.com

Never underestimate quality control. "You only had one job," a fan of ours wrote on our social media page - accompanied with the picture attached. Somehow, an entire GROUP of people in production missed the fact that they were filling sunflower kernel bags with pistachios, and they made their way into the market. Someone grabbed the wrong roll of film, but not one person who was filling the bags, sealing the bags, putting them into boxes - noticed that the product was being filled in the wrong film. It made me realize that internally, we had communication gaps. Barcelona Nut Company is a small manufacturing business, which means that everyone must wear more than one hat. There should always be more than one set of eyes and open dialogue among co-workers to ensure that the process runs smoothly, efficiently, and most of all, successfully. Sure, everyone makes mistakes, and this one could have been ALOT worse (think foreign objects, or no product in the bag at all), but this mistake is avoidable if employees are paying attention to their own work as well as the people around them and communicating more effectively. Be aware of your surroundings. Shannon Schmansky, www.barcelonanut.com

Protect your intellectual property with an NDA, regardless of whom you are speaking with. The most epic failure was talking to our channel vendor about some software
 we designed (integrating their software into it). We talked, we showed them
 how it worked and we spoke about marketing it in the future. 



The failure was not having them sign an NDA. The channel vendor took our
 concept and implemented it - taking all the credit and revenue.



 We are still recovering from it.



 Association and business relationships don’t always equal trust. Lesson learned - never trust anyone! Get those NDA’s signed and adhere to them
 no matter how good you think the relationship is. 
Orit Pennington, www.tpgtex.com

 


You get what you pay for. The biggest start-up mistake we made was designing our website. We started with $5,000. It wasn't a lot of money, but it was enough for us to run a very lean minimum-viable-product test. The first thing we did was hire a developer to build our website. We found a guy in Bangladesh, hired him for $889.99, and went through the extraordinarily painful experience of pushing him to build something useful, as quickly as possible. The website was a mess, and since our business was online, we got off to a very rough start. In hindsight, we should have had a professional design our website. It would have been worth the money to avoid the heartache and delayed start-up.

 Rob Biederman, www.hourlynerd.com

Dust yourself off and get back in the saddle. I started my professional coaching business back in 2008 and in 2011, I was hired to give a series of career
 development workshops for a technical college in NYC. I easily sold 
them on the ideas and they agreed on a very high price, However, never having 
given a professional workshop before, when it actually came time to give the 
presentation… well, it was rather underwhelming. So underwhelming 
that the head of the career services office demanded I pre-present my next
 workshop to his staff; warning me that unless I drastically improved my 
technique, I’d be fired. I was mortified. But, tail between my legs, I gave 
the best workshop I possibly could to the staff. I was still fired. They
 appreciated my effort, but they still decided that I hadn’t lived up to my 
hype. That horrible failure, that experience of hitting rock bottom,
 became the building block for my current success. Fastforward to 2014, I’ve given hugely
 popular workshops at CUNY, the NY Public Library and I just sold a series
 of 7 workshops to Pace University, starting in October 2014. Carlota Zimmerman, www.carlotaworldwide.com

Success is not measured by the quantity of your stumbles but the quality of your recoveries. Life doesn't get easier. You have to get smarter. Revitalize, reimagine and persevere with the daily curated eMagazine, Micro Business Therapy™

Feel that tingling in your fingertips? That’s the magnetic urge to learn more about Micro Business Therapy... start here. Micro Business Therapist, A.Michelle Blakeley, is a small business professional with extensive experience in business organization and has successfully guided hundreds of small business owners through the daily challenges of operating a small business with practical and relevant small business advice.

Advertisement