With 2014 drawing to a close, it is time to look back on the biggest mistakes that small businesses and entrepreneurs made this past year – and learn mightily from them, as these mistakes have cost some entrepreneurs everything. Some businesses are already closing down from their epic failures; others are still chugging along. Some businesses have been named in this article; others have not because they are too numerous to mention. But these mistakes – some of which are hugely obvious and egregious mistakes – all are epic mistakes for small businesses and entrepreneurs to make, and they do not have to be repeated by any other business in the New Year since many companies have already learned their lessons the hard way. Next year can be epically awesome for small business, but only if they heed the warnings from these epic small business failures of 2014. As a bonus, this list also includes a tip that can help struggling small business owners and entrepreneurs with their marketing.
Not communicating with customers.
Santa Monica, Calif.-based activewear company Ellie was the darling of the apparel industry at the beginning of 2014. It was shipping orders on time, introducing its fans to its very talented designer, and releasing functional activewear that was fun to wear. But as 2014 wore on, some of the old problems began to plague the company: delayed shipping, for example.
The truly epic fail came in the lack of communication with both customers and brand ambassadors, however. Its customers weren’t notified of shipping delays, and its brand ambassadors were sorely neglected and not provided with sneak peeks. Finally, Ellie changed its business model from an affordable $49.95/month outfit to a program that still meant paying a lot for items that may or may not have been better quality. In the process, it lost a lot of core customers and loyal fans, a situation exacerbated by the new general manager’s attitude of “at least we’re still cheaper than Lululemon!” And according to social media posts, we won’t be seeing Ellie continue into 2015.
With a complaint to the BBB filed in September 2013, you would think that New York-based Elizabeth & Clarke would be willing to work with a customer, particularly one with a legitimate gripe that the company had yanked a $100 credit from her account. And you would be wrong to assume this. The founder, Melanie Moore, first ignored the complaint, then went on the defensive, mining the customer’s social media accounts and spinning a false narrative about the customer due to her political beliefs. In other words, instead of trying to smooth things over with a previously loyal customer, Moore libeled her to the BBB (which also epically failed in not noting that the complaint was not resolved), refused to provide her with the $100 credit that had been in her account, and blocked her on social media from her personal page. If the lack of engagement on Elizabeth & Clarke’s company Facebook page is any indication, this is another small business that won’t make it very far in 2015.
Voting to keep the casinos in Massachusetts.
Any small business owner or entrepreneur that voted to keep casino gambling in Massachusetts is gearing up for epic failure, particularly if the business is a restaurant or entertainment business. When the casinos fail, small businesses fail, according to an article on Philly.com. Businesses that rely on foot traffic will see a decrease in customers if the casino succeeds. Really, there are no winners, except for the casino. As always, the house wins.
Still supporting Obamacare.
Any small business owner or entrepreneur that still supports Obamacare, even as the employer mandate kicks in for 2015, deserves to fail epically, even if the mandate for businesses with 50-99 employees doesn’t take effect until 2016. This is the mandate that will force these small businesses to choose between expanding or closing. This is the mandate that will require mountains of paperwork.
Not recognizing the value of professional design or content.
There are too many small businesses and entrepreneurs that adopt a DIY mentality for their design or content, with disastrous results. Content in particular is an area that small business owners and entrepreneurs are neglecting, and that will cause them to fail. Those that are succeeding are creating compelling, professional content suited to their business’s voice, usually by hiring freelancers. But even small businesses and entrepreneurs with a limited budget can access great copywriters and designers via bartering.