Can you learn from celebrity managed businesses?

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Many local and international celebrities have extended themselves beyond the core acting, singing, sporting, cooking and other activities that initially brought them fame to the realm of business.

This has taken the form of either creating their own business, acquiring a stake in an existing business, or developing product or service lines that are distributed through established retailers and service providers. There are some important differences and similarities between celebrities and ordinary small business owners which might be useful to highlight and learn from.

Like ordinary small business owners, celebrities are likely to be driven by factors such as a genuinely innovative or entrepreneurial spirit, the desire to diversify their income streams (in preparation for the post-celebrity stage of their lives), and wanting to explore long-held talents and ambitions. In addition, celebrities are unlikely to possess the skills required to successfully start, run and grow a small business (e.g. financial and project management skills, the ability to plan over different time horizons).

Like ordinary small business owners, celebrities are probably as afraid of the consequences of failure if the venture is unsuccessful (although possibly for different reasons). Unlike ordinary small business owners, however, celebrities enjoy two distinct advantages. The first is better access to financial resources. Celebrities can: tap into their own accumulated wealth (assuming the celebrity is highly paid and solvent); access networks of high net worth individuals who are potential funders, business partners and mentors; and potentially be taken more seriously by financial institutions when looking to take out a loan. Consequently, celebrities are more likely to be ambitious in terms of the original and projected size of the business, probably graduating to medium and large business more quickly than less privileged small business owners.

The other advantage celebrities have is high public profiles and marketing clout. Celebrities typically attract significant public attention in different ways (features in magazines and tabloids, advertisements, radio and television appearances, press releases, statements on their own Twitter and Facebook accounts). Leveraging this star power to brand and market their entrepreneurial ventures is theoretically an easy and natural step.

So what are the lessons for ordinary small business owners?

Celebrities are more likely to outsource the core functional and technical areas of the business, recognizing where they lack expertise (and possessing the resources to hire the best people). Ordinary small business owners should take note of this, identifying critical tasks that are better performed by someone else and outsourcing them or hiring someone in-house. Celebrities are also more likely to be ambitious, having high aspirations for their business.

Although it may take more time and effort for ordinary small business owners to reach the same heights, they should also believe in themselves and aim to develop their businesses to their full potential.

Finally, celebrities are not immune from making mistakes and are not guaranteed success in their business ventures. Owning and running a business is difficult, no matter who you are.

 

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3 comments
    @SimplyBiz a good lesson to businesses is that an unexpected surprise for your customers can go a long way to gaining loyalty. Generosity has rewards of its own and is always worth the sacrifice. Give back the little you have. Don’t say that you will start giving to charity when you have millions of rands. You won’t! Charity is not about the amount – charity is about principle. Also it is key to find what you love.Once you find that one thing that you love and that makes you unique find someone to pay you to do it.
    When you are a celebrity there is a lot more pressure on you and you are more critically assessed therefore one needs to ensure that the messages delivered are congruent to good values and not centrered around money.
    @TyMayer. very valid point here Ty.