It’s interesting to see the many ways in which a major recession can manifest itself. While overall consumer spending has decreased since its 2006-7 peak, there are still numerous industries that are enjoying boosted spending and a greater level of public sales. Movie theatres, amongst other entertainment-based businesses, have experienced a boost in ticket sales, increasing revenues at a time where other businesses are fighting to stay alive.

One of those is the English Premier League. Despite housing some of the most impressive and wealthy clubs in the world, one of the league’s own is barely hovering above bankruptcy. After decades of relatively rapid growth, Portsmouth Football club is struggling to keep above steady operating costs and still attract talent.

Similarly, many American cultural sites are experiencing reduced revenues. While attendance at Smithsonian museums has increased dramatically – largely because of the sometimes-free attendance – per-visitor revenue has decreased. With the average ticket cost of £7, a visit to the museum is an inexpensive alternative to a film, but also one that leaves visitors with the option of spending extra money on a donation.

Well-known real estate mogul and TV tycoon Donald Trump isn’t looking too happy about his Atlantic City casinos and hotel investments. In the poor United States economy, luxury spending has decreased significantly, primarily affecting gambling-based resorts and major luxury hotel chains. Trump Entertainment’s New Jersey casinos have reported a clear downturn in spending and decreased operating revenues for the past two years.

But there are other factors hinting at the failure of the resorts. Two days before the company announced bankruptcy and had its assets quite quickly placed for auction, Trump and his daughter Ivanka, announced their resignation from Trump Entertainment itself. The company is now laying out a £225 million restructuring plan, aimed at bringing life – and hopefully profitability – back to the company’s Atlantic City resorts.

Billionaire investor Carl Icanh is reportedly eyeing up the company’s last assets as a strategic piece. A personal friend of Trump, Icanh is already invested in the Atlantic City economy, particularly in the resort and gambling areas. If his move to purchase Trump’s casino assets is successful, he’s due to stand on par with Harrah’s Entertainment Inc., the largest company in Atlantic City’s entertainment industry.

It will be interesting to see where these developments head in the ever-changing economy. As the global economy recovers, spending on luxuries such as holidays and gambling are sure to increase – making this a potentially valuable investment. For multi-billionaire Icanh, this could be a risk with inevitable payoff.

Good business is all about taking what’s impossible to others and making it work. From technological innovations to unconventional pricing models and business plans, the most effective businesses don’t always offer the most investor-friendly product, but the best product and business for consumers.

Unfortunately, sometimes those same investors and consumers just can’t see those products being a success. From breakaway technology advances to bizarre online shoe stores, many ultra-successful products and companies were targets of criticism and projected failure when they first launched.

Call it public stupidity or lack of foresight, but the best products often tend to be those that initially stir up nothing but skepticism. These six business successes certainly did just that, stirring up cynicism and conjecture from major industry players, reporters and journalists, and even the same public that later embraced them.

1. The Apple iPod

Source: http://farm1.static.flickr.com/33/51478079_08d634785c.jpg

Salesmen and entrepreneurs need to get pumped up and motivated to truly be successful, and there are a couple of ways to do it. The first is to watch motivational business movies – Glengarry Glen Ross, Wall Street, and a few others are particularly popular. The second is to watch Steve Jobs introduce a new product.

When the iPod was introduced in 2001, the crowd was surprisingly silent and uninterested. Compared to the fanfare surrounding Apple’s 1999 iMac launch and 2007 iPhone presentation, it’s certainly reserved and rather low-key. Similarly, the iPod’s launch wasn’t so successful either – few units were sold in the first two years, and the market for mp3 players was spread wide and thin until 2003.

Of course, the iPod later became a huge business success, and very few people saw it coming. While tech reporters spent the first two years claiming that Apple had dropped the ball, the results quickly began to speak for everyone. In two years of skepticism and industry conjecture, Apple managed to create a product that not only fought off criticism, but changed the world of music.

2. The George Foreman Grill

Source: http://farm3.static.flickr.com/2187/2200547061_069b375473.jpg

Professional wrestling icon Hulk Hogan reportedly passed on the chance to promote this ultra-popular grill in the early 90s. It’s difficult to see how anyone could pass on the opportunity to promote the incredibly popular George Foreman Grill, which went on to sell over 80 million units worldwide. Let’s file this one as a lack of business anticipation, as the promotional deal could have earned Hogan over $150 million – significantly more than his wrestling or TV careers.

3. The Internet

Source: http://i26.photobucket.com/albums/c110/sedna16/mcdelivery.jpg

It’s quite incredible that the biggest business development of the century was completely unseen by most major businesses. Rather than investing in scalable and effective internet presences some of the world’s biggest companies – McDonalds, Pepsi, Coca-Cola and hundreds more – invested in ultra-cheap websites, providing them with little more than a static advertisement online.

While most companies have since adapted and learned how valuable the internet can be, a few still haven’t seen the way it’s changed business. A success not just for commerce, but for the world, the internet is one of the most impressive and unexpected business successes of the last century.

4. John Carpenter’s “Halloween”

Source: http://www.boxofficereport.com/images/films/316halloween.jpg

Produced on a shoestring budget and plagued by production difficulties, John Carpenter’s 1978 film Halloween was a huge success for its indie investors, but unfortunately not for all of them. While most designers and production crew turned down a one-off salary in favor of equity in the film, production designer Tommy Lee Wallace opted for a set salary, unsure of the film’s potential success.

Halloween was a huge success, earning over $60 million from its $300,000 production expenses – an almost 20,000% return on investment for its financial backers. While those on a set salary must have been kicking themselves for not taking equity, most gained their investment back eventually through the film’s many sequels.

5. McDonalds Healthy Meals and McCafe

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In response to growing health concerns and new dieting trends, McDonalds decided in the early 2000s to incorporate healthy options into their combo meals and kid’s Happy Meals. While health boards and families were impressed, business analysts weren’t so sure about the move. With worries of McDonalds losing its image – after all, who goes to McDonalds to get apples or a coffee – many investors voiced their concerns to McDonalds executives and board members.

The move towards choice and health turned out to be a massive success for McDonalds, separating them from other fast food chains that were seen as unhealthy. It’s rare for a major business to make such major changes and still remain intact.

6. Zappos.com

Source: http://farm4.static.flickr.com/3189/2697033778_07da49915c.jpg

Zappos is an online shoe store built on a business model that’s completely foreign to most CEOs and investors. Put the following three characteristics on a Powerpoint slide and try to pitch it to investors, and see how far you get:

1.  Free shipping, even on returns.

2.  Not a 30-day return policy, a 365-day return policy.

3.  24 hour, 7 day, 12 month customer service.

Most investors would write it off as impossible and impractical, but Zappos.com has made it work. The online shoe store bases its entire operation around customer satisfaction, providing everything from high-end shoes to sandals with instant free shipping. While initially unsuccessful and trash-talked by industry leaders, the company grew to become the largest shoe store in the world, acquired for $1.2 billion by Amazon in 2009.

Effective advertising is all about one thing: trust. The public is naturally skeptical of big brands and corporations. We hear about PR disasters and business meltdowns on the news, and sometimes it requires the trust of a well-known celebrity to put a good brand back in high standing.

While some celebrity endorsements are incredibly effective, other are downright shameful and completely disastrous for business. These seven celebrity endorsements aren’t all a case of poor marketing strategy, but for every one hindsight disaster there’s another that was just a bad business decision, right from the start.

1.  Mikhael Gorbachev’s Louis Vuitton Ad.

Source: http://graphics8.nytimes.com/images/2007/11/05/business/05vuitton.600.jpg

When you’re the ex-leader of what was once the world’s most powerful communist nation, the last thing you’d be expected to do is an advertisement for high-end luxury products, right? While Mikhael Gorbachev might be best remembered for his efforts to liberate the USSR and increase transparency, this handbag promotion is beyond weird.

First, there’s the Berlin Wall in the background, a major political problem during Gorbachev’s term. Then, there’s the entire advertisement itself – who wants to associate their expensive designer handbag with the USSR anyway? Weird, confusing, and for Russian readers, slightly subversive.

2.  Michael Phelps’s Marijuana Controversy.

Sports heroes are always a sure-thing for major companies. From Michael Jordan’s million-something product endorsement deals and the commercial army of Tiger Woods branded sports equipment, major companies like Nike and Reebok have been using athletes to brand themselves for decades.

However, every once in a while, things go horribly wrong. After walking away with a record 8 medals from the 2008 Beijing Olympics, Phelps posed for photos beside the one possession no sportsman wants the world knowing about – their bong. Two of his $5 million endorsement deals withdrew immediately, including food giant Kellogg’s.

3.  OJ Simpson’s Hertz Ads.

Source: http://www.upgradetravelbetter.com/wp-content/uploads/2009/12/oj-simpson-hertz.jpg

In the 1970s OJ Simpson was remembered for his amazing speed, truly awesome football ability, and pretty friendly demeanor. Nowadays, he’s more well known for high speed car chases and being convicted of but not charged with murdering his ex-wife and her lover.

While Hertz’s decision to advertise the speed of their service with a guy who’s known for outrunning police wasn’t a good idea, you’ve got to give them some credit. The Hertz-Simpson professional relationship ended in 1992, a year before the never-ending OJ media saga began. Now controversial, this advertising series certainly wasn’t Hertz’s weirdest – a 1960s commercial showed Hertz employees dressed in Nazi-style uniforms.

4.  The Olsen Twins and “Got Milk?”

Let’s make a list of things that the public associated milk with. Strength? Check. Nutrition? Check. Growth? Check. Now let’s make a list of things that the public associated the Olsen twins with in 2005. Eating disorders? Check. Poor health? Check. Cigarettes, drugs, and generally poor living? Check.

The “Got Milk?” advertising campaign has been one of the most successful in history, but the Olsen Twins choice nearly caused the entire campaign to fail. Luckily, the US Milk Board dropped the advertisements when news of the twins’ eating problems became public, avoiding what could have been an absolute business disaster.

5.  Michael Jackson’s Disastrous Pepsi Ads.

It’s one thing to have a disastrous advertising campaign that destroys part of your business. It’s another thing altogether to have your advertising campaign almost kill the King of Pop’s career. In 1984, Pepsi hired Michael Jackson, at the time the world’s biggest star, to be their official spokesperson. Millions of dollars changed hands, Pepsi readied themselves for an all-out attack on Coke, and Michael Jackson cleared his schedule to film a concert-style advertisement for Pepsi in Los Angeles.

Halfway through filming, an on-stage firework exploded and Michael’s hair caught on fire. He ended up suffering third-degree burns to his scalp, forcing him out of touring and Pepsi to forget about the advertisement. The campaign is remembered as one of the advertising world’s biggest disasters, costing Pepsi $1.5 million in legal settlements and severely hurting their business.

6.  The Flintstones and Winston Cigarettes

Source: http://www.moviedup.com/wp-content/uploads/2009/11/flint.jpg

Advertising isn’t a difficult game for today’s major cigarette corporations. The vast majority of their user-base is pre-built, acquired through long-term branding efforts and suckered into lifetime sales through addiction. However, back in the 60s and 70s, cigarette branding campaigns were common, particularly on major TV shows.

The Flintstones, one of the biggest cartoon series ever, was the perfect platform for Winston to advertise on. Aimed at blue collar families and young children, the unethical advertising was forever tied to The Flintstones, even when Hannah-Barbera cut it out of the series entirely. While disastrous for Hannah-Barbera’s child-friendly reputation, the campaign was a major success for Winston.

7.  David Beckham’s iPhone Worries

Source: http://www.dailymail.co.uk/tvshowbiz/article-1189015/Dont-let-sponsor-Motorola-catch-using-iPhone-David-Beckham.html

Football star David Beckham is a bankable celebrity for major brands, pulling in millions of pounds a year for Pepsi, Giorgio Armani, and Adidas. In 2009 Motorola decide to bank on Beckham’s reputation and public trust for a series of advertisements for their brand new Aura mobile phone. Launched with a price of over £1200, the ads obviously needed to be effective in order to make the phone a hit.

Luckily, they worked. Well, that is until Beckham was spotted by newspaper cameramen on his Apple iPhone at a restaurant. Needless to say, the pictures made the front page of most tabloids, and Motorola were forced to recoup their losses and recover from what turned into a business disaster.

Portsmouth have until 4pm tomorrow to lodge the statement-of-affairs document demanded by the high court. The papers will be vital in determining whether the club can convince the court that it should avoid being sent into administration or business liquidation.

The latter would mean that Portsmouth would no longer exist and this season’s league results would be expunged. The petition was brought by Her Majesty’s Customs and Revenue, who are demanding £7.1m in unpaid VAT.

The SOA was demanded by the registrar, Christine Derrett, so a picture of Ports mouth’s financial position, which will include future income streams and commitments, can be understood by HMRC and the court. The papers are being drawn up by Vantis, the accountants employed by Ports mouth. Once provided they will be examined by HMRC and the judge before the hearing, which is on 1 March.

The SOA will include the club’s creditors. Portsmouth owe around £30.5m to the former owner Sacha Gaydamak – though beyond last month’s unpaid £9m instalment the remainder is not due until 2012 – plus at least £17m to the current proprietor, Balram Chainrai, for loans he sourced to the former owner Ali al-Faraj. When interest accrued on the loans is taken into account the total owed to Chainrai may rise to £22m.

Portsmouth’s total liability to HMRC, thought to be around £12m, will be included in the SOA. It is understood the club place their total debt at between £50m and £55m.

One of Manchester’s trendiest bar-restaurants is to close – just two months after bosses said it was to get a new lease of life.

Ithaca boasted clientele including music stars Jay-Z, Kanye West and Victoria Beckham – but documents filed with Companies House late last year showed parent firm Ithaca Manchester Ltd had gone into voluntary business liquidation owing £1.9m.

A message sent to customers said: “Thank you for the support, guidance and encouragement you have provided us. We will miss you all and perhaps one day our paths will cross again when we resurrect the Love Ithaca brand.”

Ithaca, founded by Arnie Hira and his brother Manoj, opened in 2008 after a reported investment of £4m and was aimed at Manchester’s high-flyers.

Documents showed the parent company owed £1.1m to NatWest bank and more than £320,000 to HM Revenue and Customs when it went into liquidation in November.

Shares in London Town, the Norfolk-born pub company, have fallen by a third to 0.5p after press reports suggested the group was set to go through a pre-pack administration process.

The Financial Times said the 407-strong pub group could go into administration – and immediately out again – as early as this Thursday, the day its shares come off AIM, the small company stock market.

London Town established itself as a pub operator three and half years ago when it bought nearly 170 pubs from property developer Jack Petchey, backed by a combination of loans, deep discounted bonds and a share placing. It has been involved in helping larger operators, notably Punch Taverns and Enterprise Inns, turn round closed pubs.

Last September, when it reported half year pre-tax losses of £2.6m, the group said it was hoping to employ 300 pub ‘night watchmen’ to guard boarded up pubs in order to prevent them being vandalised.

According to its interim results report London Town’s pub assets are financed by a combination of bank debt, deep discount bonds, short term loans and shareholders’ equity. At the same point its bank debt at 28 June 2009 amounted to £82.2m.

The group’s shares have slumped from a high of 97.5p 12 months ago to today’s 0.5p level.

We all love to see great businesses succeed. From consumer-friendly business giants to rags-to-riches companies, it’s refreshing and reassuring to see that sometimes a great product can find an audience. Unfortunately, for every major business success, there’s a long line of failures. From misguided marketing attempts to downright bad business ideas, the laundry list of failed businesses is miles long and distinctly grim.

However, there’s still some humor to be found in some, along with a healthy dose of business sense. If you’ve got a burning desire to start a business and some major ambitions to raise venture capital, let these three business mega-disasters serve as a model for what not to do:

1. New Coke

The Coca-Cola Company certainly aren’t short on brand recognition or marketing power, but their marketing mistakes in the 1980s have been recorded in just about every modern business handbook since. New Coke, while not a new product itself, was an updated version of Coca-Cola. When Coca-Cola rolled out New Coke in 1985, regular Coca-Cola disappeared, never to be seen again until 1992.

Of course, rival Pepsi launched into the drink with new marketing campaigns as soon as it was launched, and public reaction became overwhelmingly negative. Coca-Cola relaunched their classic flavor in 1992, and discontinued New Coke very quickly afterwards. While the Coca-Cola Company are still going strong, New Coke is remembered as one of the most visible and clear business disasters of the 20^th century.

2. Webvan.com

The late 1990s certainly weren’t a bad time to be a technology entrepreneur. Venture capital was readily available, and young technology entrepreneurs were moving their businesses forward at a rapid pace. Webvan, a delivery-based startup company, was enjoying a wide and dedicated consumer base across the United States, and was poised to become one of the dot-com era’s big winners.

Of course, things didn’t quite turn out that well. Webvan’s rapid expansion came with some heavy financial costs, and the company quickly burned through over $1 billion worth of startup capital in two years. In 2001, the company declared bankruptcy, and donated thousands of non-perishable food items and company equipment to families across the USA.

3. Ratners Group

Gerald Ratner never expected his self-depreciating jokes at a private dinner to bring down his company, but through a combination of intense press reporting and consumer disapproval, his remarks managed to shave over £500 million from his company’s annual revenue. What was his horrendous business offense? None other than calling one of his company’s products “crap”.

Ratner was quickly fired from his position as CEO of the billion-pound company, and saw his entire fortune disappear within weeks. While now successful in other ventures, Ratner’s comments have achieved such notoriety that business gaffes are often labeled “doing a Ratner”.