In the News: How would a TikTok ban affect your business?

[Pesso]

Hey Newsies,

Today we’re looking at an article from Forbes reporting on how the passing of a bill banning the use of TikTok in the United States can affect small business owners. I’d love to hear your thoughts and experiences on this!

Forbes: How the TikTok Ban Leaves Small Businesses ‘Devastated’

The article explains that Congress has passed a new bill to essentially ban the social media app TikTok in the US, which can have a massive impact on small businesses. The bill says that within 6 months, the parent company ByteDance must either sell TikTok to a US entity, or shut it down in the US. This is due to security concerns about the app data potentially being used by China. 

Some small businesses exist only on TikTok, making their money directly through ads, views, and sponsorships (influencers and affiliates absolutely count as businesses). Even more traditional businesses use it as a platform for marketing and visibility, as well as making a majority of their sales directly through the app. Some hold live sales events, others just link out to their ecommerce page for customers to quickly and easily buy their offerings.

Getting rid of the platform in the US has the potential to completely destroy some of these businesses, and severely limit sales for many more. They are trying to appeal the bill, calling it unconstitutional. So we have to wait and see if it goes through or not.

Some other countries that have fully banned TikTok are Afghanistan, China, India, and Nepal, with others only banning use of it on government issued devices for federal employees. 

We didn’t use TikTok for my ice cream shop, but we relied extremely heavily on social media like Instagram and Facebook. I posted at least once every single day that we were open, both standard posts as well as stories. It really made a difference and brought in more new customers and kept our current customers coming back, since our posts with new flavors and offerings kept us top of mind and social feed. If one of those apps were banned, I’m not really sure what we would have done. I might have searched for the next big app and moved my posts there, or I might not have wanted to put in the effort to learn something new, since I didn’t start to go on TikTok even when it was getting big. 

What’s your perspective:

• How do you use TikTok for your business?
• How would a TikTok ban affect things for you?
• What would you do if the ban goes through and TikTok shuts down?

Can’t wait to hear your thoughts!
Pesso

This article is for informational purposes and does not constitute legal advice. For guidance or advice specific to your business, you should consult with a qualified legal professional.

[maxpete]

GREAT reminder about not solely relying on one channel, especially something that you don't own.

[HC_Charlie]

I have never used TikTok, so it wouldn't affect my business. I've never been an early adopter and with the cautions about potential spying from overseas corporations, I never wanted to try it. But I recently saw a commercial that was trying to gain support against a ban; it showed a person who said they made big $$$ using it for their business. I was blown away, it was a ton of money, and it made me want to jump on and start using it! But perhaps that large amount is not the usual amount of income seen by most users.

And there always seems to be the "next big thing" in social media and online platforms for gaining followers and business income. I'm not sure how a small business can keep up if they are not tech savvy and into following new media news.

[Pesso]

Thanks for sharing, @HC_Charlie -- you never know! It's probably not the norm, but there's definitely some money to be made, otherwise folks wouldn't be on it as much as they are now! 

It's absolutely hard to run a business in this day and age -- having to be so on top of so many new things-

[VanKalkerFarms]

As for my business it will have 0 effect.  as for my personal free time it will be detrimental, TikTok and YouTube are top of my viewing.  There are so many good creators on TikTok 

[Doran]

Same! 

I think I will be more productive. 

How I heart TikTok but just haven't figured out a way to be successful there business-wise.  I don't know that I want to.  

But I'll be devastated to lose it as a resource.  I've learned a lot of great business books, tips, etc from TT and travel planning is great with the app.  

[TheRealChipA]

Hmmm.. Time for the Boomer to weigh in here.  First, to quote your quote:

”45% of the SMBs on TikTok consider it critical to their existence. On average, using the marketing and shop functions increase a business' revenue by 88%. With over 7 million businesses now using TikTok and TikTok Shop, the report estimates the platform has contributed $24
billion to the U.S. economy.”

45% consider it critical to their business?  That’s worrisome, as has already been said by others.  Any business model built on one sales and marketing channel is bound to fail anyway,  Especially in our world of instant gratification and fickle online users.  88% just from using TikTok?  That sounds like one of those things that fits into the “lies, d*%n lies, and statistics.”  Yes, maybe their sales increased a lot, but I have to wonder about such a claim.

Anyway, like everyone else has said we use social media as a tool for outreach, marketing and communication.  Not just one tool but as many as we can.  If one fails, or is outlawed, then so be it.  We move on. Remember when Facebook was going to save the business world and give us all instant revenue boosts, consistently?  Or when we said the same about Google search? Whatever the tools are at the time is what we will use.

One parting shot.  I’m betting — but can’t prove — that most of those businesses who consider TikTok critical aren’t bricks-and-mortar businesses.  I’d bet that most of them are influencers, or travel blogs, etc.  Even they should diversify, whether or not TikTok is actually banned in the US.

I’m not a hater though I do handle social media with kids’ gloves these days.  For all its potential for good it seems to mostly devolve into actual bad over time anymore.  I’ll use it when it works for Piper’s but if it all went away I wouldn’t shed a tear, either.  Such is life.

But, hey, what do I know? (And all the people said “ok, Boomer.” Ha)

[LeahK]

Okay boomer 🤣

I took the bait @TheRealChipA 

On a serious note, boomer jokes aside, really appreciate your perspective. Totally agree with your point that "Any business model built on one sales and marketing channel is bound to fail anyway..."  Especially when it comes to this insane era of social media overload. TikTok found its place in the market for now, but think about all the failed video platforms before it -- TLDR. diversify your social presence for the WIN.

[DinaLRosenberg]

For us isn't our only sales channel but has quickly because a viable one. The way I see it is we can only control what we can control.  We have never had a "wait and see" approach to our biz. When we closed for Covid, many of the b-owners around us were waiting to see what happened- they quickly realized no one was coming to "save us". We quickly pivoted to Instagram lives- going live daily in order to stay top-of-mind with our customer base. We had ZERO idea what we were doing- we just did it. The same happened with TT.. I remember watching Gary V talk about it and say "if you get on TT you will get more attention than you deserve".. we just figured- screw it- let's try.

If it goes away- well- we'll pivot again.. that's the beauty of small business and the entrepreneurial journey- SPEED.

[Pesso]

Thanks for sharing this perspective, @DinaLRosenberg !

I'm definitely on the fence here and agree with you. Yes, in theory, you shouldn't have all of your eggs in one basket and should diversify, but if you are diversifying and a massive portion of your sales are coming through one channel, I absolutely say to lean into that channel! 

Most traditional businesses have 90-100% of sales happen in-store & in-person (like my old ice cream shop) -- and some of it cannot be diversified without a radical change in business plan. That lack of diversity can lead to risk, just like relying on a social media app. Fires, power outages, bad landlords, hurricanes, floods, changes in regulation -- all of those probably have a higher likelihood of happening than an app being banned. Some business models are reliant on a single channel, and that's ok! Is it better to diversify, of course -- but it's not the worst thing. 

[DinaLRosenberg]

It would be pretty brutal for us. To date we have 260k followers on TT and we sell between $40-60k per month on TikTok shop. TikTok shop has really helped us manage the slow down of in-store purchases and it drives repeat customers to our website.

I think it will be months (years) before TT actually shuts due to litigation and I do think that TT will work something out with the US government should it get close.. but it's super scary for sure.

I'm sure if the ban goes through, another platform will take it's place (I think something new- not FB or Insta).. In the meantime we're still putting our time and attention into TT and we keep going hard until we can't anymore.

[Pesso]

Thanks, @DinaLRosenberg !

That really is a massive following and gain, and you should be incredibly proud of yourself and team for making that happen! 

I think you're right, it'll take a while and something else will pop up, but it's still a hard thing to have to change and rebuild a following, and learn a new algorithm. 

Heck yea -- keep it going until the walls fall down!

[LeahK]

OOOOF! what a good question @Pesso!

I do have TikTok, but I do not use it for business purposes.  It's sole purpose was to teach myself how to dance (shuffle) during Covid.

And yes, there are embarrassing videos of me dancing on the internet -- and I will not be sharing my tiktok handle for the exact reason. 😂  

[Pesso]

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