With over half of Gen Z using TikTok daily, it is little wonder that their growing presence in the workforce is seeing more businesses use the platform.
Going viral online used to be good for only a feeling of accomplishment and fifteen minutes of fame, but now businesses can meaningfully grow from social media success.
When this happens, many businesses are surprised by their success and can struggle to keep pace and turn new revenue into meaningful growth.
Does going viral on TikTok help or harm a business?
The impact that TikTok has on a business largely depends on how a business is using the platform and whether they are prepared for the new audiences the videos may reach.
While some businesses may create dedicated adverts for TikTok, these videos are labelled differently by the platform and tend to be swiped past by most users.
The more successful businesses create content that fits seamlessly alongside the other videos displayed on a user’s ‘For You’ page.
These videos avoid the sleek trappings of traditional adverts and instead embrace the cultural zeitgeist already present on the platform.
Memes, recreations of scenes from beloved movies and elaborated dance routines are par for the course for this content and everyone from baristas to barristers seems to be getting in on it.
The algorithm by which TikTok decides to promote videos to users is often poorly understood by users, but the result is that they may be exposed to content beyond their typical interests or regional area.
Pairing these videos with a link to a website or online store page can have a tremendous impact on a business’s revenue, as they are broadcast into the palm of someone who would otherwise never have heard of them.
A survey of 500 business owners conducted by money.co.uk found that 67 per cent of small retail business owners experienced a surge in orders after a video went viral on TikTok.
Businesses that are more reliant on footfall may not have as quantifiable data on the impact of virality, but also benefit from the increased brand recognition.
While this success should be celebrated, many businesses are ill-equipped for their sudden good fortune.
Of the business owners surveyed, 42 per cent ran out of stock following a viral video and 27 per cent faced staffing problems and cash flow disruption trying to keep pace with heightened demand.
A worrying 91 per cent admitted to struggling with fulfilling orders after their success.
While these are the challenges of a successfully viral TikTok, there is also the risk that a poorly considered social media post can harm revenue in equal measure.
How can an accountant support a business going viral on TikTok?
TikTok virality brings in more revenue and higher demand, so knowing how to handle both is vital for turning this success into long-term growth.
According to the research, 52 per cent of businesses turned to credit cards and 30 per cent to loans and external finances to manage the added pressure of virality.
Credit cards and external financing are useful growth strategies, especially when more cash flow is needed quickly, but these should not be managed without expert advice.
Speaking with a professional team of accountants can help a business manage any sudden upturns or downturns in revenue.
Ideally, a conversation about financing will be had before any new marketing campaign begins.
This allows financial forecasts to be created, highlighting the current economic trajectory of the business and what is likely to happen should the strategy succeed or fail.
Through this, challenges with stock, staff and cash flow can be identified ahead of time and planned for accordingly.
This is not to say that you should hire ten new employees the day your TikTok account goes live, but having plans in place to dynamically adjust to revenue changes is the sign of a successful business.
Our team are here to support your business as you embrace new and exciting ways of tackling the current economic challenges.
We can help you to invest the increased funds back into the business so that your success can be sustainable rather than a short-lived celebration.
Changes to revenue can also alter your obligations with different tax and regulatory requirements applying when certain thresholds are reached.
Compliance issues can put a damper on any success, so we will make you aware of any risk and how to address it.
