TikTok boasts an impressive 1.12 billion monthly active users globally, with approximately 34 million videos uploaded each day. Despite this vast pool of content, some of the business advice circulating on the platform can be misleading and potentially harmful to entrepreneurs.
To safeguard businesses and entrepreneurs from misguided guidance, the experts at Liquidation Centre have meticulously reviewed prevalent business advice found on TikTok. Their goal is to prevent costly missteps that could jeopardize your entrepreneurial journey.
Why Caution is Essential When Following Business Advice on TikTok
The simplistic nature of TikTok clips, combined with a lack of regulation, creates opportunities for misinformation to permeate business advice. Consequently, relying on TikTok for business or financial strategies can be risky. Here are some popular yet potentially flawed pieces of advice circulating on the platform.
1. The 90/10 Business Model: Is It Right for You?
The 90/10 business model posits that 90% of a company’s revenue is generated by just 10% of its customers. This model encourages businesses to focus marketing and sales resources on this lucrative segment. While this approach can indeed enhance profitability, it is not a universal solution.
Businesses must carefully identify the appropriate tasks, products, and customer segments to concentrate on. Misplaced focus can lead to negative financial outcomes, oversimplifying complex issues and causing missed opportunities. Therefore, thorough analysis is crucial to determine whether this model aligns with your specific business needs.
2. Leveraging Competitor Reviews: A Double-Edged Sword
Utilizing competitor reviews may seem beneficial, as businesses strive to understand their target market. These reviews can highlight both strengths and areas for improvement. However, caution is warranted.
Competitor reviews are susceptible to manipulation, including fake and paid feedback, which could distort your understanding of consumer sentiment. Instead, engage directly with your target audience for a clearer and more accurate assessment of market needs. Prioritize foundational consumer research to craft a robust strategy. Remember, neglecting market research is a leading cause of SME failure.
3. Beware of ‘Get Rich Quick’ Schemes
TikTok hosts a plethora of ‘get rich quick’ tips from influencers. Approach these suggestions with caution, as many lack practicality and may incur significant costs.
For instance, some influencers advocate outsourcing to countries with lower labor costs as a quick cost-cutting measure. While this may offer short-term savings, the potential decline in product quality can damage consumer satisfaction and tarnish your company reputation. Additionally, ethical considerations surrounding worker treatment in developing countries could negatively impact your business image. The immediate benefits of such strategies are often overshadowed by long-term harm.
Richard Hunt, Director at Liquidation Centre, emphasizes the importance of prudent decision-making:
“Every business is unique, with distinct goals and challenges. Generic advice from brief clips can mislead and harm your venture. In business, a tailored approach is vital.”
“Consult credible sources and proven entrepreneurs. With up to 90% of start-ups failing, strategic planning is crucial. A solid business plan and comprehensive understanding of your target market can lay the groundwork for success across all industries.”
“As misinformation proliferates and platforms like TikTok wield significant influence, verify your information. Ensure it is relevant and credible within your industry. Carefully consider the implications of any procedural or strategic changes. In today’s challenging economic landscape, it is essential to operate your business with sound logic, underpinned by strong strategies and thorough market research, rather than relying on generic TikTok tips.”