Entrepreneurs are genuinely afraid that TikTok will be banned as they will lose a powerful tool for business growth.
TikTok has become something of a controversial topic of late, with legislators on Capitol Hill raising concerns about security measures relating to Americans’ private data on the app, questioning it’s CEO Shou Zi Chew, and the state of Montana even legislating for an outright ban this past March.
But some U.S. businesses fear a ban on TikTok could adversely affect their income generation potential.
Emily Swift, a former Connecticut-based photographer, has a lot riding on TikTok’s ability to remain accessible and legal in the U.S.
She now runs a business called Darkslide Film Lab, which specializes in manually scanning and developing film in a traditional black-and-white darkroom. Alongside her film lab work, Emily also posts TikTok videos showcasing the film development process. When one of her videos goes viral, it leads to a flood of client orders for her and her sole part-time employee, resulting in an additional monthly revenue of over $6,000, as reported by documents reviewed by CNBC Make It.
Emily Swift and her fellow small-business owners find themselves caught in the crossfire. They express worry about the potential consequences of a TikTok ban, as it would greatly impact their businesses. Swift states, “I really hope that doesn’t happen, because I’ll be screwed.”
The impact of tiktok on small business revenue generation
Swift’s business goes beyond a woman and a phone camera: she and her sole part-time employee handle the processing of 30 to 60 rolls of camera film per day, sent in by customers, a task that requires skilled expertise. This process typically takes around six hours, leaving the rest of the day for Swift to create videos.
In March 2021, when Swift was unable to secure photography clients, she utilized an unemployment check to launch Darkslide. Much to her surprise, she achieved profitability in the first month, thanks to her initial viral video showcasing the development of film from a vintage camera owned by a customer’s grandfather.
“I’ll always remember thinking, ‘Oh my god, all we had to do all this time was just film what we do every day,’” recalls Swift.
Despite the uncertainties surrounding TikTok’s future, Swift remains committed to the platform and is uncertain about alternative options if it were to be banned.
“On TikTok, I can be myself, anytime, anywhere, any day, and my followers will embrace that,” she explains. “If I were to do the same on Instagram, it might come across as unprofessional because people expect the best there.”
The montana connection
Small-business owners in Montana, which as mentioned banned the app this past March, view this unfolding drama as a cautionary tale for their counterparts across the country. Taylor Reed, the owner of Reed Painting based in Kalispell, Montana, initially dismissed the possibility of such a ban, but he was taken aback when Governor Gianforte signed the bill.
Reed established his house painting business in April 2021, seizing the opportunity presented by the slowdown in subcontracting work due to the Covid pandemic. A year later, his company achieved its first viral TikTok video, showcasing a remarkable before-and-after transformation of a home.
The online popularity translated into brand deals with renowned companies like Sherwin Williams and Benjamin Moore, generating approximately $17,000 in revenue from TikTok presence alone last year, excluding earnings from clients acquired through social media.
While Reed remains optimistic that TikTok will continue to be available in Montana, citing expert testimonies that Google and Apple cannot enforce app filtering on a state-by-state basis, he recognizes the importance of not solely relying on a single platform. Even though TikTok facilitates organic customer reach, he believes it serves as a valuable wake-up call for small-business owners to diversify their presence across various platforms and enhance their marketing strategies.
Reed concludes that adapting to the evolving landscape is crucial for businesses, emphasizing the necessity to embrace versatility and explore other avenues for growth and customer engagement.
Why congress wants to ban tiktok
The main concerns of U.S. lawmakers revolve around a Chinese intelligence law that requires organizations and citizens to provide requested data for national security reasons.
This law raises concerns about the types of data TikTok may be compelled to provide, including email addresses, phone numbers, search and browsing history, phone contacts, photos, and uploaded videos.
There is currently no public evidence of the Chinese government requesting data from TikTok or TikTok complying with such requests. It remains uncertain whether TikTok would be obligated to hand over data on U.S. consumers, as the company claims to store it on U.S. servers.
The lack of transparency is a significant concern for American lawmakers.
TikTok’s security concerns are not unique, according to TikTok CEO Shou Zi Chew. Similar issues apply to other tech companies like Amazon, Alphabet, and Meta, which collect data for targeted advertising.
However, American legislators argue that these companies are less likely to be compelled to share data with a foreign government.
The likely outcome of Congress’ deliberations is either a nationwide ban, which would face First Amendment challenges and prolonged legal battles, or stricter regulations, says Aram Sinnreich, a professor at American University.
As of now, no regulatory proposals have gained significant traction in Congress.
What the future holds
Montana serves as an illustrative case when considering the potential consequences of a TikTok ban or regulation for small-business owners. Recently, Governor Greg Gianforte signed a bill prohibiting Google and Apple’s app stores from offering the TikTok app starting in January 2024.
In response, TikTok filed a federal lawsuit against Montana, claiming that the ban infringes on its First Amendment rights to freedom of speech. The app vehemently denied Montana’s allegations of surveillance and argued that the state lacks evidence to support its claims.
This fight, backgrounded by rising tensions between the U.S. and China on other global matters, looks set to continue indefinitely or until a solution is found that is acceptable to all parties concerned. Meanwhile, entrepreneurs will look cautiously at any progress made that can alleviate their fears…
