MOM-enomics with Booth Parker, CPA

When operating online, what does a small business owner actually own? Social media is a powerful tool, but it can change or be taken away at a moment's notice.

MOM-enomics will go on summer break after our June 3 episode, with plans to return in August.

Listen to the Carolina Women's Collective Podcast, also hosted by Booth: https://carolinawomenscollective.com/podcast

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  • (00:00) - Talking About Small Business
  • (02:14) - What Business Platforms Do You Actually Own?
  • (05:48) - Direct Sales and Multi-Level Marketing
  • (07:32) - When They Break Your Funnel
  • (08:38) - Diversify Your Business
  • (11:30) - Listen to Booth's other podcast, the Carolina Women's Collective Podcast

This podcast is produced by Rooster High Productions.

Creators & Guests

Host
Booth Parker, CPA
Financial guru by day; domestic diva by night and sharing it all in between.

What is MOM-enomics with Booth Parker, CPA?

Real moms. Real mom financial issues. Real moms in business. Real stories. I am Booth Parker. A CPA, wife, and mom that loves all things home and family. In this podcast, I talk all things money for moms, families, and small business. From tips to ideas to info you just need to know, I break it down so moms can apply it to their own families and businesses!

Ownership in Small Business
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Talking About Small Business
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Booth: Today on the podcast, we are going to change gears a little bit from what I've talked about the last couple of weeks, and we are going to talk about small business. So today's topic can be applicable to the solopreneur working from their dining room table with the side hustle to the big business owner that's maybe a little more established and is already growing.

So what I want to talk about is maximizing what your business owns and controls and minimizing what your business doesn't own or control and is also dependent upon.

So typically when we think about what a business owns, it's assets. You think of the dorky accounting thing with fixed assets that are depreciated. So you may be [00:01:00] thinking equipment or company vehicles or all of those kind of things. And while those are important to a business, they're not exactly the thing I'm referring to today when I talk about what your business owns.

So social media has allowed a lot of businesses to grow without a lot of capital and funding. And that is a really great thing. It has created opportunities for small businesses, especially women and people doing a side hustle. It has created a lot of opportunities that did not exist 20 and 30 years ago.

But you've also probably heard the potential, all the talks, et cetera, about a potential ban on TikTok. And a lot of people have built a business on TikTok, and TikTok has become their livelihood. It's their family income, or Side hustle for their family to support their, their budget and things of that nature.

And so, [00:02:00] completely relying just on TikTok for their business has them probably in a little bit of a panic because what happens if TikTok does get banned?

But what if all social media platforms went away? What then?

What Business Platforms Do You Actually Own?
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Booth: So this is where you need to think about a way that your business could continue operating autonomously without those platforms. Because after all, you do not own the social media platforms.

So regardless of how big your presence is or your number of followers on social media, you do not yourself control or own those platforms.

And that also kind of creates the, I call it the never ending rat race. The algorithms are changing this, that, and the other. You have no control over these things, so you're constantly having to adjust how those change to keep your business in front of, um, your customers and potential customers.

But your business does own its website. You own the domain, you own the website, you own the email list you create, um, text message [00:03:00] lists are becoming a more common thing as well. So your business does own things like that and has control over how they are delivered to your customers.

And one thing that's an issue for a lot of businesses on social media platforms is those algorithms, when you're trying to push people away from the social media platform, say to your website or somewhere off of that social media platform, it negatively impacts your reach and those kind of things in that platform.

Uh, the social media platform doesn't want you sending people away. So a lot of businesses are maybe hesitant to send people out of social media because it may affect their presence within social media.

So that one's definitely a catch 22 as I call it because you're kind of damned if you do and damned if you don't, right?

A lot of businesses have created stores within the social media platforms, especially on TikTok. But that's where I go back to the question, what happens if the platform goes away? Have you established enough of a [00:04:00] presence with your website? Have you built enough of an email list?

Booth: Are active with it, all of these things that you have a presence separate from your one on the social media platform.

So imagine this, and sadly I've seen it happen, you have grown a huge following on a social media platform and you have this really great presence and you've created a store within the platform and you're selling products on this platform all the time and you're making good money and supporting your family and all of these super, super things that have happened because of social media.

And then all of a sudden, your page gets shut down. It happens for various reasons. Sometimes they're hacked. Um, sometimes they're reported and then the platform takes them down. Sometimes you get them reinstated. Sometimes you don't.

So, if something like that happened, do you have a way to still sell to your customers? And do you have a way to contact those customers? Let them know that your social media platform is no more. Please check out the website. Things [00:05:00] like that. I've really learned recently that a lot of people with big social media followings actually don't even have an email list or a website.

So they're completely dependent on that social media platform for their business.

Using social media platforms is a great way to grow. It is a great way to find customers, find new customers after you've already established your business, all of those kind of things, but you want to make sure that it's not your own. Only way, it can be a great growth strategy, but then you still want to have website, email list, some kind of contact that you yourself with your business owns.

So as the old saying goes, you don't want to put all your eggs in one basket. Especially when that basket is not owned or controlled by you, and neither is the chicken in this kind of situation.

Direct Sales and Multi-Level Marketing
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Booth: So let's look at a completely different kind of example. Maybe your business isn't all on social media. So what if, um, the direct sales and multi level marketing type [00:06:00] businesses have become very big in the last, you know, decade plus?

It's been a great avenue for women and for moms to have some kind of side hustle. I'm not going into all the opinions people have about some of their strategies and stuff in this situation. I'm just talking about it from the approach of the business owner.

So a lot of these people that do the direct sales, They make good money and they're able to fulfill their family's budgets, they're able to save for college and all these things. So there's a lot of people doing these type of businesses and they have grown dependent on the income from those businesses.

So generally they begin with either you put some money in to sign up or you have like a minimum product buy you have to get to start with. But it's generally not a big investment to get started in these, which also makes them appealing. And then, of course, the more you sell, the more you make, the more people [00:07:00] you sign up under you, the more you make, and you can spend years creating great relationships with customers that regularly buy from you. I mean, the people that have been doing it for a long time and have been very invested time wise, they have greatly grown these kind of businesses. They have a big customer list, that email list. Maybe it's in the form of an email list.

Maybe they've even built their own website. They may have a lot of people under them that are selling that is generating income for them. So the growth can get rather large and so can the income with some of these direct sales.

When They Break Your Funnel
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Booth: But what happens when all of a sudden, that business that you're selling the product for in your direct sales business, what if they go out of business or they eliminate the direct sales channel? Meaning you needing to be there to sell the product and make your commission.

So your business is completely dependent on their product to sell. And if they go out of business or [00:08:00] do away with direct sales, then you go out of business as well.

So if your family has become dependent on that being part of their income stream to pay the bills and things of that nature, it is going to create a lot of stress in the family. It would be very similar to someone getting laid off from a full time nine to five if your family is dependent on that income.

So like I said, you've probably made some really good relationships over the years, and you probably have a clear contact list, whether it's in form of email or text messages or whatever, and that will serve you at this time because you can still communicate with all of your customers to let them know that you're no longer selling this product.

Diversify Your Business
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Booth: But without product to sell, how do you plan to sustain your business and continue your income? So it's great you can communicate with the customers. You still have that good customer service going, but you no longer have anything to sell and actually make income off of. So think about it if you go to a store like Ulta or Sephora.

They [00:09:00] sell lots and lots of different products that are made by different brands. So if one of those brands either went out of business or they just decided not to sell through that store anymore, the store would still be able to have a viable business because they're not completely relying on that one brand's product as their only offering to sell.

So always prepare for the worst and hope for the best. Diversify your business, what it sells, and how it sells.

You want to have the ability to pivot on a dime, so to speak.

So if your business is completely reliant on social media to sell, ask yourself, what would you do if you woke up tomorrow and that social media platform was gone? Likewise, if your business is reliant on one product or one brand's products to sell, ask yourself the same question. If you woke up tomorrow morning to an email that they were going out of business or they were [00:10:00] no longer going to use direct sales, what would you do for your income?

What else could you sell? Do you have a service you can offer? Ask yourself what you would do to continue your income, if that were to happen.

It's actually easier to, you know, ask yourself these questions right now, then waking up tomorrow and the social media platform is gone or waking up tomorrow. And you have an email that you will no longer be selling this product anymore, and it just ends. Instantly, just like that. Right now is the time to ask yourself those questions so that you can maybe start making a plan to deal with them if it were to ever happen.

It's a great brainstorming exercise to think about ways to diversify your business and your income. And the great thing is, is, is usually when I see people do this exercise is that they actually create growth channels for their business. When they're diversifying, they're creating multiple streams of income.

They're not just reliant on one. So if they lost one, they could still keep going in the others, but it allows them to grow their business [00:11:00] in ways where they are insulating themselves from things outside of their control.

I love seeing people, especially moms, having rockstar businesses, whether they're big or small, and I don't want to see any of them lose their businesses for anything that's outside of their control after all the hard work they've put into it.

And that's why I like to see people maximize everything they own, expand their diversification, and then minimize their Those factors that you cannot control and take them out of you being dependent on them.

Listen to Booth's other podcast, the Carolina Women's Collective Podcast
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Booth: And also, if you are a fan of women entrepreneurs and business leaders like I am, and would like to support them and learn from them and be inspired from them, be sure and check out my other podcast on the Carolina Women's Collective, where I interview amazing women entrepreneurs and business leaders, and we hear their story.

We talk about, uh, tricks to their success. We talk about things they've overcome to get to where they are.

And Carolina Women's [00:12:00] Collective also has an in person annual summit in October. So if you're interested in attending that, hearing some amazing speakers to be inspired and learn, uh, All sorts of things about women business leaders, entrepreneurs, all of those great things; be sure to check it out on our website, which I will link both the website and the podcast in the show notes.

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