KIS News Issue #31 - some links included in this issue may be affiliate links

This Week:

Update: One of the unexpected joys of building a personal brand and business for myself online has been how many new friends I’ve made. Entrepreneurship can be lonely at times and it feels as though no one else truly gets what you are doing and all the different plates you are spinning, especially when part of that business also involves showing up and creating content. This week I met one of my favourite people on the internet (and now in real life) Dev for a coffee & a walk around Arthur’s Seat in Edinburgh. We walked for 10km and yapped non-stop about everything from what is keeping us up at night and opportunities for growth to morning routines and how to get more protein in our diets and drink enough water. It truly filled my entrepreneurial pal cup 💛.

This week’s workshop: Important reminder that this week I’m hosting a live ChatGPT for business workshop walking you step-by-step how to use AI in your business, create your own custom GPTs (think of these as your own personal assistants), and most importantly, how you can monetise them! I’ll only be doing this session once and if you can’t make the session live you can catch the replay. Click here to sign up >>

Mindset Moodboard:

“TikTok Shop is ruining my business” - analysis

Earlier this week I was sent this video, asking for my thoughts and what I would do in this situation. The synopsis of the video is this:

Small business owner has set up on TikTok shop because she struggles to drive traffic to her own website and sees the benefit of having integrated social selling as a business model. She received a return this week that had been refunded by TikTok shop despite being clearly used and also states that TikTok shop are ruining her business and taking an unaffordable margin (10%) as a commission for each sale.

Here are my thoughts:

Firstly, I don’t disagree that TikTok shop should be verifying use of products before issuing a return. That’s not ok and has cost this small business owner money.

However what I think is the more relevant and pressing issue this video has highlighted (rather than bashing tiktok shop) is just how precarious the margins of small businesses are and how risky it is not to own (and therefore control) the entirety of your supply chain.

Basic business 101 is to have a clear understanding of your product margins, unit economics (how much it costs you to acquire and serve a customer) and how profitable you are. The harsh reality is that TikTok shop is actually incredibly competitive on fees as a third party marketplace. If you can’t afford 10% of your final sale as part of your cost of sales, then your business doesn’t work, your prices aren’t high enough and you don’t have enough scope for making profit. No business should have a 10% make-or-break knife edge of margin.

TikTok has been transformational for a lot of businesses (which this business owner admits) but it is also incredibly high-risk to be at the mercy of one platform with such thin margins. It should always be an absolute priority to own your entire customer journey and encourage transactions through your own website. If you find this part tough, you need to either accept that there are downsides and inherent risk with a third party platform but the upside of having direct and easy access to acquire new customers is far more beneficial. Or, you work on developing your marketing so that you can drive traffic to your website and therefore control more of your margin and the relationship with your customer.

Ultimately I think there are some key takeaways here:

1. Never rely on one route to market and way to transact with customers

2. Account for returns, bad debt and write-offs in your margins and your pricing. (I recommend doing this on an annualised basis and baking it into your budget at around 5%)

Smart money hacks you need to know

If you’ve been here for any length of time you’ll know I’m a huge fan of working smarter not harder and this includes making your money work for you too. After 18 years of running businesses, here are my favourite smart money hacks you need to know:

1. If you aren’t already, you should absolutely be separating out your money for taxes on monthly basis and saving it in a high-yielding savings account. Personally, I use the Tide Instant Saver Account which has a 4.07% AER variable rate which means I actually make money on my taxes! Disclosure, I have recently shared my experience of Tide on my social channels as part of a paid partnership however this email is not included in that campaign. I just genuinely love them and I think you should be making smart money choices! T&Cs Apply.

2. If you are a director of a limited company, you can make up to six trivial benefit purchases for personal use per year up to the value of £50. This means that you can buy yourself, or even others, gifts using funds from your business as a trivial benefit and have the value deducted from your corporation tax bill and not pay income tax on the withdrawal of the funds. There are some important notes however - purchases cannot exceed £50 (not even by a penny), you can’t exchange them for cash, and you can’t add all the £50s together! Oh and it goes without saying that you need to keep the receipts!

3. There’s a clever trick for extending the amount of time you have to file your company accounts by 3 months. When you run a limited company you usually have plenty of time to file your company accounts - 9 months after your year end. But if for whatever reason you find yourself up against the clock and need to extend the time you have to file your accounts, try this trick. Login to your web filing account on Companies House and shorten your year end by one day. Yep shorten, there are different rules for extending the year end. You will then have 3 months from the day you requested the accounting year adjustment to file your accounts. Here’s an example: let’s say you incorporated a new company on the 1st of January 2023. Your year end would then be the 31st of December 2023 and your first year of accounts would be due on the 30th of September 2024. But let’s say you get to the 15th of September 2024 and you still haven’t filed your accounts and time is getting tight. You shorten the year end of your previous accounting year to the 30th of December 2023. You now have until the 15th of December 2024 to file your accounts (3 months after you submitted the change to your accounting period to companies house). Note - you must make the change request before your accounts are due, this won’t work if your accounts are already overdue.

   Have a great week ahead & remember to keep it simple.

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