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Hello You,
“Small businesses” are a hit on Instagram and TikTok! A new way of doing business, directly close to its community. If it may seem intuitive and easy to launch, it also implies a number of constraints that are sometimes not sufficiently taken into account (creation of statutes, declaration of income, drafting of general conditions of sale, authorized payment service, etc. …). Back on this phenomenon and on the possibilities offered by social networks!
Businesses that must be in order
There are thousands of small business entrepreneurs in France today.
Legal obligations
Very often, they are also passionate people who sell products or services in parallel to their work. It is not always easy in this context to understand all the issues related to this side business (legal, accounting, etc…). And yet, it is the key to avoid bad surprises and retroactive taxes.
Towards the status of autoentrepreneur
We notice that these companies are particularly represented on the platforms TikTok and Instagram. The reason? These two tools are known to be real showcases and good sales levers, especially through the many features they offer (store, direct link to their site, etc. …). But beware, social networks are gray areas, but not of no rights. In other words? A business remains a business, and any commercial activity implies commitments.
The risks of an undeclared activity
From the moment you sell a product or a service, you are considered a professional in the eyes of the law. And this, whether you make 12€ of monthly turnover, or 100 000€. What makes you different from a private individual? The recurrent sale. Small example to better project yourself: you sell a bunch of vinyls found in the attic? No problem. You buy second-hand to resell them afterwards? That’s a business. What risks do you take if you don’t declare this activity? It’s a violation, plain and simple. You can be found guilty of illegal sale of products and the consequences can be significant (fine, VAT payment, prohibition to create other companies…). In short, you might as well avoid it.
Preferred statutes for small businesses
There are dozens of possible statutes (SASU, SAS, auto-entrepreneur, EURL, EIRL, etc…). In general, it is the auto-entrepreneur status that is preferred. It is easy, fast, inexpensive and above all practical to create. It implies relatively limited constraints and the ceiling of the generated incomes leaves a nice margin of maneuver (176 200 € for services, 72 600 € for products).
The best payment methods
Another issue for small businesses? The payment process. Whatever the chosen sales channel (website, Instagram, TikTok, Snapchat, etc…), it is mandatory to offer an approved payment system to its customers. Very often, the apprentice entrepreneurs opt for well-known methods between individuals, such as Lydia. Unfortunately, this is not legal from a professional point of view. Indeed, the contractor must create a professional account for his activity. The payments must then be made directly on this account via official payment tools such as Stripe or Paypal. This is a way to track transactions, secure payments, and especially to declare them.
Social networks, soon towards an in-app payment?
Today, if social networks allow you to meet your target, they do not allow you to manage a business from start to finish. In particular, they are very limited on the payment part, which is decisive for online business. But things could change.
Facebook is testing in-app payments
In the United States, Facebook is currently testing an option with payment directly integrated into Facebook Shopping. Customers can pay in-app, without leaving the application. In the meantime, what is the solution in France? Use social networks and refer to another tool such as a blog or a website (Shopify, WordPress, etc…) with an integrated payment feature.
The solution of marketplaces or external sites
For artists and creators, it is also possible to opt for existing marketplaces such as Etsy (the reference in this field). This generally implies associated costs (commission or subscription) but it is a good way to manage your business in the rules of art.
The respect of consumer rights
The online sale does not escape the rules of the sale in a general way. Logically, it is therefore forbidden to sell certain products: counterfeits, drugs, homemade cosmetics (for reasons of health risk), weapons, etc… It is also mandatory to respect the consumer rights (right of withdrawal, general conditions of sale, possibility of refund, etc…).
In short, launching an online business is a great deal of fun and challenge but it also involves constraints that are important to take into account. Don’t worry, it’s not that complicated, it just takes a little time at the beginning. So, are you ready to start the Passion Economy?
