Many people pursue a trendy business and several months later they close down and lose their money because the business doesn’t make money anymore.
I see many aspiring entrepreneurs asking questions like – is a computer shop business still good today? Or how about a milk tea business? I should definitely start a milk tea business because it’s trending now!
The reasons behind why people join trends
The reason behind people joining trends is because of “FOMO” or Fear of Missing Out – they want to be a part of the craze everybody is talking about so that they could be accepted as sociable.
So, let’s define a trend is what’s hip or popular at a certain point in time, according to vocabulary.com
Food carts, ripped jeans, long hair with bangs and etc. are examples of trends in the past.
Trend has a brother called “fad”
Now what is a fad – are objects or behaviors that achieve short-lived popularity but fade away [faster than a trend]. – Wikipedia.
Examples of fads are Pet rocks in the 1970s, fidget spinners, and Angry Birds So why should we avoid starting a trendy business? Is it really bad?
3 Reasons Why you Should Avoid Starting Trendy Businesses
There are 3 reasons to know about trends and fads. These things are important to know especially if you want to start a business yourself.
1. Trends and fads die – they don’t last long and if they die so does your business.
This is very obvious yet people aren’t aware of this. Remember the Fidget Spinner in 2017? People were selling and buying left and right but after several months they were all gone.
It didn’t affect the buyers much, but what about the sellers? Where are they now? Are they still selling those even if they are not that profitable anymore?
Fads die because they don’t have much utility – it’s not needed by people in the first place.
Computer shops were a trend but after many years, many shops died, only a few survived and continued to operate. The other one was food cart businesses like Master Siomai, Waffle Time, and etc. during my youth I could see these businesses just outside of the campus and it was flocked down by students, but now only 2 food cart business remained active.
Could you guess the next business trend to die? I do! It’s the milk tea business.
I am not saying that I pray these businesses will die soon but history repeats itself – especially trends and fads and it will happen again.
2. Saturated market
Many people start a trendy business thinking that there is money to be made in that kind of business but they just disappoint themselves.
You see when more and more people set up a business that is “trending” it usually causes “market saturation”.
“market saturation” – a situation in a market wherein there is “too much supply” and “less demand” from a product or service.
The cause of market saturation is because of competition – too many competition, and with too much competition comes distributed customers and with distributed customers comes little profit.
I can see this situation particularly to milk tea businesses – just recently hundreds of these shops pop out left and right and their customers a.k.a “milk tea lovers” are only a few in numbers and because of that milk tea shops share the same amount of customers in a certain area making little profit every month.
3. It will not work for everybody (especially for you)
All successful businesses became successful because of the person who started it aligned with his purpose, passion, network, resources, problems, target market – in short, their situation.
Tony Tan Caktiong – the founder of the famous fast-food restaurant “Jollibee” became successful because his business adjusted to his “situation”.
Tony started with an ice cream franchise business owned by Magnolia before he started Jollibee. His customers loved his business because of the excellent service and excessive food servings. But later on, people started to look for “hot meals” like hamburgers, Tony listened to what his customers want and served it to them. He then noticed that people loved his hot meals more than the ice cream he was selling and because of that he stopped his ice cream franchise and turned it into a fast-food outlet.
You see, a business will be a success if it will work for you. Don’t force yourself to start a business just because other people are doing it too.
Starting a “me too” business is a trap that is disastrous financially.
If you see your friend Maria living on the mountain side and started a hiking apparel business and is earning plenty of money, will you copy her business even if you live near the sea? No.
If you don’t get my point, here’s a simple explanation:
Never start a business just because its “trendy” because it will not 100% work for you, start a business based on your situation.
Real-Life Case Study
One person by the name of Gab asked for help from me. He was thinking of starting a milk tea business in their place. But people can’t afford it in their area so I advised him not to pursue it, instead, I advised him to look for needs and problems in their place. –
Then after, he found a problem; their community was far away from the town so their neighbors buy rice from sari-sari stores which are much more expensive compared to rice retailers in town.
“It was a big problem because it eats up a big chunk of our daily budget”, he said.
Gab then asked advice from me if it was ok to set up a rice retailing business and offer a lower price on rice. I said it was a great idea because it resonates with their situation. Now Gab is looking for a supplier to start his business.
What you should do instead
If you are really passionate about starting your own business here is what you are gonna do:
Focus on evergreen businesses
Jose has a boarding house business for over a decade now and consistently earns P 35,000 in rental income, while on the other hand, his brother Andres started a halo-halo business, earning him P50,000 during summer times but when the rainy season starts his earnings plummet.
– The difference between an evergreen business and a trendy one
Start a business that is “evergreen” – because unlike a trendy business it will never go away – it will never expire. So how will you determine if a business is “evergreen”?
An Evergreen business is based on a NEED, I repeat, A NEED – these are things we cannot live without.
?Examples of a need:
- Food
- Clothing
- Shelter
- Water
I am sure that your business will never die away if you start a business based on any of the examples above. Moreover, needs never go out in trend because we need them all the time. Jose’s business is a need while Andres’ isn’t.
If you’re saying halo-halo is a food, you’re right, but can you live without halo-halo?
Yes, of course, you can.
It’s a “want” because if that. It is not a “staple” food like rice and viand (ulam).
In summary
Avoid trends unless you only want to gain experience. Trends have expiration dates like a peeled banana.
Focus on evergreen businesses, don’t waste your time, money and effort in pursuing “trendy businesses”.
Evergreen businesses are based on “human needs”, these are things we cannot live without.
Be a trendsetter – be the one that starts a trendy business, not the one who joins it. Maging isang tao na “nagpapauso” hindi yung “nakikiuso”.
Leave a Reply