To Business or not to business

Sometimes I prefer to write nonsense stuff instead of writing formal topics like this one. That was why I audaciously launched a third blog previously. When it comes to all things business-y, I write based from my experience and my own theories.

I am an observant person and I write what I see. Since I have no newspaper column and am basically a nobody, I just share my thoughts in this humble blog of mine.

I said previously about where to invest your hard earned money. Nix wrote an interesting comment on how OFWs could minimize their currency losses due to the appreciating peso (or the falling dollar, depending on where you are at the fence). Let's proceed to the discussion I posed on owning a franchise and starting your own business from scratch.

I'm not going to list down the franchise fees nor the royalties being charged since these are either readily available out there or you can always call your prospective business franchise for details.
What I'm more interested to discuss about is the point in time where you rationalize your reason for going into business, and deciding on which path to take - the franchising road or the start up road.

I'm no economist, as I've said countless times before. However, I think too much and observe too much I think I'd get a degree one day hehe.

When you think about possible businesses to go in (and I mean startups) you will realize that the market is saturated already with so many competitors. The one who has the most capital usually wins (devours the new competitor) because this person can afford to drop his prices (increasing your barriers to entry) and recover his lost margins through other means.

I'm of the school of thought that thinks that the Philippines, no matter what GDP it will generate, is a shrinking consumer market if it does not reduce a huge amount of people living under the poverty line.

Companies continue to sell their products in small packages - e-load, softdrinks, cigarettes, soap, detergents. And there are still flocks and flocks of people who'd rather shop in Tutuban, and especially 168, instead of buying clothes from Penshoppe, Bench, etc. At the end of the day, people are price sensitive.

If you want to enter into a high margin industry, you must have a huge capital or you must have something so unique people will buy your product regardless of your price. This is called the first mover advantage. Somehow, there's a dearth of fresh ideas. How many innovations can you do on a piece of doughnut anyways?

You could try something with low margin and high volume but people are not brand conscious about. Fishballs, anyone?

For new readers, I'll add you to my blog roll soon. My eyes are about to shut down on me already. Zzzz