Scattered among the high-rises in downtown San Jose lays the small mom and pop shops trying to make it big in a crowded city.
In a city filled with over a million residents, small businesses strive to make their mark in a diluted market for products.
Located around San Jose State, local family-run boba shops find themselves going toe-to-toe with larger corporate cafe chains to gain the attention and business of more than 35,000 students.
Howard Combs, SJSU marketing and business analytics professor, said that small businesses often struggle in large cities. Potential customers are more likely to buy from familiar franchises instead of taking a risk with small unknown shops.
“The successful smaller businesses find a niche that larger business cannot satisfy,” Combs said.
Buddy Teahouse owner Jay Tran said that his niche for business focuses on students. He works to create an environment that appeals for this young demographic rather than worrying about what larger business have to offer.
Buddy Teahouse is located across the street from SJSU’s dorms on East San Carlos Street, making it the closest boba shop for students living in the dorms.
Vivek Agarwal, SJSU marketing and business management lecturer, said in an email that location is the most important aspect for a small business.
“The placement can make or break the small business – where the shop/service is located and how the consumers/customers would reach to access them,” Agawal said in an email.
The close proximity to students has made Tran try to keep his prices low compared to other shops, which creates regular customers, but makes revenue difficult to achieve.
“It’s very hard because the rent is expensive and the labor is expensive,” Tran said.
The influx of students keeps the business afloat, but during the winter and summer breaks, Tran takes a major hit in revenue.
“We have to adjust really quick in order to survive,” Tran said.
He said that during those times of the year he loses 70% of his normal income.
Similarly, Tea Village manager Levin Li said his shop also loses 60%-70% of its revenue during those times.
In order to combat the fall in customers, Li has tried to advertise his business in different ways to make lifelong customers that will want to come back.
During the first two weeks of each semester, Li posts flyers around campus hoping to pull in new students looking for a place to grab some boba.
The flyers have worked for him, but not for long periods of time.
“The business goes into an increase of customers by 4 to 5 times,” Li said.
But then the shop quickly sinks back down to its usual amount of customers and Li has not been comfortable enough with social media to expand his advertising online.
“I’m not good at social media like other shops that post everyday or every week,” Li said.
Marketing professor Combs said that social media has become a major part of marketing for larger companies, but small businesses have been left in the dust when it comes to advertising on those platforms.
“A lot of small businesses do not capitalize on [social media],” Combs said, “They usually do not have a team for social media.”
Larger companies are quick to promote new products online because multiple people are assigned to work social media accounts, leaving it harder for the owners of small shops to compete.
Although advertising and social media can be an asset that small businesses lack, the advantage these places have over large companies is that many consumers want to help a small shop over a corporation.
Marketing professor Agawal said the fact that these businesses are small helps them immensely.
“People get attracted to these businesses because they want to promote/support the local businesses and it’s convenient for them as well,” Agawal said.
Buddy Teahouse owner Tran embraces his small business title and strides to make the best out of the situation.
“I hope students come and try and judge based on the quality and freshness of the food and drink that we give to the customers and not because what company is most famous,” Tran said.
