Temporary or ‘pop-up’ shops are proving a huge success for both startups and landlords alike. Not only do pop-ups help to reinvigorate the high street and re-energise local economies by reducing the number of boarded up shops and helping landlords meet property costs, they also provide a more affordable means for entrepreneurs to test markets and launch startup businesses.
Nellie Day, US-based commercial real estate industry writer, explains: “Some sharp marketers who have new products, or a completely new business, will also lease short-term space specifically to test their products or new business concept to determine if it will, in fact, sell in a particular market, or city. If any of these products or businesses are susceptible to localised influences, the marketers may lease space in multiple markets to make sure they cover their entire demographic influencers.”
However, Clive Lewis, Head of Enterprise, Business Department, warns that entrepreneurs looking to open pop-up stores do need to do some basic business preparations. He provides the following tips:
1. Research the footfall of the proposed location. Decide whether the area has potential to attract new customers.
2. Check what other businesses operate in the area and whether they are potential competition. If there is competition ask how to differentiate your business.
3. Check the proximity of the premises to customer parking and how customers can collect items purchased.
4. Think about deliveries of goods into the premises.
5. Negotiate with the landlord about the terms and conditions of the tenancy – the term, the rent, etc.
6. Consider how much you need to spend on refurbishing the shop to appeal to customers.
7. Get quotations for expenses such as insurance, rates, etc.
8. Prepare an advertising campaign – local media opportunities, leaflet drops, local newspaper inserts, etc. Consider developing a website and use of social media to drive traffic to the website and the shop.
9. If you need to raise finance, prepare a business plan using the research and preparation to demonstrate to finance providers that you are maximising the potential of the business.
And a 10th tip from us: Don’t do it alone – Choose an experienced accountant and business adviser who will give you the advice and help you need and guide you in making the right decisions now and for the future.
“Getting ready to start a business always takes longer than the owner thinks possible. So in your planning, start from the scheduled opening date (such as September in time for the Christmas effect) and allow sufficient time for each of the above activities with a contingency for the unexpected,” Mr Lewis says.
At Beavis Morgan, we work with a number of entrepreneurs and startups, helping them set up and run their businesses, whilst navigating the challenges and advising them on making the right decisions both now and for the future. We also understand that whether you’re a startup or a well-established business, cash is king and managing its flow is crucial to your immediate and long-term success. That’s why our independent finance brokerage, BM Structured Finance, is readily available to assist startups source the right funding for their individual needs.
Further reading: SME Adviser Series: An introduction to starting your own business