The holiday season is upon us. Along with everything else cheery and bright, the holiday season brings an infusion of pop-up shops. Some San Diego bars are converting to themes for the winter holiday and New Year’s and national retailers like Harry & David will open pop-up shops within larger retail stores and malls. See here.

If you are thinking of starting a pop-up store, here are some quick tips.

What is a San Diego Holiday Pop-up Shop?

A pop-up shop is a shop (or even a whole store) that is designed and planned to be open only for a short time — a month to three months, maximum. Around the Christmas holiday season, pop-up shops proliferate. Halloween pop-up shops are common in October, fireworks shops and stalls are common in June, farmer stalls are up and running during the summer, garden-center pop-ups appear in April and May, and tax preparation shops open in February.

Pop-ups come in many varieties. Often they are free-standing and outdoor — think pumpkin and Christmas tree lots that convert a parking lot or an empty grassy area into a retail space. Or, what was once an empty retail store in a strip mall suddenly has a sign and is open for a couple of months. Sometimes, an entire space like a bar is converted from its normal use/decor into a seasonal space and then reverts back. Finally, more and more common these days there are pop-up shops that open within larger retail stores and malls.

Advantages of San Diego Holiday Pop-Up Shops

For retailers of all sizes, seasonal pop-up shops have the obvious advantage of expanding penetration in the retail marketplace during the best time of the year for sales. Pop-ups also minimize risk because of the short-term duration.

Quick Tips for a San Diego Holiday Pop-up Shop

Here a few quick tips if you are considering a pop-up shop:

Consult an experienced business attorney: Even with the simplest of pop-up shops, there are contracts to sign. You need to have an attorney review the contracts. There is nothing like six months of litigation to ruin the fun of your holiday pop-up shop.

Do your homework: Do your research to determine the best type of pop-up shop for your business plan and your finances. The easiest method is renting a stall or a space in a larger holiday pop-up market that many cities allow and encourage.

Comparison shop: Pop-up shops are big business during the holidays; many large retail stores and malls actively seek out pop-up entrepreneurs; as such, lease prices and terms can be competitive, so it is wise to comparison shop; various issues to consider:

• Rent payments — fixed or variable
• Hidden costs
• Insurance requirements
• Amenities and utilities provided — at what cost?
• How much space is provided?
• Hours of operation
• What is the verifiable quantity of buyer traffic?
• Are personal guarantees required in the contracts

Plan ahead: If you are starting a pop-up shop for the first time, your lead-time is at least three months, if not more. Something as simple as a tree lot requires research into local permits and zoning (is the business allowed?), finding a good location, obtaining insurance, applying for and obtaining the permit, getting utilities established — you are going to need lights — finding and having product delivered, etc.

Form a corporate entity: Even for something short-term like a pop-up shop, you should consider incorporating to protect your personal assets.

Set up your bank and tax accounts and get your California Seller’s Permit: Before your pop-up shop opens, make sure you have your bank and tax accounts set up; if you are selling goods, California requires you to collect sales tax; make sure you are ready; and even for a holiday short-term pop-up shop, you need a California Seller’s permit.

Planning on hiring employees? If you are planning to hire temporary employees, you must set up your employer accounts with the California Employee Development Department and obtain a California employer payroll tax number; be prepared to withhold employee taxes; you also need unemployment insurance coverage.

Call San Diego Corporate Law Today

Starting your own pop-up business presents many challenges. If you need legal advice relating to setting up a pop-up shop or a full-blown business, call experienced business attorney Michael Leonard, Esq., of of San Diego Corporate Laww. Mr. Leonard has been named a “Rising Star” for 2015, 2016 and 2017 by SuperLawyers.com. Call Mr. Leonard at (858) 483-9200 or via email.

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