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Have you ever wanted to open a shop to sell the t-shirts you designed or all the paint-by-numbers you created? If you're worried about committing to a yearlong business, you may want to consider starting a pop-up shop.
Pop-up shops are gaining in popularity as they allow business owners the flexibility of connecting with customers without committing to a year-round business.
If you're planning on starting a pop-up shop, here are five legal requirements to consider:
1. Get a Business License
Does your city or state require businesses to have a license to operate? If yes, there's a pretty good chance that those requirements apply to your pop-up shop too, regardless of whether you're in business for 10 days or 100 days.
Also, depending on what you sell, you may need special licenses (especially if you're selling food or alcohol). Pop-up stores are not exempt from licensing rules, so be sure to check your local laws for licensing requirements.
2. Negotiate a Lease
Pay extra attention when negotiating a lease for a pop-up shop. Are you allowed to install fixtures or paint the walls? What times are you allowed to operate? Is there an option to extend the lease if you want to go from pop-up to permanent?
Just because your shop is temporary, it doesn't mean you should gloss over these details and sign whatever lease the landlord gives you.
3. Consider Incorporation
While a pop-up shop may be temporary, your business can last many years. It may pop-up every year, every few years, or even twice a year.
If you intend for your business to continue even after you close the pop-up shop, you may want to consider incorporating your business. Incorporating can be a hassle but it can also protect your personal assets from your business debts and protect your business from your personal debts.
4. Hire Some Employees
Are you planning to hire some people for just the one month the pop-up shop is opened? Or, are you hiring long term employees?
Depending on the terms of the employment and how many employees you have, you may or may not be required to pay minimum wage, offer health insurance, or comply with other labor laws.
5. Get an Attorney
After reading over these requirements, you may start to think that even a pop-up shop is too much of a hassle. Don't despair. You can hire an experienced business attorney who will be able to help you address all of the issues listed above. Let your attorney handle the legal stuff while you focus on running your business.