How To Budget for Your Pop-Up Store

Written by Arielle Crane

Pop-up stores only require a fraction of the financial investment of a traditional brick-and-mortar store, which is appealing to big and small brands alike.

The lower upfront cost of a pop-up store allows brands with limited budgets to get in on a growing industry that’s generating billions in revenue (according to a report on Britain’s pop-up retail economy by the Centre for Economics and Business Research, temporary retail stores are now estimated to bring in £2.3 billion annually, or $3.5 billion, for the U.K. economy alone).

If you’re looking to build a budget tailored to pop-up stores, here are some factors to consider in your spending plan.

How to Set a Pop-Up Shop Budget ?

While creating a budget for a pop-up shop may feel intimidating at first, it’s far easier when you break it into more manageable sections.

1. Determine the Type of Pop-Up Event You Want to Host

One of the primary costs you’ll have to shoulder is renting a venue. Before you can choose a pop-up space that suits your purpose, you’ll need to figure out what type of pop-up event you want to create.

Ask yourself these important questions when fleshing out your plan:

  • How much square footage do I realistically need for my set-up?
  • What season will I host my pop-up event (can I host it indoors/outdoors)?
  • Which city or neighborhood is ideal for my pop-up store?
  • Do I want to hit multiple locations with a traveling pop-up store?
  • How long do I want to host my pop-up shop?

Depending on your answers, you’ll be able to make a more informed decision about the type of temporary retail activation you’d like to build. Some of the most common types of pop-up shops for you to consider include:

  • A store-within-a-store, or a “pop-in” shop
  • Kiosks or booth space at an event
  • Galleries or event spaces
  • Malls
  • Vacant storefronts
  • Traveling pop-up shops like a food truck

Once you’ve nailed down the type of pop-up shop that makes sense for your brand, you can estimate the cost of renting a space for the period of your pop-up store.

Your pop-up store location will account for about 30% of your overall budget. And because it’s one of your largest expenses, you’ll likely need to make accommodations to prevent exceeding your allotted amount.

2. Outline Your Other Fixed Costs

Once you’ve established your biggest line item in your pop-up budget, it’s time to set up the rest of your spending plan.

First, outline the fixed expenses for your pop-up shop. These are costs that won’t change month-to-month over the course of your store, no matter how many products you sell.

Some examples of these costs include:

  • Insurance
  • Internet and phone line
  • Utilities
  • Property maintenance
  • Staff salaries

Because all these expenses are fixed and unchanging, these are easy-to-fill blanks in your budget. Now, it’s time to move on to expenses that will change based on usage or sales.

3. Other Costs to Consider in Your Budget

Next, you can fill in your budget with your other expenses. These may change on a regular basis depending on revenues.

Some of the most common variable costs that brands incur during a pop-up shop include:

  • Inventory: Based on sales numbers
  • Sales commissions: Depending on how you pay your sales staff
  • Marketing: The amount you spend on promoting your pop-up shop via print ads, paid social media ads, pay-per-click ads and other digital marketing efforts.
  • Packaging materials: For products you plan to ship directly to customers, you’ll need packing supplies

In addition to the variable expenses your pop-up shop will incur on a regular basis, a temporary retail store owner will also have some upfront costs when building your activation. Some examples are:

  • Lighting and fixtures
  • Décor
  • Furniture, tables and product displays
  • Indoor and outdoor signage
  • Mannequins and window display props
  • Point-of-sale system and payment terminal

4. Additional Tips to Keep Your Pop-Up Cost Effective

Just because pop-up shops come with their own set of unique expenses doesn’t mean hosting a retail activation requires a small fortune. Here are some tactics to lower costs and ensure you don’t bust your budget.

DIY Your Store Design: Instead of hiring a professional interior designer to set up your pop-up space, roll up your sleeves and get creative.

Track Your Busiest Hours: Monitor the days and hours during which your shop has the most foot traffic and sales. Once you’ve honed in on your busiest times of day, you can adjust your staff levels accordingly.

Collaborate With Other Brands: You don’t have to go it alone when hosting a pop-up shop. Connect with a brand offering similar or complementary products to create a collaborative pop-up effort.

Moving Forward With Your Own Pop-Up Shop

Find out how to turn your idea into a reality with the ultimate guide to opening your own pop-up shop >>

Last updated: March 17, 2019

About the author

Arielle Crane

Arielle is the Communications Manager at Storefront. Beyond offering up insights on the future of retail and pop-up shops, she also loves to write, travel and watch documentaries. She lives in Brooklyn, NY.