With a staggering number of businesses founded every hour in the UK – 80 in 2016 – it takes a lot for entrepreneurs to create excitement around their new ventures.
One way many founders try to do this is by making their small business mobile, whether temporarily or before putting down roots. The UK’s pop-up retail economy is worth around £2.3bn, according to a 2015 report from the Centre for Economics and Business Research, and even big multinational brands, such as Evian and Adidas, now establish pop-up shops to create a buzz around their latest products.
It may sound like a lot of fun, but what is the day-to-day reality of running a pop-up shop, stall or roaming van? Does being mobile bring any unique perks? And how do mobile business-owners overcome the struggles they may face?
Accessing finance
One problem pop-up business owners may encounter early on is accessing finance. Many banks and other lenders won’t lend to start-ups, deeming them too risky, and will only lend to companies with a few years’ trading history. However, if you do have this history, and have a fixed personal address, it shouldn’t be too difficult to take out a loan to grow your venture.
Many mobile business owners turn to peer-to-peer lenders, which connect investors to borrowers via the internet, and can help them access funding within weeks compared to months from a traditional bank. Alex Corbett is the founder and owner of Pizzarova, a mobile sourdough pizza business that operates from the back of a Land Rover in Bristol, Somerset and the South West. He turned to RateSetter, one of the UK’s largest peer-to-peer lenders, when he started his business four years ago and has taken out various loans over the years, to buy a freehold property, a new pizza oven, a second Land Rover and for working capital.
Corbett says the whole process took less than 24 hours each time and was easier than going through a bank. “It’s an efficient system born out of a new business with new systems and minimal clunkiness. I’d recommend RateSetter to other businesses – as a small business, one has to be realistic about one’s ability to borrow money. There’s a reason banks don’t lend to small, unproven businesses!”
Flexible premises, flexible costs
But while it may be more difficult to access funds initially, being mobile has its financial perks, with often lower premise and utilities costs. Corbett had run pubs in London for a decade and wanted to start a business without the overheads of a fixed premises. “I loved the idea that when you were closed you weren’t paying for rent or utilities.”
Bypassing these costs also means you can invest more easily back into the business, says Emily Ewart-Perks, founder of London-based mobile beauty, massage and spa service, Secret Spa. The company doesn’t rent a physical space, “Instead, we can invest in our key asset – our technology platform that matches customer bookings with available therapists,” which does much of the company’s work for them.
Avoiding fixed costs also means mobile businesses can offer staff greater benefits. MILK Beauty is a mobile beauty service that provides therapists to offices, events and homes across London. “Because we have hardly any fixed costs, we’re able to pay our therapists considerably more than they would earn in a salon, sharing the profits with them,” says Lucy Patterson, the company’s managing director. “This means we can attract and retain the very best therapists, which is critical to our success.”
Unfortunately, however, being without a fixed premise means mobile business owners are often at the mercy of unpredictable traffic. Patterson says London traffic is the single biggest downside of being a mobile beauty business. “On Fridays we have up to 30 therapists on the road and gridlock traffic can play havoc with a busy schedule. Our clients are time-poor and it’s often not possible for them to reschedule late running appointments.”
To mitigate the problem, MILK has updated its technology. “We’ve embedded live travel time calculations into our scheduling software, which takes account of congestion hot spots and allocates the right amount of travel time in our therapists’ diaries.”
Regular opportunities
An inescapable benefit of having no fixed address, however, is the flexibility it affords you to try new things. Days may be unpredictable, but you’re rarely short of opportunities. Paz Sarmah, director and co-founder of mobile brownie vendor Bad Brownie, says being mobile means they can maximise on short-term and last-minute opportunities, trial different menu items and get instant feedback. “Each site itself can be set up relatively cheaply and customers have lower expectations from a pop-up venture. They don’t expect the same levels of finesse as they might from a longer term prospect.”
Not only that, but flexibility is also increasingly what customers demand from services. Rhea Papanicolaou-Frangista, CEO of mobile beauty marketplace Prettly, says a shift is taking place in the way women consume beauty services. “Mobile beauty services make it easier for customers to keep on top of their beauty routine by saving them time. Appointments are delivered to them early in the morning or late at night and customers don’t have to depend on salon hours.”
Customer loyalty
But offering services and products flexibly requires shrewd management on the part of business owners. “Being mobile takes more organisation than you might think because you have to set up from scratch and pack down each time, so you need to put more work in before and after,” says Sarmah. But Bad Brownie have developed systems to overcome this problem. “We have checklists and storage set up which makes it easier and quicker to grab things together for a new site while minimising errors.”
All of this to-ing and fro-ing does mean it can be more difficult to build a loyal customer base, however, as people may not know where you’ll be on any given day. Corbett says attracting new customers is the most difficult part of running PIzzarova, but he’s built a predictable schedule to improve his chances. “We became regular with our weekly pitches, so people knew when and where we were going to be and each night became pizza night in that particular town.”
But, thanks to social media, it’s easier than ever before for entrepreneurs to create excitement around their transient offerings: FOMO (fear of missing out) is heightened in the Instagram age. Customers may be more willing to take a punt on a purchase if they don’t know how long you’ll be there, or if they’ll miss out should they hesitate in purchasing. “We use social media to inform people about our whereabouts and create buzz, and to reveal which products will be at a particular site for a limited time only,” says Sarmah.
Pizzarova is on Instagram, Facebook and Twitter, and Corbett gives away a free pizza every Friday on each platform. “Every couple of months we give away a ‘pink card’ which entitles the winner to free pizza for life – or until they lose the card! This generates noise on social media and gets people coming down.”
Stepping stone
For some small business owners, their mobile venture is a stepping stone to something more permanent, while for others it’s a springboard to for something even more creative. For the Bad Brownie team, the priority for 2017 is opening their first bricks and mortar “brownie dessert bar” in Camden in spring.
Meanwhile, Corbett is in talks with shopping centres about getting Pizzarova’s crate – a 20 ft shipping container that’s been converted into a pizza kitchen – into one of them. “It’s a hybrid between a fixed and mobile site in that we can move it on the back of a lorry for a few hundred pounds and, to build, it costs a fraction of the price of fitting out a fixed premises.” Once you’ve gone mobile, then, it seems the opportunities are endless.
Content on this page is paid for and produced to a brief agreed with Kia Fleet, sponsor of the Guardian Small Business Network Accessing Expertise hub.
