By Gerhard Britz, Managing Director at Waco Modular
A growing number of South Africans are tapping into their retirement savings to fund small business ventures, driven in part by the introduction of the new “two-pot” pension system. Implemented in September 2024, this system allows for partial access to retirement savings for specific needs.
While there is no precise data available on how many people are using these withdrawals solely to start businesses, more than R43 billion has already been withdrawn by over 2.5 million taxpayers.
It is thus easy to surmise that this system has undoubtedly made it easier for people to access their hard-earned savings and put them towards business pursuits which suggests a clear appetite among South Africans to unlock their entrepreneurial potential.
For aspiring entrepreneurs, low-cost solutions are critical and the rise in popularity of pop-up shops presents a unique opportunity for these businesses to launch their ventures with significantly reduced capital expenditure. By eliminating the need for substantial upfront investments in traditional, permanent retail spaces, pop-up shops provide a more accessible and flexible solution alternative for launching a business.
Key advantage: Lower barriers to entry
One of the key advantages of the pop-up shop model is that it allows entrepreneurs to allocate their resources strategically, focusing on operational needs rather than being burdened by the high costs associated with setting up a traditional brick-and-mortar business. Without the need for long-term leases, extensive renovations and permanent fixtures, entrepreneurs can channel their investments directly into the core aspects of their business, such as inventory, marketing and customer experience.
This shift in the start-up landscape is particularly beneficial for entrepreneurs in the retail, food and service industries, where pop-up shops have become increasingly prevalent. Their customisable and scalable nature allows businesses to adapt quickly to changing market demands, tailoring their offerings and location strategies to maximise success.
The scalability of pop-up shops enables entrepreneurs to expand or contract their operations as needed. Whether expanding to accommodate growing inventory or scaling down to a more compact footprint, the modular design of these temporary spaces empowers business owners to tailor their physical presence to their specific needs. This flexibility is particularly valuable in industries where seasonal fluctuations or evolving consumer preferences can significantly impact a company’s performance.
Inherent mobility
Another key benefit of the pop-up shop model is the inherent mobility it provides. Unlike traditional brick-and-mortar establishments, pop-up shops can be easily relocated if a particular location fails to generate the desired foot traffic or customer engagement. This agility allows entrepreneurs to quickly adapt to changing market conditions, test different locations, and find the optimal setting for their business to thrive.
The versatility and adaptability of pop-up shops are exemplified by the inspiring success stories of entrepreneurs who have leveraged these temporary spaces to launch and grow their businesses. For example, one entrepreneur identified an opportunity to set up a coffee shop at a popular and well-frequented golf course. By capitalising on the captive clientele of players and visitors, this entrepreneur was able to establish a thriving business in a prime location, without the burden of a long-term lease or substantial upfront investment.
Impact on informal sector
Pop-up shops have also had a significant impact on South Africa’s informal sector by providing traders with new opportunities to reach customers, test products, and enhance visibility. These temporary retail spaces also bring essential consumer products and services close to communities, creating much-needed job opportunities in the process.
Similarly, pop-up shops play a crucial role in strengthening local supply chains, by sourcing products and services from nearby suppliers. These temporary businesses contribute to the growth and resilience of the local economy. This relationship between pop-up shops and their surrounding communities creates a ripple effect, bolstering the broader economic landscape.
As South Africa’s entrepreneurial landscape continues to evolve, the pop-up shop model presents a powerful avenue for aspiring business owners, ultimately contributing to a more vibrant and diverse small business sector.
