Most people will have formed their idea of what running a pub is all about from having been a customer. The reality of running a pub/hotel/restaurant is very different and requires dedication and commitment.
Is the life for you?
Being a Licensee is a lifestyle choice; I have often said it is a vocation not a job. You have to be prepared to eat, sleep and breathe the operation. The days are long, from early morning deliveries to closing time.
Can you manage the team, finances and accounts as well as smiling, listening and talking to your customers all the time? And you will also have to become an agony aunt or uncle. If you can answer yes then owning a business can be very rewarding.
If you have already been a manager then you already know if you will like it. If not you might talk to a friendly publican and see if you can do some work experience with them.
How much can you afford?
Your choice of pub will depend on location and style and of course what you can afford.
You need to have an early understanding of the costs involved in buying the business. E.g.
- Purchase price
- Agents Fees
- Solicitor’s fees
- Lenders Fees
- Surveyor’s fees
- Training Fees and License fees
- Accountants fees
- Stocktakers Fees
This is not an exhaustive list.
If you are moving from employment to owning your own business then there are costs that your might not even think of. If you have been used to a company car then you will have to buy your own vehicle. Paid holidays will be a thing of the past as will other benefits like private health care.
Research
Once you have decided how much you can afford and the style and location/s you can start to look for your pub. All the business transfer agents offer advice on their sites and will email you when new properties become available. With the internet it has become easier to look at what is on offer but I still think it is worth talking to the agents direct.
When you have a short list then do your research. If it has failed in the past ask yourself why? Visit the pub and different times. Drive around the area and look at your possible opposition. And look at the “Chimney Pots”. Are there enough potential customers nearby? Are the people nearby likely to want your vision of the pub?
Seek out professional advice and listen and try not to let your heart rule your head.
Accounts
Once you have chosen your preferred business obtain all the trading information that you can. The Agent should help, but you should be looking for audited accounts, VAT returns, recent management figures and weekly turnover.
Remember that all accounts are historic, but they are a good source of information. If you are not experienced in looking at accounts then find an accountant who is used to the licensed trade, they will also be able assist you in preparing your cashflow forecasts and budgets.
Building Condition
Just like buying a house you are well advised to obtain a property survey before proceeding with the purchase. Remember if you are buying a freehold you will be responsible for all repairs. If you are buying a lease of taking on a tenancy then make sure you understand exactly what you are responsible for.
Is the price right?
If you are borrowing money to finance your purchase then you will more than likely need a valuation as part of your loan application. It is also worth talking to a finance broker who will help you with your application as they will know what the lender requires and he will also know which lenders are best for your purchase.
Even if you are lucky enough to be a cash purchaser, having a professional valuation carried out could save you making a mistake that could turn out very costly in the end.
We do work with a broker if you need help.
Qualifications and Training
You will need to have obtained your personal license and be able to prove to the local Licensing Committee that you have knowledge of the licensing laws. Ii is also a good idea to obtain a food hygiene certificate. Also keep upto date with what is happening in the local business community as there will often be cheap courses.