Pub leasing

Kevicho

Has anyone here had any experience of doing this?
If so any advice would be great.

The situation is that a pub I used to visit regularly (before i took 6 months to pay off debt) is up for lease, and im really interested in giving the number a call.

Currently I have at least one person who is more than interested in helping me fund this, and I also have a few other people who may also want to take part, my funding will be of some sort of business loan which I will apply for when I have put together the business plan and have definitive backers.

Also last night I had an hour long conversation with a landlord at a pub (in a different town) and he seemed to be ok with my ideas, and gave me lots of great advice in what to look for, especially staffing budgeting, and organising, but luckily most of this advice was what I already would have used so It sounds like im on the right wavelength.

The first thing I would like advice on is the initial approach, I plan on ringing up to ask for as much info as they can give, state an interest but definately no offers or anything on the table.

I also need to sort out the money aspect, and get the business plan done, any advice or links to how to layout a professional business plan would save me some time (ill prob google it later).

I also will check out the loans section of the site to get the best deal, but that will be done in good time.

I already have someone interested in working for me there, but i dont plan a staff cull, I know them and they are all good at their job, i do plan however on having a pub manager, who could live there as there is living space, to do all the daily chores, after ive set up all the various systems in place.

Other ideas for nights and events etc will be put more concrete if we get the place.

Of course I will need to factor in wages, the various licences, insurance, beer/food orders, all the day to day consumables and probably more.

I really want to do this, but I dont want to dive in head first, so if anyone has any advice then that would be most appreciated

All the best

Kev

jasonrat

first of all u must consider is this an investment or will this be your only income.staff wages are the highest costs u normally have to pay, depending on energy costs and how high they go up again. if you really want to make money then its best to keep staff costs down especially if you will be at the place. we manage a pub and are quite successful the first year was down to us and what improvemenets we've made to the place. as we are now only in our second year business is still very steady but then you should think about operating costs. although we are maiking more money than last year it depends on the money saving ideas we have. we got our bii (liscensee)from the company we work for uit would be a good idea to take a course in your area and that will not only give you an insight into many areas but will also give you liscence you need to operate a liscenced premises(s still dont know how to spell licence) if its owned by a brewery i would contact the brewery and ask for information about the place and profits for the past few years. when you take over a place you will also buy furniture and everything inside which falls in value about 10% a year hope this helps a little bit

Astaroth

I must admit that a pub is a little further removed from my experience than I am fully comfortable in advising on.

There are many good websites out there on how to write a business plan. Also have a look at the business link website as it has a lot of useful information. If you have Microsoft Word then you can download a template for a business plan. Personally I wouldnt use this as a template (as whilst it is less important than a CV you dont want it to look like everyone elses) but it is gives a good idea of how to structure it and "tell the story".

When you are writting the business plan remember this isnt just to be able to secure finance for the deal but is also for you to make sure that the business is viable. It is all well and good being optomistic on everything but it is your money that is at risk if you arent realistic.

Buying a working business it is almost certainly worth getting an accountant involved... in the UK the books are prepared to GAAP standards which are very much advisory and not statutory and so companies can legitimately manipulate the books to tell the story they want (that isnt to say lie but you can choose how quickly you depreciate assets etc). It is sometimes possible to reduce the accountancy fees with the reminder that you will need an accountant at once you have purchased the business and if they do a good job now......

Debt_Free_Chick

In very simple terms, your business plan is about how you intend to make money ... lots of it.

So ... how do you intend to make money out of the pub? What does it currently make? What are the profit margins on what it sells - different for booze, soft drinks, snacks & food. Can you improve those margins? How?

Can you sell more of high margin stuff? How?

Can you increase the number of bums on seats? How?

I think before you look at these things, you need a much more thorough understanding of how the business is currently operating. Why is the lease up? What does it take at the moment? What does it make?

You also must be realistic about any plans for expansion or change. There's no point putting a gastro-pub in an area that wants a spit 'n' sawdust pub with a pool table. Absolutely nothing wrong with that kind of pub, as many of them make money, but you must ensure that you have the local clientele to support any changes or that the the clientele you are targetting will actually visit the place.

I fear you are approaching this from an emotive viewpoint at the moment and you need to take a cold hard look at the business perspective.

Is there an agent involved? They should be your first point of call. Get whatever information they've got. Finance will usually be on the back of the business i.e. what profit it makes - but you should be able to assess whether you are likely to get finance or not. You probably won't be able to see the books until you sign a "heads of agreement" which is essentially an agreement to proceed, subject to lots of conditions (on their part, as well as yours).

I really think you should get professional advice if you've not bought an ongoing business before. Especially a pub.

ManAtHome

Is this a currently managed pub being leased by a rather large 'Pubco'? (lot of them about at the moment - contact should be Christies). If so, have a word with the current manager - may give you a hint as to why 'first refusal' has been.

Kevicho

Hi thanks for the replies, to be honest my main concern is making money, I know the people who I am involving are also interested in making money, and im sure that they will be 100% dedicating to protecting their investment, obviously I will be takingout a loan nd i will be looking to pay that back in the quickest time possible.

The pub itself does ok, and has a decent base, a lot of people i know, so they I have plenty of ideas for nights, events etc to get more/keep the custom, also its ideal location near a university and a couple of gig venues, so there is a market to be exploited with the right advertising

The reason is not money or anything bad for the lease expiring.

At the moment I will ring up the company and ask for all the relevant info, and then run that by various people, luckily i have a few people who are in business who can advise me, also I know a couple of landlords so the advice is there.

Micky2008

After running pubs and growing up in ones my parents ran theres only one thing that stands out to me to ask you.

How many financial backers are you going to need to be able to afford this pub? As you say you all want to make money.

There isnt as much money in the pub trade as most people outside the trade seem to think. Yes a sucessful pub will earn money obviously but you really should find out if the turnover is enough to make ends meet and make a profit enough to go around.

Another thing is your thinking of employing a live in manager whilst this is a good idea i a pub already making more than enough profit, when first starting out as you are its generally the best idea to do as many hours yourself as you can to keep costs down.
You could employ a manager but look at it this way, the more you have to pay extra staff the less of a profit you take home.

Good Luck