Help/Advice needed on pub leasing.

ReggieBlade

Hiya,

I am (stupidly?) thinking of leasing a city centre pub (probs 6/9 months away).

Anybody got any helpful advice and any relevant websites to visit regarding the pitfalls,money needed,training,etc?

Cheers.

Savvy_Sue

Look around at the number of empty pubs / pubs for sale. And think very carefully why that is, and how you'd be able to make money when so many others can't.

Sorry not to be more positive. Maybe others will be more cheerful. But it is certainly not an easy way to make a living.

emmell

I think the smoking ban has killed off a lot of pubs particulary where there are no outside areas to smoke. The pavements outside the front doesn't leave a good impression.
I am a non smoker but I believe something different should have been done to isolate smokers from non smokers but it's too late now. We used to have three pubs and a club in our village, we are now left with one pub (struggling), one pub for sale and one demolished. I think the club is the only one surviving.
ML.

DCFC79

Id really consider it, how about having a chat with maybe the owner of a few pubs local to you and ask them why you should lease a pub or is it worth it. Dont forget theres also a possible increase in vat to come.

Emmzi

you sound like you don't have much pub experience, is that right?

If so, get some barman work, and ask the boss if you can shadow him to help you understand the cashflow.

I wouldn't touch it if you havent worked in this line for a number of years.

Other option, try and get on a brewery training scheme as an employee, not an owner.

You really need to learn your trade on this one. It's not impossible but it's gonna be more than 6 to 9 months.

buftymctufty

Try and find out why the pub went bust and closed in the first place - if there is no local trade, then it will struggle

property.advert

I've owned bars abroad and been involved with a pub in the UK. Apart from the cost of the lease, rent, F&F and so forth, your big issue is the cost of your product, the booze.

I can buy it in Asda cheaper than you can buy it from your suppliers. They sell the same stuff to a massive chain at half the price you can buy it. Your competition sell it cheaper than you can buy it. Where do you think your competitive advantage is ? Missing is probably the right answer.

Firstly, are you confident with Excel ? If not, get to grips with that first as you are going to need spreadsheets to work through scenarios.

Do your market research. Go undercover and work part time in a bar.

I have a saying for my places and that is that if it looks easy, then as an owner, I am doing my job right. Remember also that the list of expenses might have 200 items on it. The corresponding list of income has only one !

Look at your potential revenue streams. Food is the most obvious. At the very simplest level, you could afford to make nothing on your food if it brought customers who filled up an otherwise empty bar. That is not the way to do it but you need to understand the accounting concepts of fixed, variable and and marginal cost. You may well need an accountant to work with you to develop your business plan.

All that stuff you can learn and get help with but you really need to understand supply contracts for alcohol. You may have heard about contracts which mean you have to pay for it even if you do not want it. You probably have no idea of the volumes you will need but I would put a lot of time and effort into learning as much as you can about the supply side of the business and see where you could buy from and at what volumes and for what price.

Is there a secondary market in stock ? I don't know but there must be some cheaper suppliers. You would need to retain quality though or you will fail in the first week. You need some figures to work from on this side.

Personally, I would not touch it with a bargepole. Why ? because if someone experienced and with lots of success and cash behind them does not want it, then why on earth would I ?

eamon

Don't do it. Leaseholders get stuffed from every direction. Cheap supermarket booze, overly expensive licences (for everything), greedy pubco's and their punitive terms.

If all the above doesn't put you off then you need your head examining. However if you really want to learn the trade then check out operators such as Witherspoons and learn from the bottom up (bar, cellar, manager etc)

JCS1

Be careful with pub leases - I used to work for the Official Receiver and used to have interview with people going BR due to pubs every week.

Main Problems seem to be:

• Smoking Ban
• Tied to buying stock from brewery when cheaper from supermarket etc,
• High rent
• Cashflow problems which then normally has a knock on effect with payment of VAT and PAYE

Lexxi

First, have you a NCPLH? Would you be running the pub yourself or putting managers in? If you haven't done this before then I would definately work for a company or holding company before handing over your cash.
I gave a Pubco about £5000 more than I had, I was one of the lucky ones.
Don't tell the Pubco how much money you have or they willl have it all off you, just for the start up, make a list of EVERYTHING that will be an outgoing, chef, food, gas, elecs, beer, security? cleaning products, office equipment, entertainment, business rates, council tax, tv licence, equipment leasing.

Also it's worth noting that the beer tie is coming under scrutiny, read websites like the morning advertiser, they have articles on the industry.
You also have a lot of bargaining power if you do go ahead with this, pubcos can give up to £150 barrel discount (36gallon) can do a free of tie deal or wines/spirits/minerals. You would also need to make sure you set yourself higher than the competition, just because the pub looks like it is doing well at the mo doesn't mean it still will be doing or that you can carry that on.
Is the pub open or closed?
Is it busy?
Does it have smoking shelters/outdoor seating/food options/disabled access/potential.

Sorry that my post seems like the others but there is a lot to consider, these pubcos are basically estate agents and sales men, they need you to sign up and hand over your cash so that they get your bonus and if/when it goes wrong they don't care because they still have their job and their home and their bonus