Running a gastropub

eattothebeat

Hi there,
my boyfriend (who is a head chef) and his friend (who is a bar manager) and me (worked in a few bars but not for a while) are looking to take over the lease of a pub. I would do all the admin side and work in the bar whilst the other two will do their bit.
Does anyone have any pointers/tips?
Is it best to get a brewery attached? What are the costs involved in running a bar besides gas/elec Council tax etc
We are at the very early preliminary stages of negotiations and I actually know the owner. He has asked to meet us next week with a gameplan. We'll be going to the bank for a business loan and my stepdad is an accountant who will do our Business Plan for us.
Any help appreciated! :beer:

motorguy

I would tread with extreme caution. A lot of (gastro) pubs are closing down every week

Heres a good thread on it from over on the pistonheads business forum

http://www.pistonheads.com/gassing/topic.asp?h=0&t=1097978&hw=+%2Bpub&nmt=Opening%20a%20bar

lincroft1710

eattothebeat wrote: »

Does anyone have any pointers/tips?
What are the costs involved in running a bar besides gas/elec Council tax etc

Non domestic rates are payable on commercial premises not Council Tax, although CT will be paid on any living accom attached to the pub. If the premises are situated in a prime retail area, the rating assessment will reflect this and for licensed premises, the actual trade plays a large part in arriving at the assessment.

Besides rent/lease, fixtures, fittings, goodwill other costs will be staff (waiting, cleaning, any sous chefs etc), waste collection, possible advertising even rebranding plus redecorating/refitting.

A lot depends on the situation of the premises, its size, the type of clientele you want to attract and its current state of repair/decor.

paulwf

The main practical issue that I see with this sort of business is the opening hours. You might close 1 day a year if lucky and need staff from 10am (or earlier) until at least midnight every day. If you don't have lots of spare cash you could easily all end up working 12+ hours a day without ever getting a day off.

For example the pub will rely on its food, will you be able to find a second chef that you trust to run it 2 days a week and for 6 weeks of the year while your boyfriend is on holiday? The chances of you and your boyfriend ever getting the same day off let alone go on holiday together are remote, there is little chance of 2 out of 3 of the business partners being allowed a week off together.

To do this I'd want £50K spare cash in reserve to tide you over in case you have a bad year otherwise you could end up working so hard whilst the business gets established you go insane.

paddyrg

If you know the owner, it is crucial to know why he is selling! I assume he's fed up of the hours for a pittance?! As a part of your looking at the business viability, remember you may need to cost a refit, replace ancient kitchens, etc., and even pay to scrap whatever the vendor is leaving (if it's dead).

What is the business worth? Probably less than you think - it is worth maybe 2 yrs profit, so get the figures and find out what the net profit is (probably not much even with high turnover - costs are so high). There are loads of pubs up for grabs at the mo, so do look around, see what other people want for theirs - if nothing else it is useful in negotiations to be able to say 'Ooooohh, actually for that price we could get the White Horse down the road, and they've got better parking/whatever'.

bangersnmash

Perhaps check how the brewery operate before committing yourself to working with them. If they're nice and sensible and can supply you what you want and need and good terms and if you can get some good references off some other people who know them well and have worked with them for some time then hopefully all well and good.

But, for instance, watch out for the big chains, some of whom have bad reputations. Some of them are hardnosed and rule people severely. Sometimes even just tread you into the dirt in various ways.

There's been some publicity over the years from various people being charged a lot and or having the costs suddenly increase, sometimes by a lot, and such like. Plus occasionally inefficiency, dirty tricks, rude bullying managers and all that kind of nastiness.

As other posters suggest, plan contingency for slack periods, downturns, various losses and nuisances arising. Expect the unexpected from time to time so, if possible, have some plans B, C and D already worked out to hopefully deal with all sorts of possible scenarios arising.

Perhaps read up lots of accounts of other bods who've run pubs and particularly also doing food of the sort that you're aiming for.

Yes, also as other posters point out, bear in mind that mostly they're hard work and a lot of hours, a helluva lot of hours all the time. A lot of them go bust all the time. For all sorts of reasons. Obviously profitability, cash flow, overheads, stock etc are vitally important issues but there are also lots of other variables to consider and that you have to stay on top of to succeed and sustain.

Good luck.

Savvy_Sue

Check whether you're going to end up with all the existing staff transferred to you under TUPE regulations (google it if you don't instantly know what I mean!) and get good legal advice about everything! by 'good', I mean the kind you can rely on because you've paid for it.

Look for posts by jexygirl in this forum too, what she doesn't know about this kind of situation (and how it can go wrong) probably isn't worth knowing. Margins, for example, you'll need to know your margins inside out (and she can tell you instantly what she's making on each cup of coffee / creme caramel / bowl of chips). Do you enjoy that level of attention to detail?

eattothebeat

wow thanks for all those replies I really do appreciate it... does anyone have anything positive relating to the pub trade??

I know that a lot of pubs are closing down all the time but I think we will have a nice here in Edinburgh...there aren't many examples of a gastro pub. Both my partner and I have worked in them in London so we want to bring that to Edinburgh. Both my parents owned bars so I feel it's in my blood!

The owner isn't selling he's letting - he's too busy to bother about this place but it still needs work done (actually quite a bit) but them the deal would be a long rent free period.
We know the hours will be long but it will be our own business and we wont be working for someone else.

What happens when you bring in a brewery .. do they loan money I heard? Do they supply spirits as well as beer?

Thanks Moneysavers!

downhillfast

eattothebeat wrote: »

wow thanks for all those replies I really do appreciate it... does anyone have anything positive relating to the pub trade??

Nope! It bankrupted me and nearly killed me having just one day off in nearly 2 years!

eattothebeat wrote: »

there aren't many examples of a gastro pub.

Why? Edinburgh isn't the a***hole of nowhere... maybe its been tried in the past and failed?

eattothebeat wrote: »

The owner isn't selling he's letting - he's too busy to bother about this place but it still needs work done (actually quite a bit) but them the deal would be a long rent free period.
We know the hours will be long but it will be our own business and we wont be working for someone else.!

Are you sure he is too busy and not just that he knows there is no profit in that pub???

Who's paying for the work? Will it get done when the owner says it will get done if he is going to pay for it? If you pay for it will it have a direct effect on what the eventual rental figure will be?

What kind of lease will it be? It's very common to have what is called a "fully repairing lease" where you are responsible for the upkeep and maintenance of the bricks and mortar of the building as well as any fixtures and fittings - if you say the property needs a lot of work doing be sure that it is done properly before you end up being responsible for it. At the end on your lease period when you either sell it on or do not renew it, you will be subject to paying for a survey to tell you how much money you have to spend to put any problems right!!!

eattothebeat wrote: »

What happens when you bring in a brewery .. do they loan money I heard? Do they supply spirits as well as beer?!

People don't bring in a brewery - they are involved with them as the brewery is usually the owner of the property. The loans you talk of are tied into lease agreements with breweries and paid back as increased rents etc... The only real dealing you will have with a brewery will be as a potential supplier for you beverage side of the business.


Good luck if you choose to go down this route but please don't enter into anything wearing rose tinted spectacles. The pub business is very different now to how it was 15 years ago. My old pub is now a building site awaiting the build of luxury canalside houses...

Poppy9

eattothebeat wrote: »

We know the hours will be long but it will be our own business and we wont be working for someone else.
!

OH had his own business and it was blooming hard. Long hours, no paid holidays, no paternity leave, no sick leave, no right to have a day or evening off etc. When business is booming it's great, when you get sick or have an accident and can't work for weeks/months, it's awful.

But if you feel you can do it, then go for it. A successful business is such a buzz:D

antrobus

eattothebeat wrote: »

...

I know that a lot of pubs are closing down all the time but I think we will have a nice here in Edinburgh...there aren't many examples of a gastro pub. ...

Well there's a few listed here...

http://www.scotland.org.uk/best-of-scotland/best-gastropubs-in-edinburgh

and that's just the first hit on Google.

Of course there may well be questions of definition, but I'd imagine there were quite a few about.