Running a gastropub

fluffpot

Location will also be key - if the pub in an area that's already up and come? Better to be in an aspirational area....
Worst to be in an area where there is no demand and never will be

jexygirl

eattothebeat wrote: »

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:

Oki! Lets start at the very beginning.

Go get a cuppa, and take a breath, we could be here a while!

Have you and your partner and this bar manager friend ever worked altogether?
Have you and your partner worked together?
Are your ideas and where you want to take it, the same?
No matter how great your relationship with both your partner and friend are - it will put more strain on it than ANYTHING. There is always a tense relationship between front of house and kitchen, and when it is your partner it is way more tense.
I would have at the very least a 3 way partnership agreement drawn up, yes including yourself and your partner as well as your friend. It isnt all rosey and for your own sakes need to be covered if one or 2 want out and one doesnt and also how profits are split if there are any.

On that note, and with all due respect, in a gastro pub, your chef can make or break your buisness. How will profits be split - are you simply admin / PT bar (min wage) , your OH head chef, (25-45k) and your friend managing the bar (18k)? What if there simply isn't enough in the kitty after bills /staffing/whatever, to pay any of you one month? Who takes priority when it comes to having their own personal bills to pay? Hopefully it won't happen, but discuss it.
What if you don't want to do something one way and your bar manager does, but you are equal partners? What if your OH wants to buy some really expensive ingredients and it gets wasted? Or his GPs are out (he should as Sue says know the exact cost to plate and GP on EVERYTHING) Who tells him he is wrong / figures are not working - in fact who even checks? Same with bar - who sets prices /sources deals, as well as cellar management and cleaning? What if things are not to one of yours standards in a different area?

Are you truly prepared not to get any time together with your OH? I am not being pessimistic, I am being realistic. You can plan with the best of intentions - but staff WILL let you down - often and mostly at the last minute and when you need it most. As you say you will be working for yourself, you care, but staff won't, despite what you might think. If your buisness is closed for any reason, it is your reputation and your profits down the pan, regardless of it being your best friends wedding or a big birthday or whatever - you have a business to run - ask yourself honestly, would you miss the wedding or birthday of someone close, no matter how important, if staff let you down?
We were warned of this when we went into the trade by an experienced friend. We figured it couldn't be that bad, they were just disorganised or bad employers - but it is!

You wanted positivity, I could wax lyrical about how fantastic it is, how wonderful the life is, but the reality is always much harder to take. You have to want it more than ANYTHING, and be prepared for very little reward apart from lifestyle or lack of!
We live in, eat, drink and sleep the business, work 80 hour weeks through summer, and often go at least a month without days off for various reasons.
We earn a take home pay of £50 a week.
Yes we have the end of year profit apparently, and we have no outgoings, everything is through the business virtually, but we are a couple. There is no 3rd party who might use their phone more, or whose car insurance whilst still essential is on a BMW not a clapped out 10 year old van etc.

Yes, we work for ourselves, that doesn't mean we come and go as we please. It means that everything has a price and it is our responsibility to pay the bills.

I would not involve a brewery unless you need the finance REALLY badly, as they will tie you in, meaning your lease becomes "tied" and you will get severly inflated prices on whatever you agree to be tied on, which will depend on how much money you need... Free of tie is a more valuable asset both to you as a business and also to sell the lease on. It also means you hold all the cards with the suppliers and can play them off against each other for the best prices, as your OH will do for his food suppliers. Also check those prices monthly as suppliers slip in the odd price increases without making it obvious.

I would expect you, as would any bank, to have at least 1/3rd of the cash required to buy the lease, as well as the same amount for initial cash flow. There will obviously be SAV, as well as rent in advance as a bond even in a rent free period.

I would join FSB - the legal cover alone is worth it, and you also get a business account via the FSB with co op as they offer free business banking and the best deal IMO on card machines. Banks and card machine charges are extortionate.

I would be very thorough and test all equipment in the building, whether it seems petty or not, make sure all fire certs, H&S and pat testing was up to date, as well as equipment servicing.
I would have a contingency for large scale things to "break down" within a few weeks..
I am lucky that OH can turn his hand to anything, and the only things we pay for is boiler and fridge servicing or repair, anything else, and i mean anything, from chimney sweeping to drain unblocking and electrics we/he can do. You might think "I'd just pay someone", but £150 to sweep chimneys, is £150 in someone elses pocket, not in yours... another £400 - £500 depending on GPs that you need to take in order to pay for it. Thats the mind set you need - what can you do yourselves to avoid paying someone else - and if thats a sh1tty drain so be it!

Top of my head bills - waste removal, elec, gas, commercial rates, Broadband, phone, public liability, insurance on internals, and also externals if you are responsible in the lease terms. (I would take photos of everything and its condition for when you hand back or sell on to prove you have maintained it). You also have to pay for recycling bins. Also remember you have staff so you have to pay an employers NI contribution, and if the government gets their way, they will also be introducing a late night levvy tax if you open later. If anyone is living on site, you will also have to pay council tax as well as whatever TV licences and also potentially PRS /PPL depending what sort of thing you do - even if you have on background music or the radio. Pest control contract, you have to have a contract to satisfy EH, about £60 a month. Cant think of anything extra atm but no doubt will!

I would also barter the rent and offer half what the LL wants, and also double the rent free he is offering. You can but try, and in this climate hundreds of places are going to the wall every week.

There are also ALOT of very reputable gastro places in Edinburgh (I am in Argyll) Toms kichen for one springs instantly to mind, last I tried for a table with 5 months notice, I couldnt get in! Proves there is a market for good food in that area, but you have to plan and play hard to get a share. If what you are doing doesn't work, who is going to be the one to broach it?

Almost at the end (for now!) - the people doing your business plan should be you. All 3 of you. Your dad may be the best accountant in the world, but it is your money, your business, and YOU who needs to know your figures and cashflow, no one else. You also need to keep on top of it, and keep reassessing it to make sure you are with it, or hopefully above it in takings and below it in outgoings! I would also question whether your dad is the right person to be your accountant, in that, with the best will in the world, if he thinks things are not as good as they should or could be, will he advise you - does that mean you have a 4th person in the mix? Whose side do you take? Partner, friend, or your dads, when it comes to people wanting the best for you?

Lastly, I would be looking around at what leases / tenancies are out there, at what deals and prices, not just taking a convenient one because "I know him" and we chatted about it. There are companies desperate to offer nil premium leases /free short term tenancies with all sorts of benefits - I would look at taking a 6 month tenancy to cut your teeth and see if it really is viable for the 3 of you, before committing.
This is business and there are no friends, even the ones you work with...

We went into the industry 8 years ago, with eyes wide open, 2 years of research, preparation and learning, both very experienced in the trade, and left managerial posts in "proper" careers (nursing and theatre industry) and nothing could have prepared us for how it is when it is you paying the bills.

If I had just read this reply, in a response to my post/question - I would have read it, taken some points on board, ignored some parts thinking it would be different, (and it might be for you) and still have done it, because we wanted it that much.


Best of luck in whatever you decide, and if you want any advice in specific areas no matter how small or have any questions, just pm me, I am a mine of how not to do it!!! And then how to make out that you mean't ot do it like that all along!!! And I won't be offended if you choose to ignore me!

If you haven't noticed, and are even still here, I am someone for whom a spade is one! Despite coming over as perhaps cynical and been there done it, I am still in the trade (for now :P) so it can't all be bad!

Gold star, now go tend to those bleeding eyes having gotten this far!!!!

Savvy_Sue

jexygirl wrote: »

I am a mine of how not to do it!!! And then how to make out that you mean't ot do it like that all along!!! And I won't be offended if you choose to ignore me!

:rotfl: I love the bit about making out that you meant to do it like that all along!!!

bangersnmash

Wow, jexygirl, what a great post! And all the rest of you here as well, what interesting information you've all supplied. Well done everyone, top stuff. I now know some of the basics about pubs, just from this thread.

With that level of knowledge and experience and ability to explain it as well as this, jexygirl, perhaps you could be a consultant to the trade. If I ever gave a pub a go I'd want someone like you on board as consultant or executive manager or similar. If I could afford you. If you've got time.

Yes, quite inspiring your post here and all these other good ones as well. That's a good potted guide. Maybe, obviously only if you've got time and would want to do such a thing, you could expand it into a self published ebook and printed paper book all about it. I'd expect that there's probably always room in the market for another frontline account of how it works. By someone who does it for real, at the cutting edge.

I'm always interested in the mechanics of businesses. I've read and heard a bit about pubs and now your account here adds some more pertinent detail about the nuts and bolts. And confirms what I've heard quite a lot and that pubs are quite often a hard business.

Do I want to run or own a pub now, after reading all this relevant info about it. Um, I'll have a think about that...ok, I've thought, well, no, not at this juncture, sounds like probably too much hard work and stress and gamble. But maybe later, could be a winner, couldn't it. Some people do well at it, don't they. But what's the failure rate. Hmm.

paddyrg

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.

Of course I don't know the LL's position, and this may be absolutely right, but I would still want to make sure I had my own lawyer really push hard on the lease terms! Consider the following -

If the lease is short, what's to stop him letting you do repairs then him selling the improved property?
If the lease is long (even with a rent-free period), you are committing to a massive future cost, no matter how the pub fares - you could be paying for it long after you decide (and I pray this isn't the case!) to call it a day.

Jexy's post is somewhat super, should be a sticky ;-)

Errata

there aren't many examples of a gastro pub.

I h\ate to rain on your parade, but there are loads - new ones, old ones, ones with a change of name. Edinborough is quite a foodie place.
Taking that into account, how much will you enjoy cleaning the lavs when the cleaner doesn't turn up? It's also not a great deal of fun having to clean them whilst the place is open because someone has had an accident (at either/both ends) and it needs to be dealt with there and then.

Edinburghlass_2

Sorry, can't help it but its Edinburgh! ^^^

and I'd hardly call The Kitchin a gastro pub.

nickj_2

a couple in my village took over the local pub from a bloke who had run it down to the extent that i took my family for sunday lunch , he was behind the bar without a shirt on , barechested , the best he could rustle up was egg and chips , needless to say he didn't last much longer .
the pub should have been a goldmine , it had a lovely garden and play area etc .
the couple who took it over turned it around in a very short time serving good beer and simple pub grub , they made it into a highly profitable business for the brewery owners . after 3 or 4 years the brewery started upping the rent until it got to the stage where they weren't making any worhtwhile money so they quit and now it has had 2 or 3 managers looking after it , the present landlord is arogant and unliked by most villagers who he doesn't seem to realise are his main customer base and on most days it remains almost empty , how he makes a living out of i is anyone's guess .
if you can get it without the strings attached of having a brewery creaming off your hard work , then go for it

jexygirl

Edinburghlass wrote: »

and I'd hardly call The Kitchin a gastro pub.

You are absolutely right, that is a simple restaurant with a celeb chef, not a gastro pub, which is far harder to run when you don't have celeb status and have more than just food to deal with.

My apologies, it was a late night, crass, first thought example, trying to be helpful and honest towards the OP and reinforce the point, after a 15 hour straight shift, in my limited experience and in my also limited opinion, there were people in the area wanting good food.

And this is day 2 of 16 hours straight.

Forgive me, I thought the point of the forum was to gain real opinions and insights from real people, in that very situation, offering real advice. I won't bother in future, spending 45 mins after a 15 hour straight day, doing just that.

Edinburgh lass - whilst you clearly learned how to hyperlink, and have the ability to spell the place you live in, as well as the "board guide" title, I am not sure what else you brought to the table with your condescending comments in this post.

OP the offer of the PM still stands.

Apologies and greatest respect Sue, if you feel I am out of order and thank you very much to those who thought what i posted was relevant and said so. Constructive criticism is far harder to hand out than simple criticism.
Jex

Owain_Moneysaver

Errata wrote: »

I h\ate to rain on your parade, but there are loads - new ones, old ones, ones with a change of name. Edinborough is quite a foodie place.

Not a gastropub, but Always Sunday has closed after 7 years trading, despite great reviews in The List and TripAdvisor. If that's happening to well established places in Tourist Central the current economic outlook must be grim.