My first word is: STOP!!!
Whoa, Wait, Hold On, Slow Down, Let’s think about this.
You think it will be easy to run a Pub? Sorry to crush that illusion but it is not at all easy to run a pub. It is exceedingly hard work. Very physically demanding and mentally challenging too.
THERE FOLLOWS BELOW, SOME GUIDELINES THAT REFLECT MY OPINION
An opinion formed from very many years of practical (and often painful) experience. if you want more detail, just pick up the phone and ask me as long as you are prepared for the truth.
If it is a Freehold Pub and you buy the property even with a Mortgage then you do stand a chance financially
If it is a Freehold Pub, and you buy it WITHOUT NEEDING A MORTGAGE that would be very very much better
If the pub you have your eye on is leased or rented from a Brewery please please please DO NOT EVEN CONSIDER IT as you have to be very highly experienced to stand any chance at all of making a Profit from such a business.
Do try to avoid signing Personal Guarantees. Such guarantees might result in you losing your home if the business fails.
Is one of your community going to be the Manager or will you have to employ a professional Pub Manager? If so make sure that you take advice on that.
If there are a number of investors as there might well be
- who is going to be in charge and take the lead?
- who will be the ultimate decision maker?
- or will you try to run everything by committee? (please try to avoid this)
My opinion is that you should NOT give discounts to the investors or anyone else. Rather let them pay full price as they normally would. They will ultimately benefit from any residual Profits anyway.
VERY strict rule please do NOT be tempted to allow anyone even investors to run ’tabs’. That almost always end in tears and disagreement.
Another very strict rule, PLEASE avoid the giving away of free drinks you will need the money in the till
Almost always it is absolutely essential to have a good Food Offering.
- One of the most common reasons for business failure in Pubs and Restaurants is the COST of the staff in the kitchen, which is of course on top of the labour cost of the food service staff.
- Do make sure that your menu reflects the type of food that people going to the pub want to eat.
PLEASE PLEASE PLEASE do not get tempted to aim too high. Usually, it would be better to completely avoid aiming for Rosettes or Michelin Stars, EVEN if one of the investors just happens to be a highly accomplished Chef. You have to ask yourself what happens if they leave, of when they are on holiday, or poorly, or even on a day off.
Make sure that you get some professional advice first, that IS absolutely essential. One of your number having had a job in a pub over a student holiday does NOT count as proper experience of running a pub.
AGAIN if you want more detail, just pick up the phone and ask me as long as you are prepared for the truth. I AM very happy to spend half an hour with you on the phone at no cost at all.
FINALLY, make sure that you do regular monthly Profit & Loss Accounts, and that one of you knows how to read them and what your expectations should be with respect to the numbers.
The above barely scratches the surface but should give you lots to think about and plenty to consider. Do seek out professional advice and do listen to it. Please.
If you want to talk through any aspects of this article or discuss how it affects you and your business, just call me: David Hunter of The Bowden Group, on 07831 407984. You can call me any time, but preferably 09.00 am – 09.00 pm on any day, weekends included. Or just send me a text message asking me to call you.