Buying your first pub can be hugely nerve racking, with a multitude of things to consider before you get your name above the door.
Fleurets help hundreds of people a year buy their first pub and as such we should be your first port of call from the moment that you consider becoming a publican.
As a quick guide here are seven points that you should consider before buying your first pub.
Many people have the wrong impression about what running a public house is all about. Your experience of pubs is likely to be from a customer point of view at a time when you have chosen to be in that environment. Running a public house is, however, a completely different matter and requires a dedicated and committed approach.
Being a licensee is a lifestyle choice. You will need to be prepared to eat, sleep and breathe the operation. It will become your job and your social life and you will have to be prepared to work from early morning deliveries through to drinking up time. Ask yourself if you can smile, listen and talk to all your customers at all times as well as managing your own team, finances and accounts. If the answer is yes to all of these then owning a pub can be an extremely rewarding experience.
Your choice of public house will not only depend on location and style but what you can afford. An early understanding of the costs involved in buying a business (be that freehold or leasehold) and an appreciation of what you will be able to afford will save you significant time and effort in identifying the right property for you.
To find out more about the finances behind buying a property please visit our agency services page..
When you have decided what you can afford, the location and the style of operation you are seeking, you will need to undertake as much research as you can about the opportunities that are available. Consider the options and the pros and cons of each one and visit the outlets. When you have selected the best opportunities visit them on several occasions at different times of the day and different times of the week. Understand the trading patterns, the type of customers and the things that the present operators do well or could be improved upon. You should be looking to understand how the business ticks and what you would seek to do differently.
Once you have selected your preferred option obtain all the trading information the vendor has available. This should be in the form of audited accounts, VAT returns, recent management figures and weekly takings. Bear in mind that all accounts by their nature are historic and represent what has been achieved under the previous operators control. They are however a good source of information to enable you to assess the likely trading levels under your operation in the future. If necessary take advice from an experience licensed property accountant who will be able to assist you in preparing your budgets and cash flow projections.
As with buying any property, purchasers are well advised to obtain a survey of the property before proceeding with a purchase. This applies whether a property is freehold, leasehold or indeed a new letting. If you are taking responsibility for the repairs of the building you need to fully understand the condition of the premises and responsibility you will be taking on before you sign any undertaking.
With so many different styles of operation, in terms of location, trading level and tenure, there is an extremely wide variation in sale prices and a large number of factors that will affect the price that you will pay. If you are borrowing money in order to finance the purchase then you will undoubtedly need a valuation as part of the loan application. If you are purchasing with cash (and many leasehold public houses are purchased in this way), then you should still consider having an independent valuation to advise you of the value of that business, in the market at the present time. Investing in a professional valuation at this point can save you from making a mistake which could be far more costly later.
You need to have the necessary qualifications and training in order to obtain your personal licence and operate a business that will involve health and safety employment and financial laws. Prospective publicans will need to prove to a magistrate that they have a working knowledge of licensing laws before they themselves are granted a licence to serve alcohol. Anyone new to the trade or anyone seeking to brush up on their technical knowledge may wish to consider the benefits that training courses run by professional bodies such as the British Institute of Inn Keeping can offer.
If you are considering a new career in the pub trade please do not hesitate to contact Fleurets as we can provide advice and expertise on a whole range of topics, relating to the purchase of your first business and with a national network of offices can ensure that you are kept up to date with all of the latest developments in your local area.