The first thing you should do when considering buying a leisure property is... establish your budget. With bank funding still difficult to achieve, knowing what you can afford is essential to identifying what opportunities you should be considering. Unless you have other assets to secure a loan, you will probably need 40 - 50% of the purchase price to put down. In addition you will need funds for fees, stock, repairs/refurbishment and of course working capital.
The most important things to consider when buying a pub are...
a) Are you suited to the life of a publican? - It's a brilliant business but it's not a 9-5 job, so it doesn't suit everybody.
b) Trade - You must fully understand what trade is being achieved by the current owners and why e.g. Are they very good operators? Are they discounting? Do they have local business connections? Sports clubs? Provide entertainment etc.? Then consider what it will do under your operation including any effects of local competition?
c) Repair - You don't want any unexpected costs when you first take over, so make sure you understand what you are taking on.
Three questions to ask the agent...
1. Why is it being sold? A genuine reason is easy to accept but beware of an uncertain or incomplete response.
2. What is the level of interest and have there been any other offers? This can help to establish the level balance of power when it comes to negotiating a deal.
3. Have any issues or concerns been raised about the business or repair of the property? An agent is obliged to disclose information that he is aware of. Be prepared to press for full disclosure of information.
The one thing you should never do is...
Make an offer and in the same breath say that you will increase it if it is not acceptable. This leaves the agent no option but to advise his client to reject the offer knowing that you will increase it.
Why is Fleurets different?
Having been selling leisure properties for nearly 200 years and with a network of offices across England and Wales, it is safe to say that we know a thing or two about agency in this sector. As a result we have bundles of information and contacts to assist and advise you about buying or selling a leisure business. Our highly experienced agents can guide you through the process introducing you to other specialist services from stock takers to raising finance, accountants and building surveyors.
What happens next?
Once you have an offer accepted on a property you will need to appoint a solicitor. An experienced solicitor will guide you through the legal process up to completion. You will need to put your funding in place, ready for exchange and you will want to get ready to implement your business plan. Keep doing your research both on the business you are buying and also the competition. Things can always change and you need to know if they do.
And my final piece of good advice is... be prepared to work hard, pay attention to detail, especially customer service, and enjoy the ride. There's nothing better than running a successful pub.