1. Is it the life for you?
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.
2. What can you afford?
Your choice of pub 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.
3. Research and seeking professional advice
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. Consider the pros and cons of each pub and visit the outlets.
When you have selected the best opportunities visit them on several occasions at different times of the day and 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 thoroughly how the pub business ticks and what you would seek to do differently.
4. Trading accounts
Once you have selected your preferred pub business option obtain all the trading information that 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 operator’s 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 experienced licensed property accountant, who will be able to assist you in preparing your budgets and cash-flow projections.
5. Condition and repairs
As with buying any property, purchasers are well advised to obtain a survey of the property before proceeding with a purchase. This, of course, 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 understand fully the condition of the premises and scale of responsibility you will be taking on before you sign any undertaking.
6. Are you paying the right price?
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 you pay.
If you are borrowing money in order to finance the pub purchase then you will undoubtedly need a valuation as part of the loan application you make. If you are purchasing the premises with cash, then you should still consider having an independent valuation to advise you of the value of that business, in the property market at the present time.
Investing in a professional valuation at this point can save you from making a mistake that could be far more costly later.
7. Qualifications and training
You need to have the necessary qualifications and training to obtain your personal licence and successfully 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 are granted a licence to serve alcohol.