Running a pub

Running a pub: Going multiple

By Glynn Davis

- Last updated on GMT

Yummy Pub Co's Pender: 'The co-founders are now off the shop floor and have head office-type roles'
Yummy Pub Co's Pender: 'The co-founders are now off the shop floor and have head office-type roles'

Related tags: Multiple operators, Cash flow

In the third and final part of our series on the challenges of running a pub business, Glynn Davis looks at the problems and benefits of increasing the number of outlets in your estate.

Other parts of the series​:

  • Running a pub - starting out
  • Running a pub - trading up

For licensees aspiring to be multiple operators, it can seem like a chasm has to be crossed in order to move from running a single unit to overseeing a growing empire of outlets.

But the reality is that most of the successful bigger players today built their businesses one unit at a time and faced the same challenges as today’s would-be multiple operators.

Resources

Whether it is moving from one to two or two to three pubs, a resources pinch-point inevitably occurs. It largely depends on whether there are co-founders involved and when the point is reached whereby they can no longer have a physical presence at each pub.

Chris Wilkie, co-owner of Whiskey Whiskey Tango — that operates two Star Pub & Bar leases, the Captain Cook and the Pilgrim, and one from Enterprise Inns, the Garden Shed, says he has a business partner so moving to two units meant they simply took a site each. “The big step was the third because we did not have someone physically there. We then had to allocate different jobs to each other.”

Although he acknowledges the value of them individually being on a site full-time, Wilkie admits to over-playing this: “We believed the most important thing was to have our personalities in each pub and that it would crumble without us there all the time. We soon realised it wouldn’t.”

He now recognises it is much more important to throw your best people into a new unit. “You need to hit the ground running. We were scared of pulling good people out of our existing units and this was a mistake,” he admits.

Spreading yourself too thinly was the problem faced by Keris de Villiers, licensee of the Old Sergeant and Pig & Whistle in London, who says: “When we took our second pub we had to let go of the first one. We were initially delusional, with (partner) Lee saying to the manager that he’d always
be there to do the ice machine and he’d always be there to change the lines. After two weeks he had to stop.”

Employees

What these multiple operators rely on, therefore, is having high-quality employees who they can promote and give added responsibility. Although Martin Harley, managing director of London Village Inns — that operates six pubs, including the Jolly Butchers and the Westbury — says he was initially ‘saved’ by having his pubs close to each other in north London, when he took on a third unit he was far too stretched.

“I was reeling in those early days so I was lucky to come across an ex-Belgo manager who I paid proper money to and brought in as an operations manager. He helped put systems in place that we’re still using today with six units. You’ve got to recognise your limitations and I knew I wanted to be more involved in creating new concepts rather than the day-to-day running,” he explains.

Roles

Whether they like it or not, Anthony Pender, co-founder the Yummy Pub Company and chairman of the BII, says multiple operators have to realise that ultimately their roles will change as their businesses grow. “The co-founders are now off the shop floor and have head office-type roles,” he says. “We even have an office that takes bookings and feedback from customers.”

When adding in infrastructure — especially IT-related — licensees must be careful that they work with reliable specialist partners and commit to training that ensures there are no major disruptions. Zonal has installed till systems for the likes of Loungers and Stonegate, and loyalty programme technology for businesses like the Liberation Group, and, as part of the deal, it hosts bespoke training sessions for clients prior to switching on their new systems.

Craig Hamill, head of project services and organisational development at Zonal, says: “Training is an essential part of our service, which sets us apart from our competitors. In addition to our on-site training, our dedicated training team provides company specific e-learning modules, that are particularly targeted at multiple operators. Our training covers a whole suite of topics that are vital to running a smooth, efficient and customer-focused operation.”

Processes

At Yummy Pub Company, Pender says a key challenge when growing and adding such systems is maintaining effective communications and retaining a culture across the business. “We can put processes in place but what about the culture. We have to keep it in place.”

Technology has been utilised to this end and one resource that has served the company particularly well is its blog that gives management visibility and enables them to deliver a consistency of message. Pender says they are also considering streaming meetings to employees via electronic devices.

He also stresses that it is important to evolve a business rather than expand too quickly. “If you rush growth then you’ll push your resources too much and lose guys from the older units. Don’t be pushed by people to open new sites. We carry two extra general managers who we don’t want to let go but we won’t rush to find sites for them. We’ll simply take a salary hit [temporarily],” he explains.

Jamie Hawksworth, co-founder of Pivovar Group, which operates a variety of pubs at train stations and in major cities including the York Tap, Sheffield Tap and Tapped Leeds, agrees having capable managers in place ahead of time is critical. “We piece a team together, continually thinking about who we’ll put into the next venue,” he explains.

The confidence to create teams early comes from an ability to be able to spot sites much more effectively than in the early days. ”We can look at things now and see their potential. This becomes easier the better you know your own offering.”

He also suggests that if you run a number of outlets with different elements, you can effectively create “different niches from your ‘pick list’”. Hawksworth adds: “It’s like having a recipe with different ingredients. You can pick the bits that you know will work.”

Finance

Financing also becomes easier for multiple operators as a track record and healthy cash flows inevitably mean better deals can be struck with banks and investment houses. It’s the same with the pub companies, according to Wilkie, who says multiple operators should be able to agree more favourable deals.

“The pub could be in a great location but if it is not at the right rent and the right discount, it won’t work. We’ve got progressively better deals as we’ve gone along. You know what represents a good deal because you’re wiser and you also have more leverage,” he says.

But don’t think that having multiple sites makes life entirely easy. Pender warns against complacency and the need to keep on top of all aspects of the business including even the most basic of paperwork.

“Keep due diligence in mind. As a multiple operator, if any of your team does not do the relevant paperwork and something happens [on-site], it is the owners who get the fine and the potential sentence. The onus is on the owners. You need, therefore, to do all your paperwork,” he says, clearly highlighting that while being a multiple operator can seem like the Holy Grail to a single-site licensee, focus still revolves around the smallest of things.

Accessing funds quickly to meet business needs

Mark Fuller, chief executive of Concept Venues — that operates a variety of outlets with bars including Sanctum Soho Hotel and Sanctum on the Green in Berkshire — is happy to sing the praises of businesses that are prepared to provide cash flow for his business.

“In this day and age, there seems to be no such thing as credit for businesses with multiple sites such as mine,” he says. “But releasing cash flow is crucial so that my staff and suppliers in all the locations get paid on time.

“The problem is that payment from card companies takes a long time and so does waiting for a bank loan to be approved. Using a business cash advance from Liquid Finance Partners gives us an on-time, in advance, business-smart, cash injection, which is a million times better than using traditional finance methods because you are in total control and can manage it alongside your business trading needs.

“We know our business is doing well and Liquid Finance gives us access to our funds from the future for all our sites. For a business with multiple sites, Liquid Finance automates the daily batch settlement. It doesn’t matter which card processor is used at any of the sites, the repayment amount is calculated automatically on all our daily card payments across the business.”

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1 comment

Practical issues about running a pub

Posted by Keith Templeman,

Two of the three articles, although informative, have been about having more than one site. This has to be rare - most of the people I meet have enough trouble running one business at a profit. I think there is room for more sections, such as
1a on managing money,
1b on legal issues,
1c on tax,
1d on product selection and stock control,
1e on marketing
1f on staff training

I am sure other publicans can think of other fundamentals without which you can't get off break-even let alone run more than one unit.

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