Seasonal dips in trade and unexpected crises can make it very difficult for a pub business to thrive. Short-term finance can help redress the balance.
Most pub licensees run a business that is, to some extent, seasonal. Just about all of them will experience peaks in the summer and in December, and battle through a tough spell around February. For pubs in holiday destinations, the uneveness is even more pronounced and there are many that reduce opening hours during the winter.
All this squeezes the amount of money going into the tills, hitting cash flow. With any luck you will have set enough aside to ride out the rough patch. But there is always the danger of finding yourself in a situation in which you are merely surviving.
You can pay the bills but never quite accumulate enough to invest in the pub and give yourself a chance to expand the business and reach a more comfortable financial situation.
It doesn't have to be like this, though. There may be more positive action you can take and there are plenty of examples of operators which have found innovative solutions to the problem.
To do it, however, you will probably need help - an injection of money to bridge the cash flow gap and give you some breathing space - and there are companies that specialise in doing just that.
Kirk Smith is the managing director of Armada Finance and he is used to the challenge of helping businesses bridge seasonal trends and boost their cash flow.
"We tend to find that many business owners who run pubs and hotels that are subject to seasonal trends use the quieter times to refurbish and upgrade their establishments," he said.
"Of course, you can't and shouldn't need to undertake a major refurbishment every year, but there are always smaller projects to consider. This could be something as simple as upgrading decorations or seating areas, the kind of jobs that require short-term finance agreements.
"This kind of finance option is something that works really well and we have lots of publican clients who have taken short-term funding for just this type of project."
Refurbishment may be a great option for businesses that can afford to "take a break" in the winter. For many, however, this option is a non-starter and they have to find cleverer ways of bridging the cash flow gap.
A finance house such as Armada will work with these businesses to find opportunities for increasing sales, helping licensees to identify things that they may have missed in their business plans.
Once an opportunity has been spotted, the backer will assist in putting the right funding in place to allow the pub to capitalise on it. The possibilities are many, from offering accommodation to promoting a specialist or niche product which brings in customers through the winter months.
The Fox and Goose in Barrow Gurney, Avon, for example, saw the potential in "exclusive" accommodation. Since its recent refurbishment and expansion, it has become a stop on the itinerary of many passengers flying out of Bristol Airport.
Aware of the growing popularity of the airport, which experienced a 50 per cent increase in business after becoming a new destination for one of the budget airlines, Peter and Julia Wilson took on the lease of the business last year.
They have since transformed two stable blocks into stylish accommodation units comprising five en-suite rooms. Nine more rooms are currently under construction.
Another lessee, Donna Simms of the Famous Firkin in Newquay, Devon, sought help when trying to carve out a niche that would set the business apart.
The aim was to give the local community something special away from the seaside town's busy tourist centre and an extensive programme of refurbishment has since transformed the interior beyond recognition. Some 400 people can now drink in the refurbished main bar or at the new Jack Daniel's bar devoted solely to whiskey connoisseurs.
The restaurant has been decorated to match a new high quality à la carte menu based on fish and game while entertainment is provided on Friday and Saturday nights and the new function suite is ready to host all kinds of events.
The development was planned with the help of Armada's regional manager, Steve Hunt. "Steve came to the pub and spent two hours discussing my plans for the future," said Donna. "I didn't have to wait weeks for an answer. The finance was agreed there and then."
Cash flow gaps may, of course, be caused by forces out of your control that are even more unpredictable than the weather. Changes in the economy or a crisis like foot-and-mouth outbreak in 2001 can have a massive effect on the pub trade.
One area badly hit by foot-and-mouth was the stunning Pembroke countryside which was off limits to visitors for more than 12 months. That problem was compounded by the impact of the events of September 11 which brought tourism in Wales down to an all-time low and left many small businesses insolvent.
Pembroke is now back in business which is a great relief to, among others, the Salutation Inn at Newport, Pembrokeshire, which lies at the heart of the UK's only coastal national park.
During the difficult times John Denley, the owner of the 16th century inn and a former president of Pembroke's licensed victuallers association, turned to Armada Finance for assistance with funding for the variety of equipment needed to create a more tightly tailored business.
The Salutation's restaurant now serves a range of local food, including home-smoked salmon from the nearby river. A short-term funding deal allowed John to concentrate on other aspects of the business, especially while cash was in limited supply.
Manageable monthly payments released capital to enable the business to survive the foot-and-mouth period and now tourism is flourishing again.
An advertising campaign launched by the Welsh Tourist Board has inspired John to invest in and expand the business further.
Small brewers, too, have been helped by short-term finance. Cornish brewer Skinners has expanded fast since it was formed six years ago and is planning a move to larger premises.
When looking for a finance house to help you bridge a cash flow gap you need to find a firm with a flexible approach that takes into consideration the specific needs of your business.
"It's important for us to recognise the nuances of the particular industry sector and respond accordingly," said Kirk Smith. "As long as publicans take the time to prepare a well thought-out business plan, obtaining short-term or long-term finance to solve seasonal trends in the business really shouldn't be a problem."
- Armada Finance has many years experience working with pub groups and independent publicans across southern England. The company can be contacted on 01392 431171.