Ever wondered about the who, why and what of entering the licensing trade? Chartered surveyors Fleurets conducted a poll - Michelle Perrett investigates.
Chartered surveyors Fleurets have been conducting a detailed poll on behalf of The Publican to gauge why licensees join and leave the pub trade. The research, conducted by the property agent throughout May, asked licensees and potential licensees acquiring and selling pubs through its national offices, some essential questions about why they leave the trade and what makes someone buy a pub.
The poll asked people what they were doing before entering the licensed trade, why they entered the licensed trade and what made them leave it?
What made licensees leave the trade?
Almost a quarter of licensees in the poll said that they were leaving the trade due to insufficient funds. It seems that the image of the struggling licensee paying high rent and beer prices is perhaps not as rare as pub companies tend to think. For a trade that wants to attract entrepreneurial and profitable business people, this is a shockingly high statistic. On top of that seven per cent of licensees say they need a capital injection to help their business move forward and are being forced to sell up. The poll is not all bad news as 14 per cent are selling to move on to bigger and better business ventures.
According to Fleurets: "The findings clearly identify weaknesses in our business. Reasons for leaving the trade such as 'do not like the trade', 'dispute with landlord' and 'need capital injection', identify the importance for the landlord, vendor and agent to understand the needs and perhaps more urgently, the expectations, of the licensee."
What sort of people enter the licensed trade?
On a more positive note, the poll decided to ask people where they came from before buying a pub. Unsurprisingly, 52 per cent were already in the trade and were looking for a new or additional outlet. It was found that 28 per cent were completely new to the trade altogether, coming from a wide range of employed backgrounds.
According to the results, the growth of food in pubs and the growth of the gastropub phenomenon has made pubs a more attractive option for chefs, enabling them to buy their own business. Eight per cent of people in the poll were chefs who wanted to operate their own outlet.
Richard Negus, head of Fleurets' restaurant department, believes that the problems on the high street have brought rewards for food led operations. He says that the saturation of towns and cities with pubs and bars and the economic downturn means more sites being transferred into restaurants.
"The UK eating-out business is expected to grow by more than 20 per cent over the next five years," he said.
"Many more pubs will convert to restaurants as operators go in search of new premises in order to meet increased consumer demand, and realise the opportunities to reap profits from failing pub businesses. Talented chefs with good business acumen can look forward to a bright future."
What attracted you to the licensed trade?
Being your own boss, wanting to run an East-End boozer such as the Queen Vic, or a community boozer like the Rovers Return - all glamorous reasons why people may want to enter the pub trade.
But what did the Fleurets poll say? Thirty-seven per cent of people surveyed were already in the trade when they took their first pub. Some of these worked in pubs and bars, others had grown up in the trade as a family business.
Of those new to the business, it would seem the pub trade reflected an image of freedom and the ability to be your own boss, 18 per cent saw the trade as an opportunity to be self-employed and 13 per cent viewed the licensed trade as a way of running a family business.
Escaping from the shackles of the rat race lured 14 per cent of those questioned, who were looking for a change of direction. Thirteen per cent identified the trade as a business investment, and the remaining and worrying five per cent entered the trade because it "sounded like fun".
Why licensees leave the trade
- Insufficient funds: 29 per cent
- Retirement: 20 per cent
- Better business: 14 per cent
- Dislike trade: 13 per cent
- Landlord dispute: 8 per cent
- Need more capital: 7 per cent
- Marital dispute: 5 per cent
- Ill health: 2 per cent
- Smaller business: 2 per cent
Who enters into the trade?
- Already in trade: 52 per cent
- New to trade: 28 per cent
- Chef: 8 per cent
- Investment: 5 per cent
- Property developer: 3 per cent
- College leaver: 2 per cent
- Retiring: 1 per cent
- Unemployed: 1 per cent
What is attractive about the trade?
- Already in trade: 37 per cent
- Self-employment: 18 per cent
- Change direction: 14 per cent
- Family business: 13 per cent
- Investment: 13 per cent
- Sounded like fun: 5 per cent