Trade solutions
John Porter looks at a service designed to help licensees cope with red tape.
What makes a good publican? Front-of-house skills, commitment to customer service, sound product knowledge and a well-kept cellar would certainly all figure strongly. But how about book-keeping for VAT returns, or property management to ensure the annual maintenance programme is completed on time and under budget? Then there's negotiating skills for the rent review, health and safety risk assessments, marketing and promotions.
Licensing reform is set to generate an intense period of paperwork as pubs transfer over to the new regime and the new personal and premises licenses are issued.
The amount of red tape and new requirements can seem endless. Tenants, lessees and freehouse owners in particular can often feel under pressure to be a jack-of-all-trades, and many businesses undoubtedly suffer because licensees are stretched too thin.
While nobody has a magic wand, a group of experienced pub management executives have spotted a gap in the market for a company which can provide licensees with access to a wide range of tailored support services.
And they have also worked out a way for licensees quitting a pub, perhaps to retire, to cash in on the business they have built up while maintaining an interest.
That company is Inn-vestment Management and Accountancy Consultants (IMC) - and for those sceptical souls who hear the word "consultant" and immediately assume the worst, IMC's management is confident it has the necessary skills and experience to deliver what it promises - what it styles "a comprehensive support service dedicated to the licensed trade".
Mark Price, managing director, Mark Fairburn, operations director, and Lesley Philpott, financial director, first worked together at Mercury Management, set up by Staffordshire-based Mercury Inns to run pubs for other operators on management contracts.
Drawing on years of hands-on experience of the pub trade, the trio recognised that there were many publicans who needed access to a much wider range of services tailored to publicans' needs over and above the standard operational support model.
A spate of redundancies at Mercury presented them with the opportunity to start IMC, which began trading 18 months ago. Although it has had considerable success so far, until now the business has kept a relatively low profile while it built up its network of associates - specialists who can provide support to licensees as required under the Inn-vestment umbrella.
With that network now firmly in place, IMC is starting to make more of a noise about its offer. Examples from a comprehensive "shopping list" on offer are accountancy, recruitment, asset management, marketing and communications, stocktaking and legal services such as rent review mediation. It also offers innovations such as web design and hosting, and access to discounts on a wide range of products via buying agreements with some key suppliers.
The key, says Mr Price, is that these services are tailored to the industry's needs. "You could end up paying quite a lot of money for a health and safety consultant to draw up a risk assessment policy, for example. We can do it quite simply using a pro-forma built around pubs' needs," he says.
With the handover of licensing control to local authorities looming, IMC sees an opportunity and has put together a support package that includes producing an operating schedule, mediation between licensee and local authority, and preparation of applications for personal licenses.
While it is possible to envisage that some leased and tenanted operators could be concerned about giving an outside company access to their licensees, for the most part it has met a warm reception. Enterprise Inns even mails the IMC brochure to its lessees.
Mr Fairburn adds: "I think the big operators have increasingly come to recognise the pressures on licensees and the wide range of specialist support they require."
The key to IMC is its understanding of the issues involved based on practical experience. For example, recruitment, always a headache for the trade, will all too often see consultants just put a body behind the bar then collect their fee.
"We know how important it is to put the right people in the right pub, and if we don't get it correct, we won't get the business again. It's all about building trust," says Mr Fairburn.
Experience can also bring other benefits. "VAT is always putting licensees off, and it's something they often hand over to a book-keeper," says Lesley Philpott. "But when we look at the books, we can also see patterns in trading that tell us how the business is performing - and then offer advice."
The experience of licensees who have used IMC's services seems to bear this out. One, Anita Bradley, a tenant at the Lord Nelson in Newark, says: "I've always been sceptical about marketing strategies and justifying their time and cost implications. But I've been so impressed at the quality, and most importantly, the impact and growth made to my business."
However, the ambitions of IMC's directors go much further. They plan to build a pub estate of their own, and have an imaginative business model to make it happen.
They have set up a scheme called Inn-Partnership, which gives freehold owner-operators the chance to cash in of some of the equity in their business while retaining an interest.
IMC realises that many owner-operators want to keep an interest in the bricks and mortar value of their pub, especially in times of strengthening asset process, but still want to come out of the operation to retire or for other reasons.
If a pub or other leisure business meets its investment criteria, IMC, which has investment backing from the Royal Bank of Scotland, would buy up to 75 per cent of the business and form a partnership with the owner. IMC would then operate the business and earn a fee for doing so, with all partners splitting the profits.
The model has been launched at two businesses so far, the Meadow Inn at Ironbridge, which includes a five-bed B&B operation, and the Brookside hotel in Chester. In both cases, IMC demonstrated it could add considerable value through its operational experience, while continued involvement of the owner operator helps retain goodwill.
"There is a whole generation of freehouse owners approaching retirement or ready to cash in on their success," says Mr Price. "We believe the Inn-Partnership model has huge potential."
Pictured: IMC directors Mark Price, Lesley Philpott and Mark Fairburn.
