January is generally a quiet time for pubs - but the busiest for the pub sales market. By Paul Davey.
January and February are usually the quietest months in the licensed trade and consequently are when many publicans consider hitting the beaches of Tenerife or Gran Canaria.
But before you reach for the phone to book your tickets, consider this - the months of January and February are also traditionally when activity in the pub sales market is at its busiest. If you are thinking seriously about selling or buying another unit, you would be well advised to hold off on your dash for the sun.
This is the time when many operators in the trade start to get itchy feet, so contact the agents to see what is available on the market - and particularly what is new to the market.
Activity among first time business buyers is also heightened - often due to disaffection or frustration with their current management unit or tenancy.
There is no doubt about it, as agents and valuers specialising in the licensed trade we see more businesses coming to the market at the beginning of the year than at any other point in the calendar and as a result, buyer activity is raised significantly due to the increased choice of new opportunities.
The canny seller will take advice early, with many businesses achieving a good number of viewings and offers before the onset of spring. Many owners think waiting until spring or summer is the right thing to do when, physically, their business appears at its best. But activity among buyers is nowhere near as busy as in January or February.
With time on their hands, operators looking for a move become far more pro-active and any agent worth his salt will capitalise on this to sell existing units already available, as well as the more prized new instructions to the market.
Act now!
Little else affects the sale price more than the principle of supply and demand. Demand for licensed businesses is, as we have already pointed out, at its height at the beginning of the year, when operators have the time to become more pro-active in their search for new businesses.
Take advice from market specialists
Preferably take advice from more than one. The old cliché "jack of all trades - master of none" can have a serious financial resonance when deciding which agent to advise and act for you in your sale. Agents specialising in the licensed trade are not only fully aware of what the market is paying for businesses, but also who is paying those prices. Specialist market knowledge and reach can be decisive factors in not just selling - but selling quickly and at the best price.
Consider which agent to use carefully
Not all agents are the same. An agent with local, regional and national coverage is important but so too is which part of the market they are strategically involved in. Some agents have strong - sometimes too strong - allegiances with corporate operators, both in acquisitions and disposals. Remember, you want your agent to act for you, a private seller, and not in the interests of the corporate market which will obviously wish to pick your business up for as little as possible. Agents offering the lowest fee are rarely the best - those working hard to deliver the best will expect to be paid well for performing well.
Be prepared with your numbers
Keep copies of your VAT returns as well as pressing your accountant to deliver your last year's accounts as quickly as possible. The more up-to- date the financial information available to a purchaser, the more secure they will feel in paying your required price.
When selling it's got to be business as usual
No business stands still. If you are not driving it forward, it will start to go downhill which can seriously affect its desirability. Just because you have decided to sell, you cannot afford to allow lack of enthusiasm or commitment to the business to adversely affect how you present it to would-be buyers on viewing appointments.
With pubs taking an average of only 10 to 12 weeks to sell in 2005, going to the market now should see you with a sale agreed by March and a completed sale by June.
Pictured: This traditional Georgian coaching inn with an award-winning restaurant and accommodation is up for sale at £275,000 leasehold through Davey & Co. The Buck Inn Hotel & Restaurant is situated in the village of Buckden, North Yorkshire.
- Paul Davey is managing director of Davey & Co, business sales agents with offices in Nottingham, Leeds and Oxford. Tel: 0115 979 9189 or visit www.daveyandco.com.