Shear savings

Licensee Paul McKinley knows a thing or two about keeping suppliers in check. Having managed the takeover and running of 25 pubs in London in the course of a 15-year career, he should do. He's had his fair share of the irritations that a change of ownership can bring about - not least finding sites saddled with outstanding debts, and with goodwill damaged.

Learning the ropes from mentor Hugh Corbett, founder of the Slug and Lettuce chain, Paul branched out on his own in 2000 with the launch of the Settle Inn group. In March this year he left London to find a new challenge in the shape of a Brakspear tenancy on Salisbury Plain in Wiltshire. The 300-year-old Shears Inn in the village of Collingbourne Ducis has 60 covers, a function room and six letting rooms.

"The golden rule when taking over a pub is to keep the tills rolling," says Paul. "'Business as usual' sounds like a cliché, but a shut pub at the heart of a community doesn't win you any customer loyalty and it certainly won't endear you to your bank manager either. This means carrying out refurbishments through the night if need be, so it helps to have contacts in the building trade. It's worth paying that bit extra for a tradesman who is willing to work around opening hours."

Juggling improvements with uninterrupted trade means that what little time is left to negotiate contracts with suppliers is precious. "You're wearing three hats at once and need to be constantly on your guard against time-wasters and rip-off merchants," explains Paul.

"The phone rings non-stop, so cold-callers get no more than 30 seconds to pitch. You instinctively know when it's a sales call because they'll ask for the owner or licensee. I often say I'm not here and put the phone down! Door-knockers are worse and it's rare that they'll ever have anything worthwhile to offer.

"The only time I know I've been stitched up and didn't smell a rat was when someone turned up in overalls and a toolkit to say he'd come to fix the ice machine. It was just before Christmas, we were flat out and our ice machine had just broken down so I showed him straight to it. Ten minutes later I had a hand-written invoice and had given him £70 from the till. The only problem was I still had a broken ice machine and didn't realise until he was long gone."

Call the professionals

Paul admits there are certain things that are best left to the specialists. "We have found a no-win, no-fee rate valuation specialist via the classified section of The Publican. It's definitely worth doing if there is no up-front fee as you've really nothing to lose. They simply take a percentage of any savings they make and so everyone wins."

Another service Paul has used for the past three years is Energyhelpline.com, which ensures he is charged no more than is necessary for his gas and electricity use.

It's a free service because the firm receives commission from any utility companies they arrange contracts with on behalf of their clients. Not only does Energyhelpline.com offer impartial price comparisons, but the volume of deals it does means it will often have the best rates in the market. It will also help licensees avoid the traps that energy companies have notoriously set for small businesses.

One piece of advice Energyhelpline.com gave Paul was to sign up to the Telephone Preference Service (www.tpsonline.org.uk) which has powers to deter sales people from calling to pester you.

"The last thing you want when you have just signed a three-year energy contract is to be inundated by calls from people trying to sell you energy," says Energyhelpline.com business services chief Jonathan Elliott.

A final word of advice from Paul is to contact your local council about recycling waste from rubbish collections. "Whereas recycling cost you money 10 years ago, it's now cheaper when compared to traditional waste clearance, so you can help the environment and help your profits at the same time," he says.

How Energyhelpline.com helped the Shears

According to Jonathan Elliott, head of business services at Energyhelpline.com: "As soon as you take over new premises, your gas or electricity supplier will put your meters on 'out of contract' rates, meaning you can be paying up to three times the normal amount. The burden is on you to get on a contract and fix a lower rate but, if you don't know this, it can be months before you realise that you are being charged unfairly.

"When Paul McKinley called, we put the Shears on a new contract at the lowest price we could find in the market. This was 15 per cent cheaper than the best rate offered by the old supplier and we fixed it for three years."

Jonathan also warns businesses to be aware that, unlike household contracts, the renewal process for gas and electricity contracts is often designed to secure an "assumptive acceptance". This means that if you fail to reject an extortionate renewal offer in writing within a certain time (which can be anything up to 120 days before the renewal date), the supplier deems it as an unconditional acceptance for another 12 or 24 months.

"It may sound strange," says Jonathan, "but we now have a standard letter that goes out with every new contract we place that effectively gives notice to the supplier that the customer has the freedom to switch when the contract expires."

l Energyhelpline.com is an Energywatch-accredited, BII-approved price comparison service, helping thousands of companies each year find cheaper deals on gas, electricity, water, landlines and mobile phones. The service is free of charge. For more information telephone 0800 970 2535 or visit www.energyhelpline.com