THE AGENTS
I have been valuing and selling pubs for more than 40 years and am always surprised at the vast number of times I am asked for my top-10 tips for buying a pub. They are:
1 Finance - Before you start looking, work out your finances. How much capital can you contribute and what can you borrow? Take advice from a specialist financial advisor.
2 Market research - Study the specialist trade press and see what's available and search the websites of reputable pub agents. Work out what sort of pub you want - dining, wet led, with letting rooms or a combination of all three?
3 Location, location, location - you can change the property, but never the location. This is so important. Determine
whether you want a seasonal pub or one that is busy all year round; a country location, a town or busy main road location.
4 Private accommodation - This varies dramatically in the pub industry so remember this will be your home as well as your business.
5 Accounts - It is essential to obtain up-to-date accounts and VAT returns. All lenders will require these, but you need also to understand the accounts. Look at the gross profit percentages and check staff costs are under control.
6 The property - Check your ideal pub is structurally sound and whether immediate repairs or renovations are required. Are you paying the right price for it? Your lending source will commission a valuation for which you pay. Read it carefully.
7 Competition - You need to understand the business you are buying and what the immediate competition is like. Try out the local competition so you know their strengths and weaknesses.
8 Potential - Not only do you wish to maintain the existing trade, but no doubt you will wish to grow the business. How are you going to do this? What improvements can you make? Is there scope to extend and renovate the property and has this been taken into account in your budget?
9 Reason for sale - Find out why the property is being sold. Are the owners simply retiring or is there some other reason that may effect your future decisions.
10 Staff - Staff are likely to be your biggest asset and possibly your biggest headache. Under the law, the staff generally go with the business and, therefore, you need to know the quality of the staff you are taking over.
