Steve Tucker, director, Humberstones
Like many recent MA contributors, I have spent a lifetime in the licensed trade starting at the tender age of 19 as an off-licence manager for Wineways.
At the time half-pint cans of Courage beers, Harp lager and Guinness were being sold at half the cost of the same volume in pubs. No change there then! What, of course, is different now is that there are many more competing claims on the leisure pound and on one's leisure time — it is easy to see why it has become harder for pubs to attract customers.
There are those who have been proactive in adapting to the new challenges faced by today's licensees, and others who continue to blame everyone but themselves. Again, no change there then!
However, with declining beer volumes, lower gross profits for tied pubs and overheads rising faster than inflation, it is not difficult to see why many pubs are struggling to keep up with rents and repairs. Could this be why so many pubs have negative and worsening cash flows, and why so many are worth less than a couple of years ago and why many are closing?
Licensees have had to consider legislation relating to disability, fire safety, employment and, of course, smoking. They now have to listen to talk of a credit crunch and a falling housing market, and in October this year energy performance certificates will need to be obtained by those wishing to sell.
In business transfer there are, as with many sectors, thoroughly respectable firms and those who turn up on a horse wearing chaps and spurs.
To anyone contemplating the sale of a lease or freehold licensed business, I strongly advise them to choose their agent with care. Find a firm whose directors have many years' experience in the licensed trade and who can provide you with a reasoned assessment of the business value, supported by comparable evidence.
Ideally choose a member of the Association of Valuers of Licensed Property and ensure that the person dealing with the sale of your business is the person who has actually seen it.
For Humberstones' Norwich office, 2007 saw a significant increase in fee income, the culmination of hard work and dedication. We, like so many licensees, have seen a slow start to 2008, but are confident that in spite of the pressures mentioned earlier, the year will see a healthy number of sales at realistic prices.
It's an excellent time for entrepreneurs with foresight to take advantage of the current market conditions and get themselves a good deal.
