When the going gets tough

It's a tough market out there, so if you are looking into entering or leaving the pub sector you may find it more challenging than you imagined.

Buyers have more choice and are becoming pickier, meaning vendors will have to make sure their businesses are more desirable than ever.

Unfortunately this is where the pub market has been known to shoot itself in the foot. Falling behind on the accounts has often been an Achilles heel for the licensee, and assurances made on turnover figures are often found to be wide of the mark when a purchaser finally gets to carry out their due diligence. Don't panic if the figures are not comparable to the previous year, and definitely don't bury your head in the sand - things may not be as bad as first feared.

However, letting things slide until you come to sell the business is a surefire way of scuppering a deal. You do not want to get to the offer stage and find out that the figures initially quoted are somewhat different from what the would-be purchaser subsequently receives.Be smart

Measures such as keeping your premises maintained to a good standard are common sense. However, remember that most viewings will take place outside opening hours and usually in the morning, so the clear-up from the night before should have happened before prospective purchasers appear.

Price expectations can also be a major stumbling block, especially at the moment, as some vendors still cling to sales figures achieved in 2006 and the first half of 2007. Review the market around you through the internet, trade journals, local newspapers or just by word-of-mouth; try to gain a feel for what prices similar properties are being put on the market for and selling at.

You also need to do your local research when looking to buy a pub. Drive around the local area and see how many 'for let' or 'for sale' signs are noticeable on businesses and other pubs. Too many, and it becomes obvious that those in the marketplace are already struggling, and a new business may do likewise.

Take advantage of the internet - check for websites reviewing the business you are looking to buy, in order to get a feel for the clientele it serves and improvements that you can make to the current set-up. Talk to other licensees.

Whether looking to buy or sell a pub, all angles need to be covered. Now is not a time for knee-jerk reactions, out-of-date accounts and unrealistic price expectations. It's tough - don't make it tougher. n

Anthony Jenkins is associate director of Christie + Co​