A bright summer’s day in the life of a Regional Manager

Arrive at HQ for about 8.30am, and make way to the meeting room. It's all set up and ready for seven or so Regional Managers and the Divisional Director for a day's bending of the truth to please the almighty one. We get plugged in, the IT guys give us a briefing and away we go!

The object of the estates review is to annually appraise each pub on the region in order to assess it's viability, Fair Maintainable Trade (FMT) and rent for the forthcoming year. The review is meant to be based on each individual pub being run by an average tenant or lessee with the pub in average condition.  

The spreadsheets are pretty good and reasonably well thought out. They are already populated with beer, wine and spirit and AWP trade (where known by the company as not all pubs were fully tied). The rent, building insurance (joke!), rateable value and maintenance contract figures are also populated. 

What we have to do is add in the prices charged for drinks, amount of food trade, the GP and overall take and any B & B trade. This then obviously drives an overall headline income and gross profit.

Next we add in the running costs of the pub. This where it gets interesting as not all RMs know their pubs that well and many hadn't got the first idea of what the utility and staff costs were in each outlet. Never mind, in went the numbers. Only headline numbers mind you, don't get too engrossed in detail, like the newspapers, window cleaning, garden, minor repairs etc, a nice round figure to embrace the lot would do.

So type, type, type and little guffaws of laughter start around the room as the first results come in showing the licensee making a shed load, or more likely, a crashing loss. We keep going for most of the day until we have completed the entire region so by now we have a composite number for the entire region.  Generally, at this stage, the theoretical numbers are well down on the current actual. So the fun starts.

To assist us, there are HQ experts who "know" what the theoretical outcome should be, and there are also variance reports that show just where the biggest variances are against the theory. So do we adjust the theory to match what should be our local knowledge? Do we boll**ks! We adjust our knowledge to match the boffins theory.

GP too low? Put the beer prices up. But what if the pub is price sensitive and is only selling copious amounts of beer because it's cheap. Hard luck, put the prices up.

Wages too high? Tell the licensee to cut back on staff. But they're open all day. Tough, there are two of them, or there should be.

Put the rent up at that pub. But why, he's above average and the pub is kept above average condition? No he's not, put it up. And so it goes on.

Add in additional beer sales as the current lessee is below average.

Add in additional soft drinks or wines and spirits to increase theoretical turnover and profit, even if it's a daytime beer boozer and wouldn't know a Liebfraumilch from a pint of milk.

Increase the occupancy rates on B &B.

Reduce the utilities.

Take out Sky (admittedly often a rather sensible option)

Kick the tenant out and get a better tenant (never sure from where, but this is HQ. And admittedly sometimes a great option, if only we could recruit better licensees)

Put in additional machines, pool tables (even with lack of space) etc

Increase food GP levels.

Cut the overall costs back to a level where it's impossible to run.

And the biggest howler I heard was when a rent assessor (for naturally, they too were at the meeting) suggested we cut back on the building insurance as it looked extravagant - cue more laughter when I pointed out to him that we inflict the charge and it's fixed.

And so it went on all day. At the end, we may just as well have let the Moo Moo land boffins send us their theory. The rents looked great (if unsustainable), the beer volumes looked encouraging (always up, even in a declining market), and lastly - tenant income always looked rosy!  Even rosier when we took into account their great "fortune" in being able to live above and out of the business!

So when a pubco chief executive trumpets that their data shows that the average profit potential for a publican is £34000 per year before taking account of the benefit of free living accommodation you now know how the data is arrived at.

And just note one little word in that quote - "potential". So obviously, anyone under the £34000 per annum is obviously below average in a below average pub. 

Time to get out, maybe?