INSIGHT

Tips on becoming a multiple operator

30-Oct-2014 - Last updated on 26-Jun-2024 at 10:59 GMT

'You shouldn’t take on a second pub until your first is achieving its full potential'

You’ve run a pub for a few years, business is better than ever and you start thinking about taking on a second site. But when is the right time to go multiple? Chris Jowsey, trading director at Star Pubs & Bars, shares his tips on how to make the commitment

Taking on a second leased pub or even third or more is a well-established way for licensees to build on their existing success, expand their business and build profits without the major financial outlay and borrowing involved in purchasing a freehold. At Star Pubs & Bars, we work with operators to help them be sure it is the right time and route for them. Answering the questions below can be a good starting point.

Will you overstretch yourself?
You shouldn’t take on a second pub until your first is achieving its full potential. A good test is if you can take a holiday and leave your pub for a week without standards suffering.

Have you got enough cash?
If you have cash-flow problems in your first pub, don’t consider a second. You will need cash to fund your new business start up and all the associated costs from legal fees to stock purchases and staff wages.

Have you thought through the commitment required?
Think about the time you spend managing your current business; not only practical jobs such as organising staff rotas or ordering stock but all the strategic decisions you have to make from planning your offer to deciding on marketing.

Are you willing and able to delegate?
With more than one pub, you are not going to be centre stage in at least one any more; this can be hard if you love the social side of the job. You also don’t have time to micromanage others so you need to be able to let go while having the reporting systems in place to give you a good handle on what is going on. And when you are not on site all the time, it is vital that you can communicate and motivate well, especially when you are em-ploying managers who need to be enthused with your vision. If you answer ‘yes’ to all the above, take a look at the next steps on the road to another pub.

1. Put together a full business plan
This is essential to any successful business and doubly so for a second. You need a clear idea of your ambitions for every pub you operate in order to delegate successfully. In-clude your skills too because most successful second pubs replicate the profitable parts of the first pub. Fully understand what you do well and what you don’t and work out how you will capitalise on the former and deal with the latter.

2. Be selective with your new pub’s location
Location is always critical but with a second pub, you need to consider the practicalities of travelling between the pubs you operate. One of the main reasons second pubs fail is because the licensee doesn’t have enough time to focus on the new business during the critical early stages. Being able to travel easily and quickly between pubs is key to maximising the time available in both businesses.

3. Recruit your manager carefully
In almost all cases, you will need a manager or partner to look after the day-to-day running of your first pub while you launch the second. Make sure there is enough money in the business to pay for the best manager you can find. Recruit a person you trust and who shares the same values, work ethic and ambitions for your pubs as you.

4. Put the proper controls in place
The figures and stocks will naturally be more complicated for two businesses than one and your time will be less. Investing in good accountants and stocktakers who present the figures clearly, intelligently and regularly will help you stay on top.

5. Get organised
There will be more demands on your time than ever, so being well organised and planning how you will divide your time between your businesses up front is essential. Time out will prevent burn out, so allow for this too.

Case study

Delia and Michael Scott are this week reopening their second site with Star Pubs & Bars, the Nags Head in Henley-in-Arden, Warwickshire, following a £210,000 refurb. The Scotts already operate the Roebuck Inn in Warwick, also owned by Star.
Michael has 30 years’ experience as a chef while Delia has worked in catering and restaurant management for
25 years.

The couple are aiming to replicate their success with food at the Roebuck Inn, which they have built up to 40% of sales since taking the pub on six years ago. The Nags Head will offer a menu of excellent-quality pub food, reasonably priced to appeal to a broad cross section of customers and using locally sourced ingredients.

Delia said: “Leased pubs have provided a good route to enabling us to have our own business, built on our love and experience of food and catering. The Nags Head is a beautiful pub in a great location with the potential to build up trade by developing a food offer. It is only 15 minutes away from the Roebuck Inn so is the perfect site for our second pub, enabling us to easily be involved in both businesses.”