Challenges of a lease

11-Mar-2015 - Last updated on 12-Mar-2015 at 08:56 GMT

Raise a glass: Carmel Daly-Fletcher has lots of money-saving tips

Carmel Daly-Fletcher, BII Licensee of the Year 1998, has been widely recognised as being one of the top pub managers in the country. But when she made the transition from manager to leaseholder, even with her first-class credentials, she found it a challenging journey. Now, almost two years on, she’s keen to share her experiences with those considering making the leap from manager to leaseholder.

Carmel and husband Paul Fletcher took over the Bay Horse, an Enterprise pub in Meanwood, Leeds, in June 2013. It was a business that had been closed since the beginning of that year. Now it’s a thriving community pub offering food, entertainment, children’s facilities and sport. “It’s been an interesting and challenging journey,” says Carmel, “and one that has made us stronger as business people and more able to cope with the uncertainty that running your own business sometimes brings.”

“We now have a pub to be proud of. Our food is traditional and home-cooked; we excel at sport, and with Paul’s passion for rugby, being the former coach for Leeds Rhinos and the England youth squad, he had a host of memorabilia that we used to decorate one of the areas of the bar, which is a real hit with the locals. We also have an enormous garden in which we have installed children’s play equipment an outside bar and picnic areas.”

As manager of the highly successful Skyrack in Headingley and the Devon in Leeds, Carmel was used to focusing on the running of the business, keeping costs down and being provided with the tools to monitor and manage the pubs. “All that support disappears when you take on a lease,” says Carmel. “I was used to receiving the automated profit and loss reports; marketing materials; regular visits from my BDM; and having the support network of other managers in the area. Having worked with managed companies, it’s what you come to expect.

“Taking on your own business is exciting, it’s challenging and you are responsible for the success or failure of that business. We were given advice from our network of people in the industry, which really helped. I’d like to pass some of that on, along with my own learnings, to help others considering making such a move.”

● Negotiate on everything – don’t be afraid to challenge things. It’s like working your way down a list and ticking off each one.

● Get a survey done – would you buy a house and not have a survey done? No. Therefore do not take a lease on a business and not know what you are potentially taking on. At the very least it puts you in a position to negotiate. If
it’s not workable, walk away; there will always be another opportunity.

● Your lease rental – never just think you will find a way to pay it; make absolutely sure the rent you agree is acceptable to you.

● Business rates – if you’re paying too much, get advice and appeal.

● Entertainment – if you take over a pub with Sky, look at the costs of the TV and the phone line. It can represent a big cost to the business, and one you may not be able to afford right away.

● Wages – go through the staff rotas and make sure you’re being efficient. Carmel says that while they always pay more than the national minimum wage, you need to keep on top of rotas.

● Water rates: before you take on the pub, find out if you’re on a water meter. If you are, cut down on water usage straight away. Carmel has installed a timer on the men’s urinals and asked plumbers to reduce the water pressure in the kitchen and toilets. It all saves money.

● When booking live bands or DJs, challenge their fees. You’ll be surprised how many you can negotiate a lower price with!

“It has really been a journey of discovery for us. One that has made us better equipped to build our business going forward,” she says. “There are things we would do differently, like look to buy key equipment rather than rent – we bought new a glass washer, ice-maker and other equipment, including a coffee machine, which we’re paying £207 a month for 39 months – do the maths, that’s £8,000.”

Carmel concludes: “When you’re a lessee it’s your own business, and going from being a manager where you are looked after and supported, it’s challenging. However, follow our example, be resilient and save costs and get the best deals. We’ve invested our profits back into the business and it’s paying off. I’m now looking at what awards are on the agenda to add a few shiny trophies to that cabinet we have!”

Carmel Daly-Fletcher has managed four pubs for three pub companies, Whitbread, Laurel and Greene King: O’Hagans/the New Inn, Headingly; Hanrahan’s, Sheffield; the Skyrack, Headingly; and the Devon, Cross Gates, Leeds.

This article is available to read in the March issue of BII Business magazine. For BII membership visit here