New licensees...make sure your start-up is sound

However, it is imperative you take time to properly assess the opportunity before you jump in and, with this is mind, here are some key points to consider: 

• Have a robust business plan. Be clear as to the concept (traditional pub, high-end cocktail bar, or something else?), the clientele you wish to attract, the hours you wish to operate, and so on
• Costs. Make a proper assessment of the costs of running the business including any rent, rates, leasehold premium or freehold costs. Do you have (or can you
• borrow) the money required to start and sustain the business? Make realistic estimates of your weekly and monthly sales, costs and overheads (you may wish to instruct an accountant or equivalent financial adviser to assist with this). If you cannot make a decent profit, and any negotiations to reduce costs are unproductive, you may wish to reconsider the venture.
• Instruct a property lawyer to advise whether the lease agreement (or freehold) is operationally and commercially viable. Consider the length of any leasehold term and other provisions such as rent increases, break clause (allowing you to leave if the business is not successful), any repairing obligations as well as the option to
• assign your interest in the property (if, down the line, you wish to sell the business).
• Assess the property and employ a surveyor to establish whether it is in a good state of repair. This will be vital where the obligation in the lease is upon you to “put and maintain” the premises in good repair. You do not want to find that, on taking the site, it falls to pieces and it is left to you and your wallet to repair it. Furthermore, if a refurbishment is required, consult a contractor to discuss this, including costs and timescales for any works — the last thing you would want is a large invoice for works which you did not budget for!
• Check the planning position. Your lawyer should check if the property has planning permission. If so, check if you have the correct class (eg, A3 or A4 use) and that there are no conditions attached to the permission that will adversely affect your intended operation, for example a limit on hours or use of any outside areas.
• Check the licensing position. If the site previously traded as a licensed business then your lawyer should check whether any current premises licence is still in force. If so, review whether the licence’s permitted hours, activities and attached conditions are acceptable or whether a variation of the licence be required. If there is not an acceptable premises licence then you will need to consider whether you are likely to get the licence that you want. Is there a cumulative impact area that will make obtaining the licence you want very difficult and more costly?
• Protect your position. I would strongly recommend making the agreement to take the property conditional on both satisfactory planning and licensing permissions being in place.

Starting up a new pub will involve a lot of considerations — make sure you get professional advice at an early stage to ensure you make a sound and reasoned decision.