When people think of a business to start, they often go with whatever idea is most familiar.
To many, the local pub, with its constant chatter and its ever-present feeling of community, is the environment that they are most familiar with. When the thought of starting a business comes up, the possibility of opening a pub quickly presents itself. It’s a winning business idea.
If you pick the right location then there is likely to be no shortage of customers – with pubs being a central part of the British way of life. A great many pubs also add to their bottom lines by serving meals with their pints – and for many pubs food now accounts for a greater portion of revenue than drinks sales. Britain’s 48,000 pubs together serve millions of meals each year.
Running a pub isn’t simply about opening up, decorating it in an attractive way, and watching the money come in, though. It takes business savvy – knowledge of marketing, inventory management, people skills, the law, accounting and bartending. Hundreds of pubs start up each year without adequate preparation, and only a handful make it.
Deciding whether you want to be independent or tied
One in two pubs in Britain are owned by massive chain operations; one in six are owned by a brewery. Only about 25% are independently run. If you want to get into the pub business, simply applying for a lease with a pub chain or brewery is the easiest and cheapest way — you only need to make an upfront payment and pay monthly rent, and you get to keep all your profits.
You could either get a cheap tied lease (where you would be committed to a particular brand) or a free-of-tied lease. The usual practice in the pub business is to start with an inexpensive tied lease, make a good bit of money, sell the lease, and then take the money to buy a free-of-tied lease.
If the lease idea doesn’t appeal to you, you’ll need to find enough money to set up your own outlet.
You need to prepare a business plan
In general, obtaining a lease costs between £20,000 and £50,000. Whether you wish to take the lease route or the independent route, you need to have a business plan that sets out how you see your business developing. Your plan needs to offer a reasoned defense of your choice of location, a well-supported estimate of the turnover that you foresee, a detailed financial plan, your employment plan, and details of the experience and qualifications that you bring to the job.
Your plan will also need to include evidence of your awareness of the need for protection against unforeseen events – it will need to include your intention to buy the appropriate pub insurance cover to protect your investment.
A head for rules
Selling alcohol requires compliance with several legal requirements. To begin, licensing requires that you have no criminal record, and that the location that you choose doesn’t cause a public
nuisance. Licensing is much easier if you are a British Institute of Innkeeping National Licensee certificate holder. If you have no prior experience of running a pub, the brewery or chain that you obtain your lease from can put you through various training courses in the skills required to run a pub – legal skills, bartending, accounting, marketing and so on.
A lot of hard work goes into making a success of a pub. If the pub lifestyle is something you love, though, it will all probably seem as fun to you as an evening at a pub.
Jemma Waites and her husband Ray have owned various pubs throughout the UK over the last 30 years. When she’s not behind the bar, she’s writing about her experiences online.