So you’ve decided you want to buy your own pub – great! But the chances are you’re probably a little unsure about what happens next.
Thanks to the ever-changing pub market, there are always plenty of good pub opportunities looking for new buyers. As of 2013, there were almost 50,000 public houses in the UK.
So how do you choose the right one? And how do you turn your dream of buying your first pub into a reality?
From finding pubs for sale to choosing the best running arrangement, here’s our guide to buying your first pub:
First things first, before you start the process of buying your pub, you need to ensure that you’re sure it’s something you want to take on. After all, when you take on a pub, you’re taking on so much more than the physical building.
Owning a pub requires dedication, commitment, and lots of hard work. It’s safe to say that it’s not all about socialising and sharing a drink with your customers. Are you prepared to put in the extremely long hours? Are you prepared to eat, sleep, and breathe the business?
If you’re up to the challenge then buying a pub can be an incredibly rewarding experience, but you need to ensure you know what you’re getting yourself into!
When it comes to buying your pub, location is key. When choosing a location, think about what sort of pub you’d like to buy. Are you looking for a quiet country pub, a community orientated suburban pub, or a bustling city pub?
Each type of pub has its own unique challenges and opportunities, so it’s important that you familiarise yourself with them before you start looking for pubs to invest in.
Your choice of pub not only depends on the style and location of pub you’re interested in, but it will inevitably come down to what you can afford. Make sure you look into the various costs involved in buying a pub and understand what you can realistically afford. This will save you a significant amount of time and effort when it comes to finding your ideal first pub.
The only way that you will get a first hand insight into the properties you are interested in, is to view them!
Ask yourself, does the property meet your requirements and if you did have to make any changes or carry out any repairs, how much would they cost you? Oh and always ask for that second viewing!
Once you’ve identified a couple of pubs that you’d like to buy, it’s time to undertake as much research as you can.
Start by listing the pros and cons of each pub then, for any that make the grade, make several visits at different times of the day, on different days of the week. This will allow you to get a feel for the clientele and the trading patterns. By experiencing the pub from a customer’s perspective, you should also be able to identify what the current owners are doing right, and what changes you’d make if you decided to buy.
So you’ve chosen your pub, you’ve researched it well, and you’ve decided it’s definitely the one for you. Now you need to obtain all of the trading information available from the vendor, including audited accounts, VAT returns, management figures, and weekly takings.
This information will give you a good idea of the likely trading levels you can expect, although bear in mind that things might change under your ownership. At this stage, it might be beneficial to consult a property accountant who’ll be able to help you with budget and cash-flow projections.
Once you’ve examined all of the financial information, if you decide to go ahead with the purchase of the pub, we’d strongly suggest obtaining a survey at this stage. This will allow you to gain a thorough understanding of the condition of the premises and the responsibility you will be taking on.
As well as a survey, it’s important that you invest in a professional valuation before you commit to buying the pub. Of course, if you’re taking out a loan or a mortgage to finance the purchase, you’ll need this valuation as part of the application. If you’re paying in cash, however, make sure you still get an independent valuation to confirm the value of the business.
If you’ve never run a pub before, you’ll need to complete the necessary qualifications and training in order to obtain your personal licence. You’ll also need to prove to a magistrate the you have a working knowledge of licensing laws before they will grant you a license to serve alcohol.