People choose to be in business for a multitude of reasons. However, whatever your business goals, dreams and aspirations, the primary measure of success in business is profit. Profit (or "what's left at the end") is what successful entrepreneurs usually seek to achieve when running a business.
Of course, successful businesses aren't always in profit from day 1 - usually it takes time to build and develop a business so that it generates a healthy profit - and this is the greatest challenge for all startup businesses.
Ultimately, generating a healthy profit is the difference between a successful business and a charity, between a successful business and a hobby and a successful business and a failed one.
Whatever business venture you choose to embark upon, the desire to make a profit (and as big a profit as possible) is likely to be the common denominator you share with all business owners, big and small. And so it is with owning and running a pub. As the operator, you are there to make a profit and the type of pub franchise that you choose to run will, to a greater or lesser degree, dictate how you make (or perhaps even lose) money.
So how do pubs compare to other retail franchise businesses?
Well, there are the obvious similarities and there are also differences. Publicans, like shopkeepers, are retailers. Publicans sell products (usually consumables over the bar) in a similar way to a clothing retailer selling childrens clothes on the high street. And in the same way that the retailer comes in a myriad of different guises, from convenience store, to dry cleaners, electronic goods shop to supermarkets, so it is with food pubs, wet led community pubs, out of town destination pubs and late night venues.
Like individual high street retailers, publicans are their own boss. They decide on their business strategy and constantly make decisions that will either improve their chances of being profitable or alternatively hinder (or have no impact) their potential profitability. Generally, business people decide to adopt an initiative if it will help them make money, save money or improve their product.
Publicans tend to live on (usually above) the premises and have a home and business under one roof - which is one obvious cost saving benefit of running a pub. Another is that they don't need to pay heed to the rush hour - publicans usually have the shortest commute to work! That said, the publicans hours are longer than those of the average high street business, but the converse is that the rewards enjoyed by the publican can reflect this additional time.
Like other businesses, the pub operator can choose to be a small "one off" business, or alternatively aspire to be a multiple operator or a large chain, branded or otherwise.
Whatever you wish to achieve in business and whatever your appetite for growth, pubs present you with the business opportunity and the chance to take control of your own destiny. The rest is up to you.
Running a pub can be great fun, profitable, and very rewarding for you and your family. It can mean a completely new life with stacks of benefits. But it is a very serious step to take.
The first thing that you will need is a personal licence to sell alcohol. Instructions on how to gain this licence and the application form are on The Department for Culture Media and Sport website. Alternatively the forms are available from your local authority.
To apply for a personal licence you will need a new qualification that proves that you have a basic understanding of licensing law. The most widely available recognised qualification is The National Certificate for Personal Licence Holders (NCPLH). This certificate is awarded by The British Institute of Innkeepers.
You'll also need to make sure that your pub can support you financially, which will require:
- Business skills
To handle issues from VAT and tax, to preparing a business plan and calculating how you can make a profit. - Management skills
Because you'll be in charge of staff and will want to get the best out of them. - Capital
To start running your own pub business you'll require access to at least £15,000, of which £10,000 should be unborrowed. - Commitment
The hours are long and the work hard. - People skills
Your customers will be your greatest asset and you need to look after them, even the awkward ones.
Put all these elements together, find the right pub and your life could be transformed.
We recommend that you take this advice:
- Do not sell your home to pay for your business. If your plans do not work out, you still need the security of your home.
- Go on a training course provided by one of the major pub companies before you start running a pub. If you decide not to run a pub after the course, it will still be money well spent and you will end up with recognised, professional qualifications.
- For a taste of the pub trade, try working seven days and seven nights in a pub.
Running a pub is demanding and can put a strain on your health, emotions and relationships unless you are prepared. You should ask yourself these questions.
- Can I cope with the long and unsociable hours that are involved in running a pub?
- Can my partner and I work together all the time if we haven't done so before?
- Will we be able to give our children the attention they need and run a pub at the same time?
- Can I cope with the responsibility of managing my finances when I am self-employed?
- Do I have the knowledge and skills that are needed to run a pub?
- How do I react to intense stress and pressure?
- How do I feel about my partner getting unwelcome attentions from my customers?
- Do I understand that running a pub is a way of life and not a job?
- Do I understand the health risks that are associated with the licensed trade (for example, stress, alcoholism)
What if you don't have the required capital?
- If you've got previous pub experience then could consider a management position at one of the managed pub operators.
- Maybe you could try going into partnership with a friend or members of your family. Some of our successful pubs have been funded, in part, by parents.
Or try to save the required £10,000 unborrowed capital. We know it'll be hard, and will take some time, but it'll really demonstrate to us that you have commitment, and want to run your own pub
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