Assessing Different Pubs

Information You Should Obtain

When enquiring about any pub that is advertised through an agent or private individual, you should obtain as much information about it as possible. Ask for the following information:

• Copies of trading accounts.
• Whether the pub is still trading at the same levels as shown in the last accounts.
• Why the current owners are selling the pub.
• How long they have operated the pub.
• How quickly the owners wish to sell.
• How many staff are employed and whether any key employees will be leaving.
• What hours the pub currently opens.
• What scope there may be for future development.
• What facilities the pub has.
• Whether any offers have been received for the pub.
• Whether the asking price is negotiable.
• When you can view the pub.
• Whether there is anything else you should know about the pub or the area.

Appointments To View The Pub

Viewing the pub involves visiting the pub to look throughout the entire premises. For pubs advertised through an agent, you should make all appointments to officially view the pub through them. Bypassing the agent and speaking direct to the seller is likely to annoy them both and should be avoided. In circumstances where the pub is being sold without using an agent, the only approach is to contact the seller directly.

When making appointments, try to arrange to view the pub as soon as possible; leaving it too long may result in someone having their offer accepted before you get a chance to view it. When arranging a time to view the pub, ask when it would be most convenient for the seller to spend some time with you to answer any questions you may have. Aim for a quiet time of the day, when there will be no distractions with customers or deliveries.

Ad Hoc Visits

In order to get a feel for a pub and the area in which it is located, you should visit the pub on several occasions. These should be at different times on different days of the week. During these visits, don’t make it obvious that you are a potential buyer. Simply behave as a normal customer to gain insight into the clientele and how the pub operates.

Officially Viewing The Pub

Be aware that selling a pub can be stressful and the seller may feel under pressure while you inspect their business and home. With this in mind, be tactful and discreet when viewing.

Prepare a number of questions in advance that you would like to ask the seller or agent. Take time to look at all parts of the premises thoroughly and make lots of notes about the pub and its location afterwards.

Research And Swot Analysis

Back up your viewing with some detailed research of the area and prepare a SWOT analysis for the pub.

Financial Viability

Assess the viability of the pub from the accounts that have been provided. Look at any options for increasing turnover and profitability. Consider any potential difficulties you may be faced with. Prepare profit and cash-flow forecasts and seek a professional opinion from your accountant.

Prepare A Draft Business Plan

Prepare a draft business plan from the information you have been given and your initial ideas for the pub. This helps you evaluate the pub further and decide whether you want to make a formal offer. The draft business plan can later be developed into a detailed business plan if your offer is accepted.

Product Range

The range of products that a pub offers is important to its success, and changing the product range can affect trade. This is particularly true in the case of draught beers and lagers where there can be significant loyalty for certain brands in some areas. Removing a popular brand and replacing it with a less popular one can reduce your sales. If you are planning to make these sorts of changes, perhaps to obtain a brewery loan, it is wise to consider the impact this might have on your turnover. Research the area thoroughly to establish which products have strong brand loyalty. Conversely, replacing poor performing brands with strong ones is an excellent way of building trade.