According to surveys, eight out of ten of us count ourselves as pub-goers, and more than 15 million people in the UK drink in a pub at least once a week. These figures show that most of us are familiar with the pub industry, which is probably why many people are tempted to start running a public house of their own.
But don’t let the idea of having a great social life and getting paid for it blind you to the business side. Running a pub is not all banter and fine ale, it is hard work and in the current economic climate quite challenging. But if you have a clear vision, do your homework including realistic not optimistic figures in your business case, and learn the ins and outs of the publican’s trade, it can also be a really rewarding and financially successful enterprise.
Here are a few tips on getting started.
1. Lease or a freehouse
If you decide to run your own pub, the first decision you’ll have to make is whether you will purchase a lease or run the pub as a freehouse. A running leasehold is the most popular option, as it is a cheaper start up.
A leasehold means that you buy the business, but not the property. There are two categories of leases – tied and free. Tied are cheaper as they leave your pub connected to nominated supplier(s). Which means you can’t shop around for the cheapest deals on your beer and spirits.
A free of tie lease means you can shop around for the cheapest suppliers or the ones you prefer, however the lease will cost a lot more at the outset. This may be a good investment if you want to promote real ale or beer from small local breweries.
To sell alcohol you will need a licence, which you obtain by applying to your local magistrates. You are required to be over 18, have no criminal record and to be able to prove you understand the legal and social responsibilities involved.
This is done by way of a training course accredited by The British Institute of Innkeeping and is called A National Licensee’s Certificate. There are a wide range of training providers who will help you get your certificate, with many of them offering online courses. Many also offer other industry based courses in cellar management and other essential skills for publicans, so get googling to find the right course for you.
If you plan to sell food, you will also need to register with your local environmental health department as a food preparation premises and get a food hygiene certificate. For more details on food safety see the Chartered Institute of Food Safety.
A quality insurance package for your pub is essential. It gives confidence to you and those who enter your premise and can also protect your income. Getting the right insurance is one of the best investments you can make for your business, protecting you from unforeseen events and accidents that could stop you trading.
The following is a list of pub insurance policies which you need to consider:
Stock insurance – This will include alcohol, wines, beers and foodstuffs. This cover is essential to protect your business should stock be damaged, stolen or spoilt.
Gross profit, business interruption or loss of income cover – This type of insurance covers against a disaster which would stop you trading. An example of this is the harsh winter of 2009/2010, when many bars’ pipes froze over and left businesses without any means to serve drinks or make money.
Public, products and employers liability insurance – You are required to have employers’ liability cover to protect you against claims from workers, and likewise you need public and product liability for claims from the public.
Loss of licence –This covers you against losing your licence through means which are out of your control. This also provides cover for the reduction in value of the business, without the licence.
Household insurance – This covers you for your own household goods in your flat, or residential quarters, away from areas open to the public.
Goods in transit insurance – Which protects your stock that on its way to your business.
Finally, enjoy your new venture if you do decide to take the plunge.
Be creative in your approach, get to know your customers and learn how to add value to your core business by bringing in new products, events and entertainment. Think laterally and don’t be afraid to try things. Make your trading period as long as you can, sell coffees in the morning for example or become known for Sunday brunch. Make it easy for your customers to spend their money – not just on drink but on food, snacks and merchandise. Best of luck, or should that be “cheers!”
You can find out more about pub insurance and compare quotes here.