Never one to ignore an opportunity, Mrs C has spotted a pub/restaurant just outside a Cambridgeshire village that is available as a going concern. Both of us have experience in tourism/retail/self employment/other things, though neither of us has run a pub/restaurant.
It currently does reasonably well - the landlords are retiring, not going bust - but are pubs (even well-run ones) on an inevitable slide into decline?
We aren't after riches, just a reasonable, sustainable income. I'm sure we could do it, but should we?

Anyone have any experience?

All I hear in the radio is about small local pubs going bust, at least 4 a day back in 2008 so god knows how many now.
Its a shrinking market with thin margins.

Its a life style choice, not something you can really close doors on at 5 and forget work, if your after that and have a backup plan, go for it but at present it wouldn't be my choice of move.

Jim,

If you really wan to do this, then why not? There are plenty of pubs and restaurants that are doing pretty nicely, despite the difficult times.

However .... there are some things to consider

- You realise that free time will be a thing of the past
- It's very hard work (can be very rewarding too)
- If you have only limited experience or knowledge of the trade then maybe it's not a great idea
- Look at the reasons for the current success of any business you consider buying in to
- Is it the food and if so will the chef be staying or was the owner the chef
- Do they have a good functions business and could you continue to run that

My daughter spent years running everything from village type pubs to large hotel functions and whilst some of them were very rewarding (not necessarily in monetary terms), she finally had enough of never having time for herself.

But don't let me put you off It can be great fun too!

Paul

Down here in the Medway/Weald area there are several pub/restaurants that do fantastic business, and also some that are deserted. From what I can see it is the quality of your chef that is vital. There are still many people who will go out to eat and pay good money for good food. I can mention about eight or nine semi-gastro pubs that you need to book WELL in advance, and without wine the spend is £15 to £20 a head. The food MUST be good though; Weatherspoons wouldn't work!

Running a pub for alcohol sales is a non-runner unless you are in a town. It also helps if you have a connection with a local cricket or rugby club - I play cricket for Linton Park, and the money we spend in our local pub (even through the winter) is a nice little earner

That has been my experience too, Sam. I think it's a fact that wet sales cannot sustain a pub, especially not in a rural environment, so if you take on a place you will be looking at becoming a restaurant manager with a bar attached. I've never really got on with a 9-5 type job and nor has Mrs C. We are much better at unconventional work and I think you're right about it being a lifestyle choice.
Before I go too far down the route of researching other aspects, first and foremost I just want to know if - in return for a reasonable amount of work - it can fund our pretty modest lifestyle.

Thanks for the replies; it is encouraging to know that at least some establishments can still make a living. The place we are looking at is on a main(ish) road outside a village. It isn't going to get much trade as a traditional local, despite being the only pub in the village, simply as it is too far out to walk to. I believe this does have advantages in terms of council tax, though. Passing trade is fairly plentiful - provided you can get people to stop, of course. My wife has known the place for 20 years (in fact we had our first date there), and it does seem to run pretty well, without having a particularly special chef (one of the current landlords, I believe).
We've never had much in the way of free time (looking after 5 kids aged between 10 and 17 will soon get rid of that), but their needs are now easier to cater for, so we would at least have the time available.
As mentioned above, we aren't looking for a financial golden goose, but something that can at least sustain us in return for our commitment and enthusiasm.

Rob40 runs a restaurant - might be worth picking his brains on how that area of business is looking (different area of the country, but might be useful).

Scooby and Bobbs gave it a bash and I dont believe it went well, although I wasn't particularly frequently speaking to them at the time to know. If you are still in touch with them at all - Facebook maybe - might be worth a shout? Although I guess that was quite a few years ago now.

The thought of it would make me run screaming for the hills, partly because I'm not all that good with people and partly because it sounds too much of a risk - but I dont see you as a particularly risk adverse sort of chap.

As far as the brewing industry goes it's well known the market in general is in decline and as Sam says pubs are closing - it's actually at the rate of less than 1 per day and loads of them are inner city or suburban pubs that have almost zero custom due to well publicised issues.

However, the pub groups who offer a "holistic" approach (ie decent beers + variety, food, some limited entertainment and possibly accommodation are doing rather well. As i sit here typing this in Burton, no less then 3 have opened this month alone with 500 yards of where i sit. Clearly there is a strong market for the "right" type of pub/restaurant. Within 5 miles there are at least 6 or 7 similar but private hostelries offering decent food at mid-range prices and they thrive - one is even veggie/vegan orientated.

Good luck Jim

Jim

My dad was a publican after I joined up. It's a lot harder than people realise. he was a manager, so didn't have half the stress of an owner or tenant landlord. I ran one of his pubs as a relief for 2 weeks, it is a 24 hour a day job, and particularly stressful if you have kids.

Although the mein host bit is great, it's constant hard work. There is quite a high attrition rate among marriages (or there were in the 80s). It was certainly the last straw in my parent's marriage.

Sorry if I sound negative, you just need to be aware of some of the pitfalls!

If you go ahead, good luck, what's the FCCUK discount?

Sounds like an interesting opportunity, massively hard work though.

I assume it's a free house, rather than tied to one of the chains - the place I ussed to drink in was owned by Punch Taverns, and the rent they were expected to pay, and the really crap deals they were forced into for drinks would make me feel I was getting up every day to be royally shafted and paying for the privilige.

Place I drink now is owned by the landlord, and he seems to have a far better life.

Oh, and remember to give at least £400 a month too Murdoch if you want to show the football!!

Sounds like the key is..... open up within a mile or two of Proccy

sounds like it could be a challenge Jim. Why not go and have an informal chat with the current owners see what their thoughts are, estimate turnover, profits etc

There used to be four pubs within spitting distance of my parents house, now down to one. Which is pretty much emtpy of an evening.

You should have a look and see what other pubs/restaurants are for sale in the surrounding area, if there are lots then run a mile.

Pubs that I go to that appear to be doing well are generally not tied to a brewery and will have a good range of locally brewed beers and serve good food. Doing a sunday carvery for between £10-20 seem to be the most popular.

There is a very good pub in a remote village (literally 10 houses), the food is outstanding, the beers are all independents, its in the middle of nowhere so you dont have to be in the busiest of place to have a thriving pub . Its difficult to get a table on a Sunday, very busy on a saturday but very quiet monday-friday.

If you buy the pub outright I suppose you could always turn it into a family home if it didn't turn out right.

There is still good money to be made in the pub/food trade.
In my opinion upmost is the location. So check out the pub at different times of the week/weekend.
As Chris says go and have an informal chat with the owner.
If you are then still interested ,ask for a formal meeting with the boss and take along your accountant.
Good pub food does not have to be to fancy,but can be also at different times of the week.
Check out how the beers are supplied and from who.
My son works here. http://thefleurdelys.co.uk/ Its not a million miles from you Jim.
Maybe take a look and see how they do thier ales and food etc. Howard would be happy to show you around.
They employ staff there so must be doing something right.
I reckon you could enjoy it Jim and be happy there. Good location for the town also.

The law used to be that a pub had to be closed for a very long time before it could be changed to another use, so I wouldn't bank on that.

My experience of the pub trade in the past few years:

A couple I'm good friends with moved down to Norfolk to run a pub. They put their heart and soul into it, had a good crowd of regulars, did meals, offered B&B (steady trade from local businesses, apparently), did take-away lunches and had a booming social scene, but they still ended up bankrupt.

My best friend's mum runs a pub in Derbyshire. Similar sort of thing (except no pool team/darts team/quiz night, etc.) and 4 very high standard B&B rooms. She does most of the cooking herself and offers a Sunday carvery. I've stayed there quite a few times and the hours that she puts in are incredible; first up, last to bed sort of thing. She does OK, but she owns the pub outright with the mortgage paid off before the current downturn in the pub trade, so I'd imagine she has much lower overheads than many landlords.

Personally I'd run a mile from getting into this trade at the moment.

Pub in the village closed three months ago, planning permission granted to demolition and turn into four bedroom house and the adjoining car park has permission for four, four bedroom houses.

The same in the adjoining village, pub closed and turned into four bedroom (boxes) houses.

Things appear to have changed.

Tricky one Jim, as has been posted above.

My uncle was a publican for about 30 years, he even ran some pubs in Cambridge so you may even have met him - The Royal Standard, and The Cambridge Arms, and in Ely, the Red White and Blue (now demolished)

He would NEVER return to it, as the profit margins, or indeed even the opportunity to make even a modest profit are slim to none.

Long gone are the days of all day drinkers, having an off licence on the back, people popping in for a quick one after work etc.

Wet sales are almost non existant thanks to the enormous tax on alcohol, and of course the smoking ban which everyone voted for in the referendum... oh no wait...

Two evenings a week, i.e Friday and Saturday you will see a few people, but more often than not, you will be the only one in the bar.

As for food, well keep in mind that the recession has hit everyone, and maybe going out for a meal at £15-£30 a head is not going to be an affordable option for most.

There are of course exceptions to the rule, some pub/restaraunts are ticking along nicely, employing staff etc as has been mentioned above, but it really is a dying trade, and one you should not enter into with the hope of making any real money.

Unless you can get a non brewery/company owned property, you will already have signed away circa £35-40K a year just for rent, add onto that council tax, general bills, food and drink costs etc.

I remember a few years back my old local was taking around £3500 (gross) a week - for food and drink and it still went under, trade all but vanished after the smoking ban, and 'all those people' who we were told were going to flood into the pubs across the country once smokers were discriminated against and forced out, just never turned up.

I guess really it boils down to your financial situation - IF you dont have a mortgage, dont owe any money anywhere else etc, it might be worth a punt just to see how you get on, but if you are already straining under the load of monthly bills in your current careers, I wouldnt risk it.

If you were looking to buy this place by borrowing against the equity in your house, or indeed selling your house to fund the move - again I wouldnt risk losing everything just to chance it.

Good luck either way Jim.

You've probably been here already but worth a read...

http://www.beerandpub.com/index.aspx

It'd be a brave decision I feel and one I wouldn't fancy at all, the hours would scare the crap out of me

My cousin took over a pub/restaurant in Comrie, Fife, Scotland. (Fantastic food - go there if you are in the area).

They have run at a profit from day 1. Their key to success is:
1) Taking over a going concern, rather than building from scratch (tick)
2) Great chef serving good food - her husband in this case (sounds like a tick)
3) Great rapport with customers and locals - both excel in this. My cousin does front-of-house, and chef comes in after cooking to chat to those still around.
4) Positive attitude.
5) Someone with a good common sense for making money. Don't sell at less than you make it for, don't give away too many free drinks, and make sure that you chase trade all through the week, and lunchtimes too.

Went to a pub near Cambridge where you could order your food on the go. Ordered food about 30mins away from them (just off A14) and it was ready when we arrived. 30mins later we were back on the road again, and had eaten something far better than any roadside services.

This is what my old man said. He owned and ran pubs for 35 years.

I lived in them from day 1 until I was 20.

I'd say; It's 7 days a week, 52 weeks a year, everybody but the boss gets hols.

You give the punters what THEY want not what YOU want them to have.
You don't get time off together.
Don't take the piss and charge silly prices, you need your punters to come back, often.
You are NEVER off duty.

Go on a brewery training week. You'll get the certificates you need before you can become a publican and a good idea of what's involved

You must provide GOOD food at fair prices. but not bloody fried stuff, it stinks the place out and fucks up the beer. Also keep it seperate from the drinkers, bar food does not exist, seperate room and/or outside.
Check out the LOCAL potential trade, no good being miles from anywhere on a cold wet winter's night.
Check out the local oposition.

If it's not doing at least £3000 per week AT a net 35% profit FORGET IT and double that if it is seasonal and/or you are paying back a loan taken out to get the place. NET PROFIT means What is left when EVERYTHING has been paid.

If your still interested take a publican with you when you view but visit a few times on different days and at different times, as a punter, before you make any official interrest.

Spend a few weeks working as a bar person BEFORE you take the plunge. It's too late if you don't like it when you've paid out all your dosh.
Remember, any job that needs doing, including sticking your hand down the bog to unblock it, YOU have to do, better than any of your staff.

As a family we know a few publicans, and a mate of mine has 3 pubs, I would say I wouldn't bother..

It is very much a lifestyle choice, but the lifestyle is work work work. I largely agree with most of the comments above and think that they have the facts spot on.

Don't underestimate the 24/7 comments, it is really 24/7 as said above, you have to take the deliveries, bottle up, clean the lines, do the cleaning, do the decorating, do the food, do the serving, do the glass collecting, do the gardens, do the boards, do the shopping, do the DIY.... the list is endless..

You can obviously get a gardener or you can get in a decorator, but these all come from your profits! And you'll have staff to do the glass collecting, bottling up, deliveries, stock, etc - but you'll find you do most it yourself as you want it done right!

Have you looked on beerintheevening.com to gauge reviews of the pub?

Hoban makes a very good point, try and get a bar job for a couple of weeks to see how it all works and that should give you a great insight to it all

Many thanks for all the excellent informed and not-so-informed comments.

Why does it seem so natural for me to choose a group of people - most of whom I've never met - whose only connection is that they have (or had) an interest in a slightly idiosyncratic car, to give me advice on a possible life change? No, don't answer that.

We went and had lunch last Friday at the pub. As with many roadside inns, it is a long, quite substantial building dating from 1865. Plenty of character and with ample parking. The interior has a large central bar, a smaller cosy back bar (all open, no doors) and a restaurant that has about 20 tables, so probably 80 covers at a squeeze. Either end of the building has double doors out to a medium sized garden and the far end of the restaurant could be partitioned off for small private functions.

It has a very traditional hunting/horse & hounds theme and I would guess it was redecorated after the smoking ban came into force. It is frankly pretty tired and cluttered with horse brasses, paperback books, plus various prints and plates on the walls. Oh, and a few motheaten examples of the taxidermist's art.
The accommodation above apparently includes 4 beds, a lounge, an office, a kitchen and a family bathroom. More on that in a bit.

The landlords' story is slightly unusual in that it used to be run by a couple, but around a decade ago, the husband took up with the bar manager and the wife (unsurprisingly) found herself Not Wanted On Voyage. She doesn't appear to bear any ill will and I think may still have a financial interest. This odd arrangement hasn't perturbed the gratifyingly open-minded locals and the pub has - until recently - prospered. Now, the health of one of the chaps has deteriorated alarmingly. They must be in their mid fifties, but he can barely carry 2 plates from kitchen to table, in contrast to his partner, who seems in fine form, but clearly both of them want to get out of running the place as soon as an appropriate offer comes along.
The buildings are owned outright by the current landlord and the pub is a freehouse. They are looking to sell a 15-year lease for around £50k plus £30k rent per annum.
The last books available (2009) show the place turned over around £3,500 per week 50:50 wet sales and food. The menu seems a decent mix of trad pub food and rather more exotic fare, with a choice of 3 veggie main courses along with the meaty stuff. It was generous and pretty tasty, but took a fairly long time to come either because or despite the fact we were the only people there on a 30th December lunchtime...
Anyway, we chatted to the owners and it transpires that they are responsible for the repair and maintenance of the buildings and are waiting for someone to move in so that they can refurbish the accommodation to suit their new managers' needs. The pub itself will need considerable investment if it is to be turned back into something worth having a crack at, especially if the current landlords' wish to move substantially upmarket is to be realised. They have blatantly stopped putting in more than the bare minimum and I'd be astonished if the current takings are anywhere near what the latest figures show.

After we left, MrsC and I compared notes and although we feel that it could very feasibly be transformed back into a thriving business, we would want a lot of guarantees about work being done before we'd be ready to take it on.

One for the back burner.

Jim

As I said my dad was a manager, so employed by the brewery. The one thing I can say is that with the exception of one pub which had just had a total refurb, the state of the manager's accommodation was ALWAYS worse than the pub.

If the pub is on the decline, it is even more of a gamble, you need to do something to bring in new trade, at the same time not chasing the current trade off (unless the current trade may put off new customers. The Slaughtered Lamb springs to mind...).

Perhaps it might be worth seeing how this year pans out? Good luck whatever you decide to do.

If you are serious do a business plan and try to get someone with good knowledge of the pub trade to review it.

Then decide what the possible returns are and consider what else you could do with the 50k you will have to pay. Also if no one else buys the lease will you be stuck with a 15 year lease costing 30k each year ?

On a yearly turnover of 182k you need to find 30k for the rent for starters before you have done anything, so on the current turnover you need a return of at least 17% just to cover the rent.

Then you will have heating/light/water, business rates, equipment costs, staff expenses, your own expenses, accountants fees, bank charges etc etc.

Sounds like a lot of hardwork when you could buy a rental property with the 50k and have an income from the interest.

Good luck anyway.

Speaking as an accountant, the figures don't look great.

Typically a pub will see between 40% and 70% gross profit margin. Working on £3,500 per week and a gross profit margin of 60%, you would see a gross profit of £108,000. You will then need to account for the following:

Wages- how many people will you need to employ at basic wage and for how many hours? Are you cooking yourself? It could be a LOT LOT more, but if we said 50 hours per week help, that would be around £15K
Rates- no idea, depends on many factors, but say £5K
Rent- £30K
Insurance- £3K
Light & Heat-£10K
Phone- £1K
Post/Stat etc- £1K
Repairs- £3K
Licenses- £2K
Prof fees- £2K
Bank/C/c charges- £2K
Depreciation of assets- £5K
Other costs- £1K

So as a quick back of a fag packet calculation, that leaves £33K for you two. It could/probably will be quite a bit less. Wages, rent, light and heat, repairs, depreciation of assets could all be a lot higher.

Why do they only have 2009 figures available? There should be at least be 2010 figures available and nothing should be done until management accounts to the end of 2011 are prepared. From the picture you've painted, I doubt they're still seeing £3,500 per week.

There is no way the owners of the freehold will get £50K plus £30K per annum. Pub owners/pub freehold owners are on their knees at the moment. I have a client who runs a small independent brewery and has been looking at buying a few pubs recently...

Part of your post is confusing? Are they offering a lease to run the pub for £50K +£30K pa or just the building? Then the purchase of the business is extra?

I think I should stress - what we saw made us decide that unless something changes significantly, we wouldn't take this place on!

Jonny, thanks for your brief calculations - very useful and much as we'd thought ourselves. I'm sure the more recent data would be available were we to take our interest further. As I said, I'd be astonished if the place was taking anything close to £3.5k p/w at the moment.

Apologies for the confusuion: The current owners/landlords want £49k for the lease to run the pub and live on the premises for 15 years plus £30k rent per year. Is that clearer?

I thought it would be useful as it's something a lot of people are thinking about at the moment. If you've never done it before, you either need to be lucky or just be suited to the job...

That makes more sense. It would depend on how long you do it for, but you would be tied in to some degree and the risk would be that the goodwill you build up over the years could be taken away from you. The deal doesn't make sense for the vendor in tax terms, it could be structured much better. But that's their problem

Thanks again. My impression is that a) the current owners are desperate to get out - the price of the lease has halved in the last 3 months (during which time nobody has rushed to snap the place up...) and b) I think they are pretty naive businesswise.
Mrs C and I would look at it again, but only if a number of conditions were met!