Are you ready to buy or sell your pub?
Planning a successful exit or entrance into the market involves a lot of preparation. Pub owners looking to buy or sell a property will want to maximise their return on investment. It helps to prepare and get yourself truly ready for what can be a long and arduous transition period.
How to be shrewd
It seems obvious to say that you should buy or sell a pub in the best condition possible. The sale price and the speed of the sale are just as crucial to a successful transaction. Those who are selling a pub should look to maximise the saleability of it and sell it at its peak. They can do so by optimising the positioning of their business and creating an enticing property package. Those buying a pub will want to know exactly what they’re walking into and what they’re working with. For them it’s all about ensuring that they’re in a position to start trading profitably as soon as possible.
Buying or selling a pub can be an overwhelming experience and a confusing and daunting time for any business owner. It is a bad idea to leave everything to the last minute. Rather than making a distress sale or purchase it is wise to give yourself plenty of time to get things straight and get the most profitable outcome for your business.
To ensure a trustworthy, amicable and profitable exchange, the sharing of key business information will make a huge difference for everyone involved. Bear in mind that gathering the right data and documentation about a business goes beyond a pub’s four walls. Knowledge about the patrons, local community and everything in between can all be beneficial. For this reason, the more you know about your own business, or the one you’re buying, the smoother and more painless the process will be. Plus, sharing information is in the true spirit of the pub industry, which is all about supporting each other.
To ensure you don’t go into the process blind, we delve into some top tips on how to best prepare.
Ready, set, go
1. Make your business attractive both cosmetically and commercially.
Put yourself at an extra advantage by seeking advice from a knowledgeable property maintenance expert and a business profit consultant to make your business showroom ready. Getting menu costings, GPs and other trading figures into a sensible position and in line with expected benchmarks for your type of business is essential.
2. Investing in excellence training for your staff when buying or selling a pub is a great way to ensure a smooth transfer of ownership.
Stock, compliance and operational excellence training workshops are a sure way to see a return on investment through the improvements that are guaranteed to follow. Especially important for TUPE agreements, trained and qualified staff will generate a higher level of confidence for all those involved in the transition period.
3. Get your business into a robust state that is on steady footing.
Whether buying or selling, you want to establish strong business foundations. Policies and procedures help to implement or solidify effective standards and controls. Monitoring compliance across finances, operations and brand will help you stay on top of stock, revenue and profit. That way you either pass on or inherit a business that is operationally and statutorily compliant.
4. Once you know your business is in its optimum state, find out how much your pub is worth inside out.
Beyond a general property valuation, don’t forget to get a clear picture of all the extras that could influence your property’s value. It is much better to have regular stocktaking pre- and post-sale than to wait or rely on a stock valuation at point of sale. A full costed inventory of your stock should be part of the normal stocktaking reports and recognised by accounting standards.
5. The data and documentation you receive or hand over needs to be watertight.
Not only that, it needs to cover all aspects of the business and should include: legal, accounting, HR, operational, compliance, marketing and infrastructure records. In other words, the pub accounts need to be in order. A lack of documented trading information can significantly delay or impact a sale and can have long term ramifications for a buyer.
6. It’s important to get the right people to help you and to recognise what bits you can do yourself and where you need to outsource.
Find yourself an experienced operational consultant, a qualified stocktaker and an independent valuer to get the trading information you need about running the business successfully. Then reach out to a sector specific property estate agent, practiced solicitor, trustworthy financial advisor and licensed accountant.
Excellence achieves profit
When looking to expose your pub to the market or make the decision to buy one, an average preparation or follow up period of about 12 months should be expected. It is vital to understand the strengths and weaknesses of every operating area in the business by investing in reports, basic tools and coaching to make improvements.
Buying and selling support packages, such as Fit for Sale and Takeover Kickstarter help you set up operational goals, controls and standards to maximise the profitability of your pub. Through specialist discovery visits, control reviews, operations analysis and cost assessments, Venners consultants can help facilitate a smooth and stress-free transition period.
Wherever you are in your pub journey, ensuring your pub is in tip top condition is the straight road to enhancing profits. Venners offer extensive support throughout a pub’s lifecycle. Rely on us to drive operational excellence and profits at every stage of your pub’s journey.