Talking Points for First-time Pub Buyers

6 March 2017
 Categories: , Blog


Once in a while, people like to take time off their busy and scheduled life to have a good time and let go. Weekends and holidays often make up the best days considering that most people have those days off. On such days, pubs present the best opportunities to cash in from selling alcohol, food and other services like accommodation.

Buying a pub for the first time is not a walk in the park considering the sort of challenges that pub businesses present. Thankfully, the following talking points will give you the insight you require when buying a pub for the first time:

Wet versus Dry Split

One of the best ways of attracting many customers is by offering both alcohol and food services. Your customers will feel at home if they know that they don't have to go elsewhere to get food. Here, you must consider the wet versus dry split in the pub with respect to the sales revenues generated. "Wet" covers drink sales while "dry" refers to food sales. A careful look at the ratio of drink and food sales will help you with staffing the facility. If the pub makes most of the revenue through wet sales, you will not need many people in the food department.

You should also note that a wet pub attracts lots of alcohol oriented taxes and duties. Therefore, it is imperative to find a pub with a good balance between foods and drink sales. You can always recover the money lost in alcohol related taxes.

Form of Ownership

The form of ownership is another important consideration. A leasehold agreement is a form of ownership where you have to pay ground rent for the benefits you derive from the land. You have a landlord who reserves the right to issue some limitations on the changes and developments that you can do on the land. On the other hand, a freehold ownership agreement means that you have exclusive rights to do whatever you please with the property. For a pub, going for a freehold title is the best alternative. You have more freedom to do what you want and enhance the success of the business, even if it means putting up new structures.

Trading Account

Make sure that you evaluate the trading accounts of the pub to see how it has been fairing over time. An interim balance sheet and profit and loss statement covering six months or more should be enough for you to make reasonable forecasts.