Could I lose money if I take on a pub tenancy?
Starting a new business can be a real leap of faith. If you are currently in full-time employment, then venturing out on your own is a big step.
The risk of failure and potential loss of money is a very real concern and if you are entering into the pub business, you must choose a pub company to partner with that you feel will support you and your venture going forward.
You can do an awful lot yourself to ensure your pub tenancy is a success. The more preparation that you do before taking on a pub, the more training that you undertake and your willingness to work co-operatively with associated business will make your chances of success far greater.
Starting with…
Writing a business plan
With careful planning, preparation and the creation of a robust business plan, you will be starting off on a fantastic foot.
In fact, a thorough, detailed business plan is an essential prerequisite for any pub operator who would like to work with Greene King. We want our operators to succeed and run a profitable business, and we know that a sustainable business plan is key for this.
Don’t worry if you’ve never written a business plan before; our Business Development Managers (BDMs) are on hand to help you and we have plenty of resources available such a downloadable business plan template, profit margin calculators; as well as all the financial information you need for a specific pub.
The business plan template covers everything you need to consider before starting the business from finance to marketing, location to products. Our online profit margin calculators ensure you know the correct profit margins for each product. You don’t even have to do any calculations, since as soon as the prices are inserted, the system will provide the answers.
Taking on training
Another important factor in a pub tenant’s success is having the right skills to run a pub. Even if you’ve run a pub before, it can be invaluable to sign up for training to ensure you have up-to-date skills for running a pub in today’s competitive market.
Many pub companies run training courses for new licensees, and in many cases – certainly with Greene King – some of this training is compulsory. This is a great opportunity to get a really good foundation in running a business, reducing the risk of failure as you start your new venture.
Within Greene King, we offer an interactive residential programme that will showcase all of the tools available to you to support your journey now that you’re a partner.
There is an abundance of information available to ensure that your pub is as successful as it can be. This includes; financial training (covering Gross Profit, yields, accounts, tax information etc), access to the latest data insight and trends (so you can plan accordingly), meet the experts (people you can call upon throughout the process).
The residential programme also offers the chance for you to meet and network with those who are on the same path as you, meaning you can make contacts, swap stories and ideas, and form relationships to help you along the way.
But it doesn't stop there...
Unlike other pub companies, at Greene King we’re very much about creating a lasting partnership with you – and we would never hand you your keys and set you on your way alone.
All licensees are assigned their own BDM, a highly experienced individual who has often run their own pub in the past. They are there to support licensees and help them run a profitable pub business.
We also operate a First 100 Days programme, designed to walk you through your first 100 days of trading. You will receive constant support – from emails checking in, to visits from the Learning & Development team, the property team, up to four visits from your own BDM and ensure you are guided at every step during the inaugural phase.
Another very valuable aid is the presence of online support 24/7. Operating pubs means that problems can occur outside normal office hours – the presence of continuous online support means that help is always there when needed and at Greene King, we offer this via our PP.net solution.
You get out what you put in!
Ultimately, the pub company you’re with can offer endless amounts of support but at the end of the day, the amount of effort you put into the business is going to be what makes your pub a success.
People can lose their investment if they don’t run their pubs professionally as a business. Viewing the pub as a hobby, giving away too many free drinks to friends, providing poor customer service, or not giving your staff training and support, are factors that can lead to failure.
On the other hand, people who really make the effort to promote their pub, train staff, maintain high standards and offer great customer service while carefully paying attention to profit margins will create a highly successful business.
Always remember that any expenditure should never be greater than your income and your business model must be capable of making a profit at every point. Seeking the help of your BDM and listening to their advice will certainly benefit your business.
There is so much that a proactive licensee can do to bring in new customers and retain existing ones. From the type of events or amenities you offer, to the way you promote them, and the pub experience your customers receive. Successful licensees need to always be on the lookout for new ways to get people through the door, keep them coming back and improve on their experience every time.
Overall, taking on a pub tenancy can be a risk, as is starting any business, and some people do lose out. However, those that approach running a pub in a professional, business-like fashion put themselves in an advantageous position to make their pub a great success.