The pub industry has become a “graveyard”. We recently helped a couple that, despite every persuasion we tried, had gone ahead and signed up for a pub. The building was in very poor condition. The facilities were either very poor or unusable. The brewery did not deliver on its promises and commitments. They also found that the more beer they sold, the more money they lost because of the high price per barrel being charged by the brewery. They could not get out of the lease.
It is possible for pubs to succeed but the conditions need to be right:
- Location, location – being located in the right place is crucial
- Condition of the building – newly refurbished buildings with good internal facilities are far more likely to succeed
- Suppliers pricing – Breweries that insist that you only buy their beer are in control of prices. You can usually buy beer much cheaper elsewhere but you may be “tied” to your brewery
- Food – Pubs that offer food attract more customers. Choose menus carefully. Ensure you meet food hygiene regulations
- Do it yourself – The more that you can work yourself, the less that you will pay in wages. Running a pub can be a family affair. Employing family can be cheaper and more flexible.
- Consider other income or customer generating activities. Can you host a car boot sale, local farmers market, local club or society meetings or events?