No shortage of opportunities in leasehold sector, pubcos say
TAKING on a pub or bar can be an expensive business.
From acquiring and refurbishing the site to covering the cost of stock, staff and other start-up staples, the capital required is prohibitive for many.
There are, however, other options open to those keen to be their own boss.
According to some of the major pub companies, there’s no shortage of opportunities in the Scottish market for both new and existing lessees looking to get a foot on the licensed trade ladder.
Coupled with what firms say are increased levels of lessee support, pubcos reckon now is an ideal time for operators to take on that first lease or expand their existing operation.
Andy Hodgson, operations director at Admiral Taverns, which has 17 pubs in Scotland, said the pub company has seen an increase in newcomers to the licensed trade looking at the tied model as “a fantastic way to run their own pub business, with a supportive partner”.
The resources made available to lessees through pub companies were highlighted by Hodgson as a key benefit of the tied model.
Too many licensees fail because they are not given support.
“Running a pub through the supported tied model is a fantastic occupation that offers entrepreneurially-minded individuals a low-cost opportunity to run a hospitality business at the heart of their local community,” said Hodgson.
“Teaming up with the right pub company partner should give them access to valuable guidance, support and training as well as carefully planned capex support.”
Support for new lessees has been a particular focus for Admiral Taverns, Hodgson said, with the company looking to give them the tools to make their venue a success whether they have had industry experience or not.
“It is well known in the industry that too many licensees fail in the first six months, not because the pub is unworkable or the licensee does not have the capability, vision or commitment, but because new licensees are not given the level of support and training in the crucial early months to set them on the path to long-term success,” said Hodgson.
Lawson Mountstevens, managing director of Heineken-owned Star Pubs & Bars, agreed that the support provided to lessees is advantageous for new and experienced operators alike.
However, he said lessees must have a “passion for pubs”.
“That’s something you can’t train and it’s the first thing we look for,” said Mountstevens.
“Running a pub is a lifestyle as well as a business choice. To be successful you have to have a passion for pubs and love the environment.
“A love for pubs isn’t enough; it’s the combination of wanting to ‘make money while having a business I love’ that we seek.”
Beyond that, he said applicants must demonstrate they are “business minded” and, ahead of the interview, should have researched the competition, have the outlines of a business plan, know what they’d do with the pub and have thought through the staff numbers required and how they’d train and motivate them.
“Competition and customer expectations are high; great service and standards aren’t ‘nice to haves’ they are retailing skills which are essential to a thriving pub,” added Mountstevens.
“The site and style of a pub should be more important to an applicant than the fact it’s their local or they have family nearby. They need to show they’ve done their homework, visited the pub at different times of day and week and have the skills needed to maximise its potential.”
Garry Fenton, operations director at Iona Pub Partnership, the leased division of G1 Group which has 107 pubs in its estate, echoed the importance of planning, saying that having a “vision” for the business is vital.
“We believe in trying to attract only the best operators in the country, who, in collaboration with our business, have a vision for a business and want to run it in their own way,” said Fenton.
“With this in mind we can take a flexible approach with our agreements to ensure the needs of our leaseholders are met.”
Fenton said the key things for a prospective lessee to possess are “vision and passion to succeed”.
“We do look for business acumen and prefer sector experience, however, this isn’t essential,” he said.
“In our experience, someone with a strong work ethic, a great idea and passion to deliver is important.
“A good level of commercial awareness is also helpful.”