They say moving house is one of the most stressful events in ones life, for those of you taking on a pub (whether it’s the first time or not) combining this stress with that generated by taking on a new business can seem just too much. Hopefully with comprehensive planning, the advice in this article and the accompanying checklist the actual day you take on a pub can be a little bit less stressful. After all taking on a new business shouldn’t be wholly terrifying, it should be as enjoyable an experience as possible, as should running your pub business.
Having a plan for the weeks and days leading up to taking over a pub and the actual handover day is essential as one only needs to forget one small thing for problems to start. In the whirlwind of takeover day one small problem can often spiral out of control leading to further problems and suddenly instead of realising ones dream of being a publican, one is enmeshed in a waking nightmare.
The handover checklist, which goes with this guide, is broken down into key tasks which must be completed, along with details of “sub-tasks” within certain categories; a target date to complete them, a reminder of who is responsible for completing the task at hand; a reference to key areas of the business which these tasks impact on and a completion date for each task.
(Those of you who may be leaving a pub business might also find this article and the checklist useful too.)
Contract to buy Business, Signed and completion date/time – taking over any business is a series of legally binding contracts and agreements so the first one to get under your belt is the contract to buy or rent the premises along with the requisite signatures from both parties and a mutually agreed date and time when the business contract is completed and, in effect, you take on the business and the premises.
Top Tip – these transactions can be complex and involve at least two lawyers (one for you and one for the vendor) and at least two banks (yours and the vendors) – and as the saying goes “there’s many a slip twixt cup and lip” so be prepared for delays in the confirmation between lawyers and banks for transferring funds. If you can arrange it, make the completion date towards the end of a calendar month, to take maximum cash flow advantage with bodies such as HMRC and suppliers to the business. Make the time of day realistic, especially according to the seasons; for instance 10 am in the summer will still give you a good twelve hours of daylight to see the vendors’ effects removed and yours installed. 10 am in the winter will give you barely six hours to do the same.
Finance for Completion – if your funds to purchase or rent the premises aren’t lodged with your solicitor, you won’t be able to move in, Make sure you not only have these funds available but also a contingency fund for any last minute hiccups.
Close business for part or whole of day for takeover – not only are you and the vendor often moving home, which will take up much of your time, but there are a truly vast number of tasks to be accomplished on the day. Trying to fit all this into one day and open for trade at the same time is sometimes simply not possible. Resist the urge to trade at all costs, make an early decision to either close for the complete day or delay opening to your customers until, say, the evening. Better to lose some turnover than open half-cocked and in utter confusion.
Stocktaker appointed – one of the most important professional advisors a pub business has is its stocktaker, so make sure you’ve appointed one in good time before you take over the business. The Independent Licensed Stock Takers Association (ILSTA) will be able to help you find one local to your pub. On handover day you can choose to either have your own stock taker and the vendor’s stocktaker take stock of all the food and drink etc in the pub (both you and the vendor have to pay fees) and agree between them the value of the stock and glassware or you can agree to jointly appoint a licensed stocktaker to take stock and present both you and the vendor with a mutually agreed valuation (you and the vendor split the fee between you).
Top Tip – the stock taker is there to quantify and value the stock, you must agree in advance with the vendor what you will or won’t buy from them i.e. opened bottles of wines or spirits, beer and food nearing the end of its shelf-life, “home-made” food in the freezer etc. Whilst you should “stick to your guns” don’t let a minor disagreement over the stock jeopardise the smooth take over of the pub, be prepared to compromise a little, especially if the outgoing tenant or owner is in “distressed” circumstances. (It won’t take long for it to get back to regular customers if you’ve taken advantage of a “distressed” handover and could do your reputation irreparable harm.)