How to Buy a Pub

Buying a pub involves a great deal more than acquiring bricks and mortar. It’s about buying a business and a lifestyle – so it’s vital that you take time to consider a variety of factors before you take the final decision to buy a pub. In this page we take you through those factors as well as showing you, step by step, how to buy a pub.

Step 1 – Decide What You Want From Buying a Pub

Before considering how to buy a pub, it is useful to consider what you really want or expect. For many people, owning a pub is a long held dream. Some are attracted by the idea of running their own business. Others like the idea of being part of a village or holiday location. Some are attracted by the chance to run a business as a family and not have to commute to work. While others find the idea of being a host and socialising with customers appealing.

All of these are possible when you own a pub. But it’s important to understand that buying a pub is a business decision first and foremost. The lifestyle benefits come only if you get the business aspects right – which means getting a good match between the time and skills you have, with the time and skills demanded by the business. If you don’t get a good match it is all too easy to find yourself committed to a business which does not deliver what you wanted.

What hours do you want to work? Some pubs are virtually 24/7 while others are open just for a short lunchtime and then again in the evening. It’s useful to decide what level of personal time you expect to have and to choose a business that matches.

Do you want to manage staff? If you envisage doing most of the work yourself, you need to choose a business which is small enough for that to be a practical option. A larger business means more staff to organise, which could mean spending your time managing staff rather than doing hands on work in the bar.

Do you want to run a restaurant? Many pubs sell food alongside their wet sales, whether it is a just a range of snacks or a full restaurant menu. So owning a pub very often means running a restaurant at the same time. So decide if this is part of your vision for owning a pub and choose a business with a level of food provision to match.

Do you want to stay put or move on? Your choice of pub / business will vary depending on whether you see yourself moving on to somewhere else in a few years (perhaps having made a profit) or whether you want somewhere you can put down roots for 20 or 30 years. It will also affect how you choose between tenancy, leasehold or freehold (more below).

What accommodation do you need? Many publicans live on the premises, which makes balancing work and personal time much easier, as well as keeping down living expenses. Work out how much space you need for yourself and any family and make sure the pub you buy has the space you need. You don’t want to have to give up a successful business just because the living space becomes unsuitable.

Town or country? For many, the idea of buying a pub goes along with moving out of the city and living somewhere more rural or scenic – but there are many pubs, hotels and restaurants in town and city centres too. You need to decide whether you want a busy town centre business or whether you want somewhere quieter. Your choice may have implications for your business’s performance. A town centre pub is likely to have steady, year round business, while a seaside pub may have a visitor pattern which is more seasonal.

Getting clear on all these factors will allow you to narrow down your search to the businesses which are a good match for you.

Step 2 – Identify What Training You Need

It helps greatly if you have some previous experience of working in a pub, so that you are familiar with the basics. These days, it is not sufficient to throw yourself in at the deep and and hope you can learn as you go along. Since 2005, new licensees are required to hold the new BIIAB National Certificate for Personal Licence Holders. You can find out more about suitable training at the British Institute of Innkeeping. Alternatively, you can contact us here at UK Pub Sales and we will send you details of relevant courses.

Undergoing training will not only give you the necessary skills to make a go of your new business, it will give you a full picture of what’s really involved and help you decide whether being a pub landlord is right for you.

Step 3 – Choose between Tenancy, Leasehold or Freehold

There are 3 main ways of becoming a publican, and these involve different levels of “ownership”. Which you choose may depend on your existing level of experience, as well as the amount of cash you have to invest.

The first option is tenancy. Under a tenancy agreement you manage the pub for between 3-5 years, on behalf of the owner which will typically be a brewer or other company. There are two main downsides of a tenancy. The first is that you will often be “tied” to a particular range of products that you can sell, which some find limiting. The second is that if you are successful at building up the pub’s business it still belongs to the owner and you cannot sell the business for a profit. The major upside is that you will often be provided with training. This can be a way to get experience of the business before you make a bigger investment in leasing or buying your own premises.

The second option is leasehold. On a leasehold model, you buy the lease but the premises are still owned by a third party. This means that you are able to benefit from the profits and value you create from the business. A lease is usually established for a fixed amount of time, perhaps 15 or 30 years. You are able to resell the lease after an amount of time (usually 2 years). The cost of a lease will be based on the current value of the business, plus an annual rent. This offers the chance to build up the business and sell it on for a profit. On the downside, you may still be tied to particular products (although usually less limited than with a tenancy), and you may also be responsible for the upkeep and repair of the building. A leasehold often includes support from a larger company in terms of training or back office guidance, which can be useful if you are relatively new to the business.

The third option is freehold. On a freehold model you own the buildings outright and are fully responsible for every aspect of the business. On the downside this means you need to pay for any training yourself, as well as buildings maintenance, insurance, and so on. The major advantage is that you are free to sell whatever products you like, to diversify your offering as you please, and to directly profit from whatever improvements you make to the business. A freehold option is most suited to people who already have existing experience of day to day operations, financial management skills and significant cash to invest in a purchase.

Step 4 – Establish Your Financial Options

Your choice of pub will be greatly affected by the amount of cash you have to invest.

As well as doing your own sums, it’s a good idea to get specialist advice.

UK Pub Sales are well placed to provide this type of advice and to put you in touch with specialist lenders.

Step 5 – Search for Your Pub

If you have followed steps 1-4 you will be very clear on what type of business you want to buy and what your budget is. You are now in a position to start looking for particular properties to match your requirements.

A great place to start is by registering with UK Pub Sales. We have 24 years experience of buying and selling pubs, hotels and restaurants throughout the UK and always have a good selection of leasehold and freehold pubs for sale on our books – just register with us today to start receiving details of pubs for sale in your required area.

As part of our selling service we provide sellers with information about prospective buyers to help ensure a good match. But this also benefits our buyers too. We will talk to you about what you are looking for, your level of experience and financial position and help point you towards properties which are most likely to meet your needs.

Buy a Pub – for more information on How to Buy a Pub please contact us.