Pubs & Clubs
Ep 32: Secrets on AnnWe chat with John Kurzok about launching Secrets on Ann, a popular nightclub in Brisbane’s Fortitude Valley.
Ep 26: Eau di Vie Cocktail BarWe chat to multi-award winning bar owner Greg Sanderson about how he launched Eau de Vie.
Ep 24: Los Barbudos Cuban BarWe chat with Tom Ambroz from Los Barbudos, which recently won ‘Best New Bar 2014’ at Time Out's Melbourne Bar Awards.
Ep 23: Interview with Miss Pearls (Madame Brussels)We sat down with the spirited Miss Pearls to talk about how Madame Brussels has become one of the most talked about bars in Melbourne.
5 Tips When Buying a PubThinking about buying your own Pub? Here are 5 tips to help the whole process run smoothly.
Thinking about buying your own Pub? Here are 5 tips to help the whole process run smoothly.
1) Get a mentor
Finding a mentor who has successfully started their own pub and is willing to offer you ongoing advice is one of the simplest ways to prove to a lender that you are focused on the success of your business. This helps when filing an application for finance. Loans aside though, a mentor is a great resource to field all of your questions. They also provide you with an opportunity to learn from their mistakes as well as your own. If you don't have someone happy to let you shadow them (and open enough to let you call them in the middle of the night) it may prove worthwhile joining an organisation like AHA so that you can build up relationships with other pub owners and managers.
2) Prove your experience
Whilst having a mentor helps when purchasing your first pub, it is also important that you have at least a little of your own experience to begin with. The first reason why this is important is that lenders are often unwilling to provide a loan to someone who doesn't have experience in or around pubs. Generally a lender likes to see that the borrower has at least 3 years experience. Secondly, pubs, like most hospitality venues, either flourish or fail and history proves that the chance of success is often directly linked with experience. As a pub owner you are going to have to roll up your sleeves at some point or another and, if you don't know how to take care of the little things, there is a good chance you are going to get in the way of your own success. The easiest way to prove this experience is through a detailed resume that highlights your work history and completed courses/certificates, and a business plan that illustrates your ability to determine cash flow forecasts and place in the market.
3) Submit your loan application right the first time
In order to qualify for finance, you will need to prove to the prospective lender that you have sufficient equity and income to service the proposed pub loan.
Whilst this is the chief requirement, there are a number of other things that can help get your lender onside. These include:
Business Plan – outlining cash flow forecasts, market competition and your business model
Resume - highlighting your experience working in and around pubs and listing 2 or 3 quality references
Credit History - proven history and detailed explanations of how you resolved any credit history issues
Bank Statements - yours and any other person who is to be involved in the purchase of the pub
Pay Slips - yours and any other person who is to be involved in the purchase of the pub
It is worth noting that it is important to submit your tender right the first time as lenders will often be quick to reject resubmissions. A specialist mortgage broker can help ensure that you present the most ideal submission to the lender the first time round.
4) Don't rush
When you're looking to buy a good pub, the last thing you want to be in is a rush. It can often take months to find the right venue for the right price and due diligence (the detailed examination of potential purchase) often takes several weeks. Rushing due diligence is extremely risky as without a proper examination of the purchase you can easily be hit with expensive surprises further down the road. For all you know, the pub you are looking to purchase might not have a license to serve more than 100 people even though you could easily fit 300 in the space. Licenses are just the tip of the iceberg. You will also need to find out who the venue's current suppliers are, the business' financial history, details on all current contracts, employee records, assets, liabilities, lease agreements, equipment lists, council obligations... etc. In addition to due diligence, you will need to schedule time for organising your submission for finance and finding the right lender. If the lender gives the all clear it is also worth noting that it will only be 'subject to valuation', which can also take a number of days/weeks.
5) Get financial & legal advice
You don’t want to hear it, I know. Unfortunately, however, it is absolutely crucial. You don’t want to hear it because it sounds expensive but the reality is most initial consultations are free and the information an accountant, financial advisor and lawyer provide can often save you a lot of money down the track. An accountant can help you find tax breaks and set up your entity structure so that it is the most profitable for your situation. A lawyer can protect you from binding agreements and legal clauses often tied to purchases. All parties can help you make sense of your obligations as a business owner.
For more tips, take a listen to our Podcast
And, grab a FREE copy of our consumer guide
Ep 7: Liquor LicensingLiquor licensing lawyer, Darren Marx, offers advice on when to apply, expected wait times, types of licenses, restrictions and much more.
Ep 5: Breaking into the Pub MarketHospitality Accountant, Tim Stillwell, provides advice on pub buying in terms of entity structuring, lease clauses, asset protection and more.
Ep 2: Buying a Pub - Sales Broker PerspectivePub Sales Broker, Pat Connolly, offers tips in terms of lease lengths, due diligence, rural vs city, leaseholds vs freehold and much more.
Pub GuideLooking to purchase a pub? Here are 10 things we suggest every pub buyer considers before signing a contract.
- Consumer Guides
Q&A: De Bortoli WinemakerWe sat down with Steve Webber from De Bortoli, Yarra Valley, to get some insight into a day in the life of a modern day winemaker.