Our precious pubs may have saved the economy. Despite everything thrown at it, the economy continued to grow in November. GDP rose by 0.1%, eked out by pubs and restaurants that benefited from the World Cup.
It’s a nice reminder of what we hold dear. We still have many hills to climb. But that doesn’t mean we can’t enjoy ourselves along the way. What helps us get through these tough times is quality time spent with friends and family. If this can be tied in with a shared national effort in some way, that’s even better.
I’m sure many of us have a soft spot for our local pubs. Even if we don’t partake all that often. They can contribute to our identity and culture, and this recent news may even inspire a new generation of budding pub landlords. If you’re contemplating a pub refurbishment, or moving into the hospitality industry for the first time, this blog may help you brush up on some of the basics.
What’s needed for modern pubs?
There will likely always be eager customers for pubs. But, modern patrons will likely look very different to those who came before. You’ve likely heard many refer to an establishment, rather disparagingly, as an “old man pub”. Consumers may still want to find a spot for a drink or two, so long as it ticks certain boxes.
In recent years, we’ve seen rising success from gastro or themed pubs. While they may not be to everyone’s tastes, they tend to stick around. What’s important is understanding what your consumer base wants to see in a pub. Sticking with what’s “classic” may no longer be enough.
Any pub investment strategy will likely involve some refurbishment plans. But, before you even get started, you’ll want to ask yourself a few crucial questions. According to startups.co.uk, from the outset, you’ll need to decide whether you want to run a lease or freehold.
Understand your rights
Most pubs in the UK are owned by a pub company through leasehold. Here, you’d be running the business but not the property. This would make pub refurbishment plans tricky. If you want complete ownership, and to be able to make decisions on the design and strategy of the pub, you’ll want to be a free-trader.
Sitting down and drawing out a business plan will help you visualise what to prioritise. Also, there are various consulting services out there for support. You could seek the expertise of designers, architects, and construction workers to bring your vision to life.
And don’t forget about accountants. Generally, leasehold costs start from around £30,000, while freehouse bills start from roughly £120,000. You will also need to get up to speed on the rules and regulations that affect the pub industry.
Chiefly, this concerns the 2003 Licensing Act. As a rule, pubs must meet four licensing objectives: prevention of crime and disorder, protection of children, public safety, and the reduction of public nuisance.
Overall, you’ll likely need enthusiasm for the trade. Are you sociable, as opposed to introverted? Do you enjoy swapping stories late into the night?
Although, if you plan to have someone else manage your pub, it doesn’t matter!
And beyond industry specifics, ask yourself if you’re entrepreneurial enough to keep up with a challenging market? Will you have enough funds to cover your overheads until you bring in some regulars? How will you market your pub, or recruit motivated staff?
These questions need to be answered. A pub refurbishment should ultimately be driven by your target market. Not your personal tastes. But fortunately, when it comes to customers, it may be possible to somewhat anticipate preferences.
The current landscape
An easy route into the pub trade may involve the refurbishment of existing spaces. The hospitality industry has faced difficulty in recent years. There were 46,800 pubs operating in the UK in 2020. Down from 55,400 in 2010.
And of course, the pandemic and ongoing cost-of-living crisis had an impact. More than 32 pubs in England and Wales closed each month in 2022, according to analysis of official government data.
There could be a lot of pubs out there laying empty. Just going to waste. It’s a sad thought, but these spaces could be given a new lease of life. A few tweaks could not only generate a viable business for you, but also bring a renewed sense of community to the area.
But, a quick lick of paint is unlikely to cut it. With nearly a third of Brits cancelling pub visits due to rising costs, you’ll need to provide a worthwhile incentive to get people out of their homes.
Knowing your customers will help direct your pub refurbishment
So, what will tempt consumers? It turns out, there is plenty of demand for live music in pubs. Perhaps you could install a stage and create extra space for musical equipment?
Also, food is playing an increasingly important role in the hospitality industry. Maybe you’ll want to prioritise installing a state-of-the art kitchen.
There are numerous variables at play. You’re unlikely to know everything your customers will want to see. But you can at least narrow down the choices. Doing some research ahead of time could pay dividends.
Is your pub near a university with students who want to see modern art and a new band every week? Or are you operating in a sleepy retirement town where locals just want to sit next to a fireplace and enjoy a Sunday roast?
If you get to know your target market, and what’s important to them, you’ll have some direction for your pub refurbishment.
How can specialist finance help?
Fortunately, once you know how your pub refurbishment will look, we could help get the wheels in motion. Our permitted and light development bridging loans can support a range of plans. From basic cosmetic changes, through to major conversion projects requiring planning permission.
Also, our development exit loans can support you if you’re in the final stages of a project, but need more time to organise long-term finance.
Our funding options can help you in a pinch. If your pub’s roof needs more work than expected, or the contractors you hired go out of business, we can provide you with capital in as little as 3 days.
We’re flexible. If your business plan makes sense, and your exit strategy is sound, we’ll try to find a bridging loan suitable for you. Cheers!