Running a Pub
No-nonsense answers to your pub-business questions
Hand on heart, there is no such thing as a daft question when it comes to running a pub.
As we always say, if your business is successful then ours will be too. So we want to make sure you’re fully aware of what it means to run your own Batemans pub, and the challenges and opportunities it will bring.
Working with us
Q. What kind of pubs do you have and where are they?
A. We have a very varied estate, from small community pubs to high-street beer houses, and food-led places to pubs with accommodation. Our pubs are spread across seven counties: Lincolnshire, Norfolk, Cambridgeshire, Derbyshire, Leicestershire, Humberside and Yorkshire.
Q. Why should I take a pub with Batemans?
A. We’re known for our fairness and transparency, which has resulted in us being the first in the industry to have our own accredited code of practice. In fact, it’s been described as one of the best.
We stick by our word, we do what we say we’re going to do and we stand firmly by our promises to business owners. That is to help them enjoy successful careers – by sharing good, honest business values and by giving them the service, support and fresh ideas to help their pubs flourish.
Our business has always been about Good Honest Pubs Run By Good Honest People. Our grandfather Harry Bateman summed this up rather well in 1953, when he told his fellow brewers: “In your business, don’t ever lose the human touch with your staff and tenants.”
Q. Is there any chance of Batemans being taken over or selling out in the near future?
A. Not on our watch! Batemans has been a family business for four generations. A large chunk of the shares have been entrusted into the family, to help secure the business and its values for future generations, business owners and staff.
Q. What is a Profit Partnership Plus or PP+ agreement?
A. A Profit Partnership Plus (PP+) Agreement lays out the commitments of the business owner, and ours as the landlord. For more information, see our Tenancy Agreements.
Q. How long does the agreement last?
A. The agreement usually covers a period of three years, so business owners can renew their agreement every three years thereafter and remain at the pub indefinitely. While we can’t give notice to terminate the agreement unless there’s a breach, the business owner has the right to leave the pub at each three-year break.
Q. Is there a ‘cooling off’ period?
A. No. But if business owners want more flexibility and ‘thinking time’, we advise them to take a Five Months and 25 Day agreement rather than an initial three-year one. This agreement is not available in all instances.
Q. Do I need experience?
A. Some experience, whether in retail, business or pubs, is certainly helpful. But we have very good training facilities at Batemans, and a mentoring service, to help ensure those without experience can be successful.
Investing in a pub business
Q. How much will it cost me to take on a Batemans pub?
A. It works like this. You, as the business owner, purchase the business, the value of which is related to the potential profit from the pub. This amount is returned to you when you leave the pub, minus the cost of any inventory depreciation. You also need to buy the stock and glassware.
The typical cost of taking on a Batemans pub can vary from around £5,000 to £25,000. We call this your Profit Partnership Investment. This is significantly less than the amount most other breweries charge, as they often account for the cost of the inventory, i.e. the tables and chairs etc, which is often completely out of kilter with the potential profitability of the pub.
Q. Do I get my investment money back when I leave?
A. The next business owner to take on the pub will pay you for your stock and glassware, and we will return your Profit Partnership Investment, which you paid us initially, minus the value of any depreciation and lost items from the inventory.
Q. What business information will I receive about the pub?
A. We’ll give you the historical drinks volume data based on what the pub has purchased, the actual fruit machine income for the last three years and our estimate of income from food and accommodation.
All this information is put into a projected profit and loss account, which will give you an indication of what profit you could make. We also provide details about the facilities of the pub and its trading area.
Q. Do I need to take independent advice before signing a tenancy agreement?
A. Yes, we insist that each prospective business owner takes advice from an independent accountant or person of similar standing who can advise on the prospects of the business, the business plan and the potential profit.
Q. What sort of income can I expect to generate?
A. This depends entirely on the circumstances of each individual pub, and would be demonstrated in the business’s forecasted profit and loss. We would discuss these things as part of the application process.
To give you an idea, turnover can vary from about £130,000 a year to £500,000 a year, with the profit coming in at around 10% of turnover. Again, we encourage every prospective business owner to seek independent advice on these matters as every set of circumstances is different.
Q. Who takes the profit from the fruit machines?
A. The fruit-machine profit is shared between the business owner and the Brewery. The business owner’s income isn’t factored into the rent calculation.
Q. How do you set your rents?
A. We agree a forecasted profit for the pub, including depreciation, and set the rent at between 45% and 50% of this figure. The rent calculation follows industry guidance from the Royal Chartered Institute of Surveyors (RICS).
Q. How often do you have rent reviews?
A. We don’t have rent reviews; we abolished them! The rent we agree is only affected ongoing by annual inflation, in other words, retail price index (RPI) adjustments. This means that rents may increase or decrease each year based on the RPI.
Training and support
Q. What support is available in times of financial difficulties?
A. If, as a Batemans business owner, you come up against financial challenges, then we would carry out a full business review. This would involve members of the Profit Partnership team visiting and going through the whole business with you, before making recommendations.
If it’s considered that the business is already being run efficiently, we’d make concessions to alleviate the financial pressures. These may involve reducing the rent for a period, providing marketing support and even making payment of some of the business’s expenses.
Q. What training do you provide?
A. We provide our own two-day Running a Pub Successfully course, which is free to business owners and prospective business owners (with the only onsite expense being accommodation).
The course includes nine modules: Introduction to the Industry, Basic Accountancy, Cellar Management, Customer Service, Health & Safety, Licensing, Employment Law, Stocktaking, and Wine.
We also offer a free day’s cellar-management training. In addition, we run the BIIAB Level 2 National Certificate for Personal Licence Holders (APLH) course and a number of other BII courses.
Q. What training must I do before I enter the pub?
A. As a minimum, we ask that you attend our Running a Pub Successfully course, which covers the principal challenges of running a pub-business. You will also need to pass the industry pre-entry awareness training (PEAT), and your National Certificate for Personal Licence Holders (APLH).
Repairs, refurbishment and insurance
Q. Who is responsible for repairs?
A. We, the Brewery, are responsible for the structure of the building and the business owner is responsible for minor repairs and the inventory, such as tables, chairs, fixtures and fittings.
Q. Who is responsible for the decoration, internally and externally?
A. You, as the business owner, would be responsible for decorating the inside of the pub, with us approving the colour scheme.
You’d be expected to redecorate internally at least every three years. If the standard of decoration falls below the condition it was in when you entered the pub, you’d have to pay a charge on leaving to address this.
We’re responsible for decorating the outside of the building when we consider it’s needed.
Q. What if I want the pub to be refurbished?
A. We would discuss this with you. If we agree to refurbish the pub, it’s likely that we’d add 10 to 15% of the overall cost to your annual rent. We do, however, have an arrangement whereby you can invest the money and we will pay it back to you with interest if certain pre-agreed business targets are achieved.
Q. Who insures the pub and who insures the inventory?
A. The Brewery owns the bricks and mortar of the pub and takes on full responsibility for arranging its insurance, though the cost of the building insurance is recharged to the business owner. The insurance of the inventory, along with the maintenance, is the business owner’s responsibility.
Buying beer and stock
Q. Do I have to buy everything from Batemans Brewery?
A. We are a composite wholesaler and supply all our pubs with all drinks products on one delivery. This covers our own drinks as well as those from national, regional and local brand owners.
Q. Do you offer any drinks discounts?
A. Our business owners benefit from free-trade ‘cash and carry’ pricing. We believe it’s the cheapest pricing option there is for brewery tenants.
Q. Do you have a volume incentive scheme?
A. We can agree targets which, if met, result in extra discounts.
Q. Do you offer discounts for other goods and services?
A. Our Better Buying Guide enables business owners to buy many other goods and services from suppliers at special Batemans business-owner rates.
Q. Do you allow guest beers from other breweries?
A. On agreement with your Profit Partnership Manager, we can make available (at our discretion) guest beers each month, delivered by us, from quality breweries.
Q. Do you sell a smoothflow keg beer?
A. Yes, all pubs are able to stock John Smiths Smooth.
Q. What lagers do you sell?
A. The main lagers we sell are Fosters, Amstel and Kronenbourg, but Carling is also available.