Micropub financial planning

The importance of business viability and financial planning

Is now the right time to start a micropub? Or even buy an micropub that’s up for sale? A lot has been said over the years of the decline of the British pub, but last year was the first year since 2010 that more pubs opened than closed. This is fantastic news for the pub industry and we’d like to think the popularity of micropubs has something to do with this.

As with most business, your business plan is key if you are planning on entering the micropub trade. And any business plan needs solid financial planning to decide whether it’s going a viable business. This is where a good accountant can be worth their weight in gold.

We recently spoke to Bryan from Interbiz who has given us some background on this and offered a free chat to any of our readers that might be interested in owning a micropub.

How to make pints make £££s!

Hello. My name is Bryan. I’m an accountant and beer/pub lover! I own and run a specialist accountancy firm called Interbiz. It exists to help small, owner managed businesses. As you are reading this I’m guessing you fall into that category! Over the years I’ve helped lots of people in the food, drink and hospitality sector so I understand the industry well.

The rise of the micropub is one of the few good news stories in a sector that’s been attacked from all sides in recent years. A couple of years ago I started reading forum posts on micropub social media sites. It soon became clear that many potential operators were full of enthusiasm but struggling when it came to looking at business viability and financial planning. – And that’s where I can help!

Stress test your business viability!

I’ve developed a spreadsheet program to help budding owners look at the financial viability of their pub plan. Armed with as few as six numbers to input you can get a handle on likely profitability. – It’s a great way to “stress test” your ideas. It also encourages you to drill down on operating cost decisions as part of your overall plan. One former start up client was actually a new brewery. As this involved more than one family, structuring the ownership and management was important. We also scoured the landscape for grants and secured funding for the capital investment needed.

With viability and funding proven we can put together detailed budgets against which you can monitor business performance. One particular client had an established business with good products but it was underperforming. Here monitoring the sales of individual product lines and their profit margins against agreed budgets was the key to increasing profitability.  So we introduced a system producing regular management accounts to compare actual performance against budget. That business is now thriving.

Focus on what you’re good at – serving great beer

Business owners often struggle to make time to keep their financial records in order. For all of my clients I run a cloud based accounting program. That makes it simple for you to keep your books straight without spending hours doing so. And being cloud based means that your accountant can monitor and trouble shoot bookkeeping issues remotely. This sort of technology enables you to be on top of your finances from day to day with minimal effort. Clients need to know what’s due out of the bank account for suppliers and taxes. They don’t want nasty surprises and putting in a system like this makes it really easy to manage your cash position from day to day.

The software can also link with other apps to help you run your business more efficiently. Things like Point of Sale till systems, cardless payment devices and stock control are all available. We’ve introduced programs like Stripe, GoCardless and Vend and there are an increasing number of pub/restaurant specific apps that can help you run the business more effectively. Cloud accounting also links to your bank so that transactions are downloaded straight into your accounts package every day. No more keying in receipts and payments!

Another issue for business owners is having to be government’s “unpaid civil servant” – You need year end accounts for HMRC (and possibly Companies House), personal and business tax returns, PAYE filings and VAT returns. Thankfully a combination of your accountant and the right cloud based accounting package can deal with all of that for you.

Starting a new business is exciting but also daunting. My job is to hold your hand through the financial complexities of it all so you can avoid the pitfalls on the way to building a successful business.

If what I’ve said here sounds interesting why not get in touch? I’m always happy to talk though plans on a free of charge basis so you’ve really got nothing to lose!