Buying an Alcohol Licensed Business – Checklist for the Takeover Day (Vital Information)

Licensed Property Check List on Takeover Day

 Check List for buying an Inn, Pub, Bar, Restaurant or Bistro.

These Check Lists are made on the assumption that anyone taking a lease or a tenancy will have been fully briefed by their Solicitor on their responsibilities within the constraints of the lease and the lists are for guidance and assistance in the taking over of a normal licensed or catering business.

Everyone buying a commercial property from an Inn, Pub, Shop especially a lease should have a full survey to establish their commitment in respect of dilapidations.

  1. Advertising
  2. Always go for completion at the beginning of the month, helps cash flow.
  3. Asbestos check or report, including old Artex walls & ceilings.
  4. Bank business accounts
  5. Barrel is 35 gallons, not to be mistaken for a 9, 11 or 22 gallon Casks
  6. Beer Cellar confirm ownership of equipment and service history
  7. Brewery Delivery time and other Delivery Days
  8. Brulines if applicable, understand the way it works.
  9. Cash and Carry Account
  10. Cash and Change for Tills and Machines

10.  Certification for all electrical appliances where applicable

11.  Cellar Management, understand good cleaning methods

12.  Charities Local

13.  Cleaning supplies for Toilets etc

14.  Close Business for at least mid-day

15.  Cold Storage Check

16.  Contract to buy Business, Signed and completion time.

17.  Contracts of Employment for Staff

18.  Deliveries  on the Day

19.  Delivery Days for all suppliers and order Days

20.  Diary for all Bookings and Incidents

21.  EHO Registration and Food & Hygiene Certs, scores on the doors

22.  Energy Suppliers, Annual Contract

23.  Environmental Performance Certificate

24.  Equipment details of any outstanding rented or financed

25.  Epos Tills make sure you know how they work

26.  External Notices for Car Parks and Gardens

27.  Finance for completion

28.  Fire Risk assessment.

29.  Fire safety equipment contract.

30.  First Aid Boxes.

31.  Fixtures and Fittings, check quality and reject damaged fittings, if damaged since exchange of contracts, ensure that you have enough to equipment to trade with, many vendors remove equipment without realising that they have been paid for by the purchaser.

32.  Gaming and music machines rental agreements

33.  Graph to record Day to Day Takings

34.  Heating Service Record for Boilers and any others

35.  Inland Revenue if you have staff ensure that you are registered

36.  Insurance, Business and property, public Liability

37.  Interview Staff

38.  Licences Pub and Machines, Alcohol Licence, Gaming Licence

39.  Local suppliers Accounts

Butcher, Baker, Builders Merchant,  Catering equipment,  Computer Service,  Dry Goods, Frozen and Fresh Food,  Gaming Machines, Garage local, Greengrocer,  Ironmonger, Local Brewers,

Office Equipment, Plumber, Electrician, Refrigeration Engineer, Wine Supplier,

40.  Operating schedule

41.  Opening night free drinks and food.

42.  PDQ Machines for Credit Cards

43.  Performing Rights and PPL Phonographic Performance

44.  Pets, if you have any, where are they allowed.

45.  Phone Numbers of Essential Contacts

46.  Rates payable and dates

47.  Refuse Collection

48.  Recipes for all dishes

49.  Service Contracts, Rodents, Equipment, Cleaning

50.  Skye TV Contract and TV licences

51.  Smoking legislation signs etc

52.  Snagging list and all queries

53.  Staff Dress Code, if appropriate

54.  Staff Job Description (Jobs Manual is worth considering)

55.  Staff paperwork Inland Revenue, hours etc

56.  Staff References

57.  Staff Redundancy, Details of possible redundancy commitment for existing staff in cost, to you.

58.  Stocktaker for wet and dry goods, do not accept out of date stock

59.  Telephone Details

60.  Trading accounts for suppliers,

National Brewers

Gas supplies for Beer Cellar

Wines and Spirits

Services, Gas, Electricty, Oil etc

Cellar Equipment where applicable

61.  VAT Registration

62.  Weights and measures signs and compliance

Order of Priority for Check List

  1. Contract to buy Business, Signed and completion time.
  2. Finance for Completion
  3. Close business for part or whole of day for takeover.
  4. Stocktaker
  5. Fixtures and fittings
  6. Brewery Delivery time and other Delivery Days
  7. Staff paperwork Inland Revenue, hours etc
  8. Staff References
  9. Staff Redundancy, Details of possible redundancy commitment for existing staff in cost, to you.
  10. Contracts of Employment
  11. Bank Business Accounts
  12. Trading accounts for suppliers, National Brewers, Gas supplies for Beer Cellar, Wines and Spirits, Services, Gas, Electricty, Oil etc., Cellar Equipment where applicable
  13. Snagging list and all queries
  14. Refuse Collection
  15. Local suppliers Accounts, Butcher, Baker, Builders Merchant,  Catering equipment,  Computer Service,  Dry Goods, Frozen and Fresh Food,  Gaming Machines, Garage local, Greengrocer,  Ironmonger, Local Brewers, Office Equipment, Plumber, Electrician, Refrigeration Engineer
  16. Weights and measures signs and compliance
  17. Performing Rights and PPL Phonographic Performance
  18. Smoking legislation signs etc
  19. Phone Numbers of Essential Contacts
  20. Telephone Details of Pub/Restaurant
  21. Deliveries on the Day
  22. Cash and Change for Tills and Machines.
  23. PDQ Machines for Credit Cards
  24. Delivery Days for all suppliers and order days
  25. Epos Tills understanding how they work
  26. Fire Risk Assessment
  27. Fire Safety Contract
  28. First Aid Boxes
  29. Inland Revenue Registration
  30. VAT Registration
  31. Operating Schedule
  32. Licences Pub and Machines, Alcohol and Caming Licenses
  33. Insurance Documents, plus Public Liability
  34. Gaming Machines etc Rental Agreements
  35. Equipment Details of outstanding rent or hire agreements
  36. Certification of Electrical Appliances etc
  37. Cellar Management etc
  38. Cash and Carry account
  39. Cold Storage Check
  40. EHO Registration, Scores on the Doors
  41. Heating service record Boilers etc
  42. External Notices for Car Park and Gardens
  43. Environmental Performance Certificate
  44. Asbestos check or report
  45. Energy Suppliers, annual contract
  46. Beer Cellar confirm ownership of equipment.
  47. Diary for all Bookings and Incidents
  48. Cleaning supplies for Toilets etc
  49. Interview Staff if available
  50. Opening night free drinks and food.
  51. Rates payable and dates
  52. Service Contracts, Rodents, Equipment, Cleaning etc.
  53. Advertising
  54. Always go for completion at the beginning of the month, helps cash flow.
  55. Barrel is 35 gallons, not to be mistaken for a 9, 11 or 22 gallon Casks
  56. Brulines if applicable, understand the way it works.
  57. Charities Local
  58. Graph to record Day to Day Takings
  59. Pets, if you have any, where are they allowed.
  60. Recipes for all dishes
  61. Skye TV Contract and TV licences
  62. Staff Dress Code, if appropriate
  63. Staff Job Description (Jobs Manual is worth considering)

Never buy a business at the end of the month; always buy at the beginning of the month. If you can set up monthly accounts, which are payable at the end of the month following, you effectively bank about six weeks takings before you pay a serious bill. This gives you a good cash buffer and impresses your bank manager, if that is possible.

A salutary story to be taken seriously: a young couple, who had both left reasonably well paid jobs in the computer industry, went to one of the larger Pub Leasing Companies. They were shown what appeared to be a tired but reasonably attractive pub near a major city. It was being run by a management company because the last tenant had gone bust. A management company is not as glamorous as it sounds – there are loads out there. They put a temporary manager to run a pub where the tenant has gone at short notice, they pay little or no rent and carry out a holding job to keep the pub trading. In a lot of cases, they run the place very badly, since it is of no real consequence to them how well they do because it is a short term operation. In this case the pub company BDM (Business Development Manager) told the couple that the tenant was leaving on 28th of the month. They did not realise that it was a management company. The DBM told them that it was a fantastic opportunity to get into a great pub with terrific potential, and that the present tenant was not up to running it, which was certainly true. They said their solicitor had not completed all his investigations. The BDM said not to worry and that they could sign the lease after they got in; if they didn’t move right away, another couple would take it. The couple rushed in and took over. They said they had no idea how much stock they needed since they had not spent any time in the pub. He said not to worry and that he would order it all for them and they went like lambs to the slaughter. They got in, they paid a cheque for the Stock at Valuation (SAV) and found the bulk of the stock was unsellable. They did not use their own stocktaker. The BDM stacked the pub out with so much stock, telling them that it was a busy pub.

They realised that the temporary tenant had lost any local business worth having and that they had too much stock which they sent back. They were direct debited two weeks later for all the stock that the BDM had ordered, the refund for the returned stock did not come through for two months because of the convenient vagaries of suppliers’ paper work systems. They are great on bills and terrible on refunds (the refunds have to be authenticated). The total result of this chaos was the couple’s cash flow immediately went out of the window and the funding for refurbishing was put on hold. By that time they realised that there was no business there and it would take at least a year to get it going. Sadly with very little business and their budgeted cash flow shot to hell they lasted a year and learned a very sorry lesson. If you find that the pub is being run by a management company, be careful! They are only there because someone has been in trouble. If you are a gambler with a fair amount of money or an experienced operator these places are worth looking at. But, if not, be extremely careful. I always work on the principle that I have enough cash reserves to carry out any immediate updating and six months negative business and even so I have sailed close to the wind on various occasions.

It is possible, with suspect pubs belonging to pub companies, to do a deal with them. Refuse to accept the existing lease if the tenant has left and then play their game: tell them that you will spend money on the place and get it up and running, provided they allow you a minimal rental for six months or a year. You will then agree to sign a lease, but make sure you have agreed the format for the lease and are able to sell it on with a new lease. You can make some capital growth without spending a vast fortune. If the Pub Co says that they will carry out the improvements, the rent will go sky high again – be very careful. This sort of deal happens occasionally if they are desperate.

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