What’s next when you have done all that there is to be done with one site? You could take the same approach as Hans Gruber in Die Hard who says: “And when Alexander saw the breadth of his domain, he wept, for there were no more worlds to conquer.”
That, though, was in a film – and is a corruption of a Plutarch text. For you, there will always be more worlds to conquer. Once you have maximised your first site, it is the time to apply your skills as an operator to a second site and maybe more.
Just because you have conquered your first site, however, doesn’t mean that taking on and maximising additional sites will be anywhere near as simple as before. Many of the same skills you learnt from that first outlet will come in handy, but there is a whole lot more that operators will need to consider on top of that.
Mick Howard, who is operational commercial strategy director at Star Pubs & Bars, believes that the key to maximising a second site is not only using the winning skills from the first site, but also replicating the winning idea.
“If you take on something that’s massively different from your first business, you will find yourself out of your comfort zone. Unless you’ve got an absolutely barnstorming idea that’s different from your first one, a recipe for success would be to repeat what made your first place great.”
Here is what various operators and industry figures see as the most common mistake from aspirational multiple operators.
Not having a back-up team in place "Operators will need a team that can work with a high level of autonomy while the second site is being set up. Many upcoming operators won’t have a great deal of experience of relying on the staff so heavily while they are absent, yet they will need to be 100% sure that the standard will remain in place once they take on another site." - Paul Davey, managing director of Davey Co
Rushing in to the second site "We see many people that have not taken the time to get the business plan right and have the right people in place." - Mick Howard, operational commercial strategy director at Star Pubs & Bars
Not managing time appropriately "My role with the second site is very different to what my role was with the first site. However, you do want to make sure that when you go on to the second site, the staff feel looked after as well. I have achieved that by making sure my time has been managed as effectively as can be." - Victoria Cooke, operator behind Yorkshire pubs the Wheatsheaf in Hull and the Crown Tavern in Scarborough
The managing director of Davey Co, Paul Davey, agrees. “Whatever aspects worked with the existing unit in terms of demographic and offer, all those boxes should be ticked for the operator to replicate that,”
Every rule broken
Yet this attitude is not universally held. Paul Sugden is a multiple operator who acquired a second site in the past year. After operating the Black Horse in Amberley, Gloucestershire, for two and a half years, he and his business partners added the Village Inn in nearby Nailsworth to their portfolio.
But, while the Black Horse is a countryside inn with an even wet:dry split, the Village Inn is a wet-led town-centre pub.
“I think that I broke every rule that I had been told in this trade, which was to find a second site where you could replicate what was being done at the first site with a view to starting a chain with an identity,” Sugden admits.
Whether choosing to replicate the successful formula from the first site or trying something completely new, it is important to have a thoroughly thought-out plan for the second site.
“Some operators see a property that looks like a great deal, but if they took a step back and looked at it more operationally, they would realise that what they need is not only the best deal from a property purchase perspective, but also the best deal for their particular style of operation,” Davey says.
Beyond that, a plan will need to be in place for not only financing the second site, but how to divide time between the two sites, according to Star Pubs’ Howard.
“Those ‘going multiple’ need to consider whether they have the cash flow for it, because otherwise you risk putting your first site in jeopardy.
“If you don’t have the cash flow then you’re going to be up against it from the off. For that reason, a detailed business plan that shows you have understood what you are getting into is very important.
“Have you then got the right people in place and are you able to delegate? You can’t spread yourself over two or three sites, so recruiting, training and developing your staff is a whole different skill set to what you will have done over one site.”
Financing the sequel
There are many financial options in place for the second site and the flexibility of them depends on whether the sites are freehold, leasehold or a mix.
Avoiding taking on additional debt to finance the second site is preferable, but not always feasible, especially if the second site is freehold. However, there are other options.
Paul Davey explains that he has seen some operators adopting flexible approaches to taking on an additional freehold site. “If an operator has a freehold site and is looking for another one, there may be the opportunity to take a lease with a purchase option. Then the capital requirements are lower and of very real benefit to budding multiple operators,” he says.
One operator who followed this model is Sugden. “We got the Village Inn on private leasehold from a local individual. We discussed the freehold option with him, but we decided it wasn’t something to pursue at this time.
“The right thing to do at this time is to get some money back in the bank over the next two years with just the two sites and make the two sites stand on their own. We would have struggled to do that by having the second site on a freehold basis,” he says.
Reliance on others
The next consideration is how to manage the time spent at multiple sites. When there is just one site that requires tender love and care, it is easy to make that the sole focus. With more than one site, lavishing this amount of attention is impossible.
Victoria Cooke has recently taken on a second Marston’s franchise site. Having run the Wheatsheaf in Hull, East Yorkshire, she is now also the operator behind the Crown Tavern in Scarborough, North Yorkshire, and says that having a reliable team at the second site is key to helping her time management.
“Having a manager in place at the Crown Tavern takes huge onus off me. When we took the second site, we made sure he was the face of the pub. I can then concentrate on the behind-the-scenes side of things,” she says.
Not only should the second site have trustworthy staff, it also needs to be in an optimum location. The key here is in making sure that you will not be giving yourself hours of travel while, at the same time, ensuring you won’t cannibalise your existing customer base, according to Davey.
“It will need to be something that is non-competing from a geographical approach, but it will need to be close enough to be easily accessible. Anything more than an hour away, while not impossible to do, would add substantially to time pressures.”
While the whole prospect of becoming a multiple operator may sound daunting, a simple key to remember is that perseverance and a strong vision for your budding empire is key. After all, Rome wasn’t built in a day.
This MA feature was sponsored by Star Pubs & Bars
Star Pubs & Bars is the leased pub business of HEINEKEN UK, with a choice of great pubs to let, all backed by a major capital investment programme. We only operate leased and tenanted pubs and bars so you can bring your entrepreneurial flair and energy, and we bring a deep understanding of the market, industry leading innovation and a range of training and support packages.
Together with you we aim to run the best pubs and bars in the best locations with the best support and training possible. We believe in teamwork because by working closely together we can achieve the greatest success
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