future advise

[ray72]

hi freinds have not been on forum lately, but i know where to come when i need advise, i have been on joint iva with my wife for the last6 months so still away to go, question: i would love to change my job from a farm worker to running our own pub/restaurant, we have looked on the web and there are lots for lease all over the uk. for as little as £12000. per year, question is would i be able to take this road, being in an iva, also would anyone be willing to help financialy, i would love to better myself after the mess i got into with credit, a mess i wont get into again thats for sure any advise would be greatfully recieved thanks

[MelanieGiles]

Hi ray72

To take on that sort of project you will undoubtedly need some form of capital investment to buy the lease - unless you go in as managed tenants in which case you will receive a salary from the brewery and possibly a profit share - although these types of arrangement are getting rarer and rarer.

So far as the IVA is concerned, so long as you can earn enough money to fund your monthly contributions then the Supervisor will not be too worried about your planned career change. Don't forget though, it is far more difficult to manage an IVA when you are self-employed rather than employed and receiving a regular income, and there may be concerns about your abilities particularly if you have not been in the catering trade before.

You will not be able to borrow the funding from a bank, or rack up trade creditors during the period of the IVA, so perhaps you have family members who could help out. It sounds a great dream, but one which is possibly better fulfilled when you have completed your IVA and have no pressure on your finances. As any publican will tell you, be prepared to work 90+ hour weeks as well to make a go of things!

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.

For further details contact me at http://www.melaniegiles.com and view my IVA blog at: http://melaniegiles.blogs.iva.co.uk

[Adam Davies]

Ray
That sounds a great way forward for you but one that I think you would be better taking once your IVA has finished.You will need financing and after your IVA will be debt free and in a great position to fullfill your dreams.
regards

Andy Davie
IVA.co.uk Spokesperson and site manager
(aka Neverending)

Please check out my blog: http://andydavie.blogs.iva.co.uk

View my profile here:
http://www.iva.co.uk/andy_davie_profile.asp

[sammarchant]

Hi Ray
I just wanted to say to you, be very careful if you are getting into the pub/restaurant trade.

I speak from experience when I say that it is very very hard work for little or no reward. All of your customers will tell you how to run the pub and how they could do a better job than you. I personally worked 90 hours a week which left no time for any sort of family life.

Me and hubby have just gone bankrupt after spending 4 years running a pub. we ploughed our life savings into it and continually had to borrow to afford to keep the roof over our heads.

If you take on a lease, the pub company will only be interested in themselves not you. they will gradually put the rent up and you will be tied to them for beer supplies at uncompetitive prices.

Rent as an industry average is about 15% of turnover, VAT 17.5%, cost of supplies 50 - 60%, wages 20% running costs (gas,elec,water, business rates, maintenance etc etc) 10% = 112% you dont need to be a genius to see that its a recipe for disaster.

Also, the smoking ban comes into force on 1st July which will have a massive impact on trade for pubs.

Also, you will have to pass credit checks to get a pub in the first place and that might not be easy if you are in an IVA. And you will have to find money up front to buy the fixtures and fittings and give the brewery a rental deposit (usual 1/4 of the annual rent)

Im not saying dont follow your dream Ray. Im just saying think very very carefully and do your homework properly.

All the best
Sam

[ray72]

thanks 4 your advise it was greatly recieved, i am going to take the advise of you all and wait till after my iva, then and only then will i really have a good think about the idea, as stated it will take over my life regards to you all

[sammarchant]

good luck Ray

You could always try your hand at pub management before committing any of your own money into a project. Wetherspoons are managed houses, as are M&B (used to be known as mitchells and butlers. Why don't you check out their websites for opportunities? It would give you a proper taste of the trade without any risk on your part.

Salary is not fantastic (usually about 15k)but they usually come with accomodation so no mortgage/rent, council tax or utilities so that 15k would nearly all be disposable income. Also as an employee you are protected from working ridiculous hours and would get a minimum of 4 weeks holiday.

I have just gone bankrupt, but as stupid as it sounds, I would love to be running a pub again. It's just that next time I will not be putting my own money into it.

Good luck with whatever you decide Ray
Sam

[ray72]

thanks everyone for your advise and i am taking all of your advises wait till after iva, dont run own pub but have a look at your way sam as tenents, great site this