Expanding Your Business – Without Being a Busy Fool
Reflections of a Reluctant Landlady
Introduction
Expanding your business is a natural part of its life cycle. But as I’ve learned through my own experiences, not every opportunity is worth pursuing. One of my most vivid reminders of this came when we opened our fourth pub.
Back in my days as a Director of HR for a medium-sized charity, the Finance Director would often say, “Turnover’s vanity, profit is sanity.” I used to find it a bit trite and after hearing it many times, maddening. I preferred using the phrase – “Anyone can be a busy fool”, which is sadly too true. As I reflected on our fourth pub venture, both slogans rang a bell.
The Opportunity: A Pub on a Busy A Road
It all began when a local businessman approached us with an unexpected offer. He was a self-made entrepreneur who had made his fortune through petrol stations and land-banking. One of his properties was a pub on a busy A road, which he had acquired mainly for the land. He wanted us to take it on, and while I was initially hesitant about adding a fourth venue to our portfolio, my business partner and manager were keen. The pub was free of tie, and opportunities like that don’t come up often. Plus, its location on the A303 near Stonehenge offered us a unique triangle of pubs around the World Heritage Site. So, we agreed to meet the businessman and his wife for a business lunch.
The Handshake Deal That Almost Was
They were eager to seal the deal and suggested doing it the old-fashioned way—with a handshake. While I eventually warmed up to the idea of taking on the pub, I insisted on a proper contract. They reluctantly agreed and so I developed what I considered a fair and transparent contract. When we met again for lunch, they signed it without even reading it and left it on the table as they walked out!
Launching the New Pub: A Case of Mixed Results
Despite their lackadaisical approach, we worked our socks off giving this new pub the best possible start. We redecorated, rebranded it to highlight its connection with Stonehenge, and issued a press release. I personally delivered flyers to local campsites, set up social media channels, and upgraded our website. We tailored the menu to cater to the needs of passersby and hosted an open evening with free food for the locals.
Despite our efforts, the pub never quite took off as we had hoped. It was very seasonal, quiet during in the evenings and either too busy for the size of the kitchen or empty. Although the location seemed perfect on paper, getting traffic to stop was a significant challenge. Those who did stop often just wanted a toilet break and weren’t interested in dining. To counter this, we placed an honesty box in the toilets, encouraging visitors to donate to our charity if they weren’t going to make a purchase. It was quite the profitable fundraiser.
The Hard Decision: Cutting Our Losses
Eventually, we had to weigh the benefits against the costs. Although the pub was generating a profit, it wasn’t generating enough to justify the attention and resources it demanded. It didn’t deliver the economies of scale we had anticipated, nor did it excel financially.
Much to the disappointment of the owners, we gave our notice and handed the keys back. Around the same time, we sold the lease of one of our other pubs back to Punch, leaving us with just two pubs—the ones with the highest turnover and the most potential. These two also had accommodation, which is often the most profitable aspect of leasing tied pubs. My son took charge of one, and I focused on the other.
The Takeaway: Focus on Profit, Not Just Growth
This leaner model made far more sense for us, allowing us to consolidate our business without distractions. It also helped us increase our profit by enabling us to focus more intently on what mattered most.
Expanding your business through new acquisitions can be a positive move, but it’s crucial to follow your gut instinct and stay true to your vision. Timing is everything, and spreading your finances too thin can be a costly mistake. Remember, while growth is exciting, it’s profit that truly sustains your business. After all, as my old Finance Director wisely said, “Turnover’s vanity, profit is sanity.” And as I say to you, “Don’t be a busy fool!”
Interested in reading more blogs? You will find more reflections here.
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