Five SMB Lessons from a Pub Trade Survivor

A rising tide may float all boats, but success in a poor market is not simply a case of rowing harder; it requires a mix of commercial acumen, creativity and marketing nous.

Take our village pub, The Chequers, for example. In November last year, after a succession of leaseholders had tried vainly to make a living from it, the brewery finally shut the doors and put up a For Sale sign to replace the pub sign.

Our village was not alone. Closing time was called on over 2,300 UK pubs in the UK in 2009, as the market suffered from a poor economy, the smoking ban and a shift in customer tastes to eating out. In short, the pub market is not particularly attractive.

The pub sign has recently returned, however, and I think that the new owners, Dave and Abbey, have a more than fair chance of seeing a return on their investment. The reason for my optimism is that they have focused on how they can create an advantaged customer offer and business model.

Here are five non-traditional steps they have taken that will help the business to grow profitably:

1. They brew their own beer. Rather than receive investment from a brewery and be tied to its beers (and prices), the couple already their own micro-brewery, Fun Fair. As a result, in terms of beer, they only offer their own ales, guest beers and some bottled lagers. This decision will give them higher profit margins and, given the lack of local competition, the limited range isn't an issue for customers.
2. They only open four nights a week. The pub is open Thursday to Sunday, when there is a realistic chance of custom, allowing Dave to focus on his brewing business for the majority of the week. The pub represents additional income to them, not their sole livelihood.
3. They are using partnerships to improve the offer. Dave and Abbey do not wish to cook meals. Instead, Friday night is 'Take Away Night', where they have teamed up with local restaurateurs who have agreed to deliver meals to the pub's customers.
4. They are actively engaged in village life. At the recent school fete, Abbey operated a drinks stall for adults. This may have provided a bit of income but, more importantly, it raised the profile of the pub with their target customers.
5. They are building a wider community. Even before the pub opened, Abbey was using Twitter and Facebook to bring people up to speed on the renovation, asking for feedback on possible wines, crisps and chocolate, and promoting upcoming events. There are over 120 members on the pub's Facebook page; not bad for a village of 500 people.