Avance

Access to simple business advice could save thousands of struggling pubs

More than 500 pubs a year would be saved if licensees were given access to simple financial and business advice at the first sign of trading difficulties, according to specialist outsourcing organisation Avance.

The call to adopt a new advice-led approach to struggling pubs comes during Community Pub Week, which has revealed 1,300 pubs are closed facing an uncertain future, and 56 pubs a month close forever1. Since the launch of its pub turnaround service, Avance’s experts have saved more than 2,000 pubs and other licensed businesses.

Jarlath McHale, managing director of Avance says, “Thousands of community pubs are facing trading difficulties, and many could be rescued and turned into viable businesses if they were given access to the right advice. Our approach turns on its head the traditional view that litigation and insolvency are the only option available to ensure unpaid bills are settled. Businesses that adopt a turnaround focus to tackle overdue beer, rent and invoice payments generate greater returns in the long run.”

Over the past eight years, Avance has found it is possible to turn around 90 per cent of struggling licensed businesses where it is brought in within three months of the first signs of financial trouble.

Avance operates a team of regional pub rescue specialists, all of whom have at least ten years experience in brewing, banking or both. These regional experts are brought in by brewers and pub groups seeking rent or trade credit settlement, but rather than focusing on the short-term settlement of outstanding invoices, they help publicans trade out of difficulty, with the aim that they become successful customers once more.

Says McHale, “In the licensed sector, businesses fail through poor financial controls and a lack of customer focus – both problems that can be solved without forcing pubs out of business, as long as early warning signals are heeded.”

Major brewers such as Coors and Carlsberg already use Avance’s innovative approach to saving pubs, as it protects the value of their customer base by ensuring a large proportion of struggling customers live to see another year in trade.

Avance is currently in talks with a number of major pub groups and lenders such as high street banks to investigate new ways its turnaround approach could deliver better business results than traditional routes.

Jarlath McHale was part of a team that pioneered the turnaround of ailing pubs when he was a senior executive at Bass Brewers.