Two pints of lager and a packet of credit crunch
With around 27 pubs closing per week, these are hard times for those in the Licensing trade. But, by following certain steps, landlords can still keep the taps from running dry says ACCA (the Association of Chartered Certified Accountants).
As funds dry up social drinking is often the first luxury that is sacrificed, and this clearly has negative connotations for those involved in the Licensing trade. While large bar chains may be able to absorb losses, large numbers of individual bars, pubs and restaurants may find it difficult to find a way through the current economic slowdown.
It is therefore critical that licensees devote time to financial planning. It may not be possible to influence the downturn or gauge when it will end, but it is possible to shape the finances and forecast the future of an individual business.
ACCA suggests the following five point plan to help landlords and licensees during the crunch:
1. Tax deductibles – Claim everything possible back, find out exactly what is tax deductible, and if Capital Allowances or rural rate relief are available. There may also be additional support or even grants available if the premises provide additional essential services, such as village stores or a post office. Check the HMRC website to find out exactly what relief is available.
2. Customer service – Regular customers generate regular income, so make sure service is exceptional, and give them a reason to come back again and again.
3. PR is cheaper than advertising – Any business can generate PR, but more importantly they can do so for free. Rather than spending so much of your budget on advertising, get your name out there in other ways, be creative! Try hosting events, open-mic nights, theme nights, even social groups, and then post all the information onto the company webpage, and wherever possible, let the media know.
4. The smoking ban – The ban has clearly hit the licensing trade, with many smokers not prepared to stand outside to smoke, they are staying at home instead. To start with, designate a comfortable, warm and dry area for smokers, and where possible, serve drinks to tables outside.
5. Keep track of outgoings – It sounds simple, but make sure that everything is accounted for. If finances are difficult to control, maybe an accountant is required, or the business needs specialist help. Accountants and specialist advice are available and easy to find; search on www.accaglobal.com/publicinterest/finding to get exactly what you need.
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Notes to Editors
1. ACCA is the global body for professional accountants. We aim to offer business-relevant, first-choice qualifications to people of application, ability and ambition around the world who seek a rewarding career in accountancy, finance and management. We have 325,606 students and 122,426 members in 170 countries worldwide.
2. ACCA believes that globalisation of business requires one set of reporting standards. We favour principles-based, not rules-based standards, which is why we support the worldwide implementation of IFRS.
3. ACCA believes that tax systems should be transparent, simplified, fair and certain.
4. Complying with regulations affects SMEs disproportionately, which is why ACCA urges governments and standard setters to ‘think small first'’
For further information please contact:
For further comment, please contact: Chas Roy-Chowdhury, ACCA Head of Taxation phone: +44 (0)20 7059 5976 / + 44(0)7710 707 516 e mail: chas.roy-chowdury@accaglobal.com
Andrew Swailes, ACCA Newsroom phone: +44 (0)20 7059 5823 e mail: andrew.swailes@accaglobal.com