How to get into business with no capital?

Hi All,

Firstly this has all just flooded into my thoughts in the last number of days and right now I am just trying to get a general idea of how to get on the right track to accomplish what seems like an unachievable dream at the moment.

My husband and I have always said that some day we'd love to buy a pub in the country and retire etc. However in the last few weeks he's become tired with his job and is thinking of looking around for something else.

It occurred to us that now is the time to do something like run a business, while we're young enough to put in the work to make it successful.

We're both in our late 20s, I have a relatively good job, earn 50k a year and could stay in this job, or at least my industry while we would go ahead and try and start a business in the licensed trade.

The biggest issue we have is that we have no capital at the moment, we just got married and as you can imagine that took up most of our savings. So, we have a paltry amount at the moment ;-)

We've never purchased a property, we rent at the moment as we've been moving around and only settled back in Cork 2 years ago. So we cannot get capital from a remortgage or selling a house.

What we would like to achieve is to buy a pub, with living accommodation (c. 500,000 euro), and run that as a family business with my husband doing most of the day to day running of the business while I would continue on in my present job.

My questions are:

Is it possible to buy a property like this with a personal mortgage or does it have to be a commercial one? We would be using the property as our primary residence.

If buying with a commercial mortgage do you need a large percentage of the purchase price as a deposit? There seems to be little information freely available online on commercial mortgages.

Is there any way that you can get into business like this without hundreds of thousands of euro in capital to invest?

We have the option at present to build a house on a site my husband owns, it's not in a practical location for us to live permanently (or ever really) but perhaps we could take a mortgage out to build and then sell the property while continuing to rent but thereby freeing up some capital.

Where to start with something like this? We're prepared for the long slog and potentially having to spend a few years getting ourselves into a position to be able to do something like this.

I can't answer your specific questions, but let me raise two important issues.

1) Do you know anything about running a pub? If not, do you really want to put your own (or your borrowed) capital at risk while you learn. Why not get your husband to get a job working in a pub as a first step, so you can learn the trade at someone else's risk.

2) Are you sure that it makes sense to get into the rural pub business at this stage. While I'm sure that the moaning is exaggerated, all I hear from that sector is moaning about the smoking ban and the drink driving laws. I'm not sure this is a great sector to target for your future.

1) Yes, we do know quite a bit about the running of a pub, both of us have been employed in the hospitality sector for an average of 5 years each in various pubs from city centre 4* hotel bars to rural, quiet pubs. I don't pretend to know everything e.g. I have never dealt with the finances of a pub but a number of my husbands family are involved in the running of hotels/pubs. It's not something that we would rush into without being prepared, if seemes like a viable option for us then he would most likely go and work with his uncle e.g. to learn the higher level stuff that we wouldn't have been exposed to being an employee of someone else.

2) That's a very valid point and probably explains the number of rural pubs that are on the market at the moment ;-) We'd be looking for something that was a viable business obviously, and doing full feasability studies and planning before taking the leap.


I work in the IT sector at the moment, I have experience with project management and people management. My husband works in the financial sector (personal banking though and not commercial) so he is good with financing and budgeting etc. We'll speak to a business advisor next week and have access to some family friends who are in accountancy. I guess here I am looking for a breadth of experience and advice! Call this my initial fact finding expedition.

The rural pub sector is a dead duck at the moment. No bank will lend money to a new entepreneur to enter this sector unless they have substantial capital behind them or a business plan that is radically stronger than the norm.

Ok, thanks ;-)

Perhaps I need to ask my mortgage related questions under another section.

Would you consider leasing a pub. A number of counrty landlords who are trying to sell up may be willing to consider a lease to you. It is not without its risks. A client of mine did it and it is working out for him.

A short term lease may not require key money and you would only face a weekly rent. You might not get the security of a long lease, you might only get a month to month arrangement or maybe even a year.

However there are plenty of pubs out there and if as the other posters advise the rurual pub trade is dead you will know quickly enough without the incurring the long term headache of actually owning a pub.

Thanks, I think that is a route we might look at so as not to tie ourselves down straight away. We'd just be looking for somewhere we could live in the property and I was able to continue working in my present job.

As far as the rural pub trade side of things we would be going for somewhere in a village/small town, preferably a running business with an established clientele and trade, we have seen a couple of interesting looking ones. I just don't want the headaches the come with large town/city centre pubs and we'd prefer to have one with a small number of staff required, ideally a family run place.

We're after a lifestyle change rather than a business to make us millions. Probably not the best way to approach getting into business but it's only something we're looking into at the moment.

i could be wrong here but i think you'd probably need even more funds if you're leasing a pub. All suppliers will only deal with COD if you're leasing. You'd probably need key money which may equal the deposit of the property anyway

Well, we took initial steps yesterday to finding more information - spoke to a friend who works in the commercial mortgage business, we'd likely need up to 50% deposit to buy for some lenders but potentially with a great business plan you could get up to 80%.

He's looking into options wrt personal mortgages since we'd be using the building as our primary residence but it's probably not a goer as a bank will be less likely to take away your residence and resell to clear a debt if things go bad where as with a commercial property they are more likely to do it.

In any case the guy didn't laugh us out of the bank for approaching him with the idea so next steps will be to look at raising capital and speak to an accountant.

I'm sure I'll be posting on here a lot in the future.