Why pubs are the best place to grow your business

Most of you will already know that I offer support to enterprises, charities and individuals through a range of services and programmes (- my favourite of which is probably ‘beer mentoring’).

What many probably won’t  know is that I used to manage a loan fund for local co-operative enterprises, and am regularly invited to sit on panels to assess applications from start-up and growth businesses to decide whether they should be invested in.

As such I have a perhaps uncommon insight into financing issues as a business advisor, and find myself being asked to speak at various events on alternative sources of finance to the traditional high street bank for business start-up and growth. And it struck me recently that most of these alternatives might be best pursued not in an office, or over the internet, but in the pub as they’re all based around relationships and local knowledge, rather than institutions and ‘risk ratios‘:

• Angel Investors (think dragon’s den but without the scathing comments): people who are going to invest their money into you and your idea. They want to be assured that its not only your idea that’s a great one, but that you’re the best person to be leading on it - they want to get to know you. And what better why  to do that than over a drink?

• Loan stock (think interest only mortgages): this is where other people and businesses lend you their money with the expectation that you’ll pay them back at an agreed future date. These are effectively ‘private loans’ so you can choose where you discuss and agree them - and what more conducive environment could there be to negotiate terms than in a friendly pub?

• Community shares: where local people in a town or village all invest their own money in a common cause (usually buying the post office to keep it open, or installing a wind turbine to create free/cheap electricity for everyone). It can take a long time to knock on everyone’s door to make your pitch to them, so far better if there were a communal place where most of them are regularly assembled…pub?

All these ‘alternative’ forms of finance are based on people investing their own money (not someone elses') and as such there’s a different criteria that these investors are using: they’re interested in you, in building a relationship with you. And that’s something that’s hard to do in a posh office, but far easier over a drink… but they’ll still want to know about your business and be assured that they’re not going to be wasting their money, so you still need to know your numbers - however in a pub setting, you need to know them even more intimately than for a bank: a bank manager will expect you to have lots of notes with you, spreadsheets, etc. But in a pub, if you can’t give people an answer straight away off the top of your head, you’re sunk.

So, pub finance - perhaps a better alternative to the traditional high street bank? but it’ll demand that you know your businesses figures and detail inside out, and able to cite them more instantly than a bank manager would expect… On the up side, all your investors will be rooting for you and doing whatever they can to ensure your success (as its their money at stake!) and the interest you’re paying on the money is going back to other local people and fellow businesses, rather than in bonuses to  bankers…


UPDATE - 04.01.2013
my local paper, the Todmorden News has also just written an article based on this idea  - and in any of you are wondering, yes: I did buy my own pint!
http://www.todmordennews.co.uk/news/local/looking-to-grow-your-business-go-to-t-pub-1-5364076