Chapter 32

Tuesday 8th October was arranged for the meeting with Venture. Despite all his preparations and the rehearsals with Jenny, James slept badly on Monday night and then got under Jenny's feet in the morning.

"Go and walk the dogs," she ordered him exasperatedly, "and I mean a walk not a short meander. Get yourself breathing deeply."

James did as he was told and walked fast for the best part of an hour. He and the dogs were thirsty when they got back.

"Well done, darling," she said as she kissed him. "I'll make you some coffee. Decent stuff. Not out of the machine. We'll keep that for the Egg."

James chuckled and she was pleased that he had wound down.

The Egg and Dick Williams arrived promptly at half past ten and Jenny served everyone biscuits and coffee. She winked at James as she put the cup down in front of the Egg. James stifled a grin.

James welcomed them both and then said, "Well, Mr Gordon, we did make a profit over the year so we're open to negotiate new terms of lease as we promised."

"Well that's good news. What sort of profit?"

"£14,800 mostly from food with beer coming a distant third."

"I see. Shall we discuss that first?"

"By all means."

"What was the profit on it?"

"A little under £2,500."

"What was your mark up?"

"Eleven and a half per cent."

"That's not much."

"No it's not but the reason is that, despite the discount you have given us, your beer, which we're bound to buy, is £45 more a barrel than if I was a free house."

"So?"

"I have to compete with the Featherstone Arms two miles down the road. That is a free house. My beer is three pence a pint more expensive than his but my patrons are prepared to pay that because the varieties of beer Venture provides are good. There's no doubt about that."

"What do you charge a pint?"

"Two ninety."

"That's not bad by today's standards. Surely you could go up five or ten pence?"

"I certainly couldn't go up ten. Three quid a pint would not be acceptable. No one would buy it, we'd lose custom and our sales of bar food would drop as well."

The Egg got out his calculator and played with it. "The cost price of our beer is £2.60 a pint so if we removed the subsidy it would cost £2.99. That's still under your three pound ceiling."

"And we make no profit."

"Ah!" He played with his calculator again. "If we gave you a three per cent discount that would cost you a little under £2.90. You could charge £2.95 and still be under your three quid ceiling."

"And the gross takings wouldn't change and might even drop."

"Why?"

"Because a fair number of our patrons would desert us for the Featherstone Arms, the quality of your beer notwithstanding. Let me tell you our side of the story."

The Egg nodded condescendingly.

"I don't know what your mark up is when you've discounted by fifteen per cent but I'd guess it was still about twenty five to thirty per cent. Let's take twenty five.

The Egg did not argue but merely nodded again.

"For every thirty pence I make, you make sixty five. I've made £2,500 this year so you've made £5,400 odd. That is probably chickenfeed to an organisation of your size but two and a half grand is a lot to us, seventeen per cent of our income. If I raised the price of a pint by five pence and gave it all to you, I would lose that valuable £2,500 in order to increase your takings by £105. Is that the way Venture does business, Mr Gordon?"

"Well, er..."

"I suggest we leave the price of beer alone. That way we may be able to increase sales marginally which would mean that we would retain and possibly increase slightly a sizeable chunk of our income and you should make rather more than the £105 I mentioned a moment ago. Perhaps you and Dick might like to chew that over for a couple of minutes while Jenny and I renew the coffee and biscuits."

"Er, thank you."

The Jays disappeared to the kitchen.

"Brilliant, darling," whispered Jenny hugging James tightly. "I'm sure Dick will be on our side. Clever boy." She kissed him.

They went back a few minutes later with replenishments.

"Perhaps we might move on to the lease now," said the Egg, "and then we can look at both aspects together at the end."

"By all means. What have you in mind?"

"We would like to offer you a three year lease at £700 a month with six months' notice to terminate by either party. Um, we'll leave the beer discount as it stands but review it in six months."

"And that rent is fixed for the entire three years?"

"Yes."

"And there are no other changes to the current lease?"

"No."

"Give me a moment, if you would."

"Of course."

James did a few scribbles on a piece of paper. He did not really need to as this was a scenario that he and Jenny had rehearsed.

"Right," he said smiling disarmingly. "I'm not going to give in without a struggle."

The Egg laughed encouragingly but Jenny noted there was no warmth in his eyes.

"We believe," said James, "that this place, based on seating accommodation alone, has the potential to make a profit of forty-three grand a year but it will never reach that potential without the kitchen being enlarged and modernised. Without that it will probably peak at twenty-nine to thirty in four or five years' time. That is not something we need to discuss now but you might like to mention it to your board in the hope that they consider investment might be a good idea. Looking at the next three years though, we'd like to think we could increase our profit to twenty-three grand next year, thereafter growth will slow down to two grand a year.