Opening and running a pub in the UK isn’t like any other type of business. It comes with a very unique set of skills, responsibilities as well as legal requirements to follow. It can be a lot of work but a lot of reward.
Shifts in consumer trends and culture have meant we’ve seen what a pub can be reimagined, and after the COVID lockdowns, UK customers have been keen to get back down to their local. However, there’s a lot to think about, and recent labour shortages, supply issues and rising energy costs have made business difficult for publicans. Every year more and more pubs are closing, and it looks like more will follow.
This is both a great opportunity but also a tale of caution for new pub owners. There’s a keen consumer base, and lots of premises that are ready to be relaunched.
In our guide, we’ll explain everything you need to know about opening a pub in the UK, from choosing a location, to picking an EPOS system and getting your licences sorted.
- What does running a pub involve?
- Before you open your pub
- Opening a pub
- Managing your pub
- Opening a pub in the UK FAQs
What does running a pub involve?
Pretty much everyone in the UK will have been to a pub at some point, which is one reason many people want to open their own. Due to COVID, in recent years the whole hospitality industry has suffered, and the pub sector has changed.
According to figures from the ONS, the food service industry has had the largest decrease in working hours, and the chaos of lockdowns created a challenging environment. Pubs had to be innovative and think creatively, and this combined with customers being more demanding than ever means the industry has become more ambitious. Less people are going to the pub for just a couple of pints now, they are looking for a gastro or themed establishment that they know will look after them.
Landlords come from all walks of life. The main skills you’ll need to be a pub owner include:
- Commercial awareness and business knowledge – as you’ll be responsible for the livelihoods of your staff, you need to know about employment laws, management techniques and training
- Knowledge of licencing laws, health and safety and food hygiene
- Good communication and friendly so you can create an environment customers will want to come back to
- Enthusiasm for the pub trade and hospitality industry
It may help to get some experience working in your local pub if you’ve not done this before. This will give you a practical insight, and will also help you work out what you’d want to implement into your own business.
Before you open your pub
Think of a name
One of the first things you’ll be thinking about is what to call your pub. It’s the first thing people will see or hear, so it should be memorable and intriguing.
You could choose a classic pub name such as The Red Lion, The Crown or The Royal Oak but it may be beneficial to go for something more unique.
A lot of pubs look at their location for inspiration – if you’re on a hill, near a river or by the sea you could incorporate this into your name. This can also help position yourself within the community.
Overall, you should be thinking about how the name can tie into your overall branding and the feeling you want to give when someone visits your pub.
Find a location
Where your pub is located will have a huge impact on the clientele and the type of pub it will be. If it’s in the city center, it will probably be more busy, especially at lunchtime and after work hours. If you go for somewhere more rural, you’ll probably have a more communal feel.
This will also affect your menu pricing, and costs to run the pub.
Choose between a tenancy and a freehold
The contract you have with the pub will hugely impact the running costs. Make sure you find an arrangement that suits you – the options you have will be between a tenancy, leasehold and freehold. Most pubs in the UK are not independently owned, most will be owned by a pub company.
Tenancy
A tenancy is a good option if it’s your first time entering the pub trade. It is the easiest option, and the most common. You’ll get a contract for around three years so you can dip your feet in without making a long term commitment.
This type of contract will involve running a pub for a brewery or pub group. You’l have a lower rate of investment and cheaper rent, but you’ll like be obliged to only sell products supplied by the brewery or company in a beer tie arrangement.
You can also get a free of tied agreement but these are less common. This means you can shop around to find the cheapest prices and stock the brands you want, but it will be more expensive up front.
If you go for a tenancy, you won’t have to pay the upfront costs of furniture, glassware and infrastructure as it will all be provided.
The trade-off is that you could end up paying more for beer and drinks than the market rate to balance out the cheap price you’re getting for the premises.
Leasehold
Leaseholds are normally for more experienced pub owners. The contract lasts for over 10 years and usually requires up to £250,000 as an investment. You rent the site from a brewery or pub company still.
Freehold
A pub freehold is when you own it outright. This is the riskiest and most expensive way to run a pub, as the cost to buy is often more than the pub’s turnover. However, you’ll have full control over the pub – from decor and furniture to alcohol suppliers. You’ll be able to benefit from property appreciation and if you’re able to run your pub successfully, the wards can be huge.
This is the best option if you want to create a pub in your full vision, as long as you have the money to back it up!
Startup Costs – how much does it cost to start a pub?
If you’re going for the tenancy route, these are usually between £20,000 – £50,000. This covers the furniture and fittings for the pub and a deposit for any emergency costs if you can’t cover your drinks bill. The rent will depend on the location, size and type of the pub but usually it is around 12% of turnover.
Buying a leashold is more complicated, and if negotiated with the previous leaseholder based on their accounts. These can start from £30,000 but can get a lot higher if the pub is successful.
The most expensive is the freehold option. This is normally one and a half times the turnover and costs will start from £120,000. Independent buyers will probably be competing with bigger pub companies on freehold purchases so prices can rapidly rise, and in a big city such as London investment could be around £3 million. You can get funding through a lender for up to 70% of this, as well as opting for a brewery loan if you want.
Create a business plan and analyse your competition
One of the first things you should do is create a business plan and make a realistic estimate of the amount of demand you’ll get.
Complete a SWOT analysis on other pubs in your area to see how you’ll fit in with them. What are they doing well that you could implement in your business, and what are they missing that will get customers to visit you? You should also look into what other hospitality businesses such as restaurants and cafes in your area are doing, as they could also potentially take business from you.
If you are choosing a tenancy agreement or buying a free house, you will be able to get details of the previous income for the last 12 months. This will help to give you an idea of the amount of demand there is.
Looking at the area your pub will be based in will affect your product range and what services you offer. If you’re in a city with professional workers, you may benefit from having a good range of wine and craft beers, but if you’re in a nightlife-heavy area your customers will probably want stronger drinks and good prices with entertainment.
Opening a pub
Get the right licences
If you’re just starting to look into this, it can be confusing what licences you need to sell alcohol. You’ll need a personal licence to authorise your staff to sell alcohol on the site and a premise licence so the site is allowed to sell alcohol. You must be over 18, have no criminal record and understand the legal and social responsibilities that come with running a pub.
Premise licence
This is so your pub’s location can sell alcohol. To get this, look on your local council’s website for an application. With this licence you’ll need to adopt an age verification policy and provide free drinking water. You’ll be responsible to promote drinking responsibly.
Personal licence
To sell alcohol yourself, or to allow your staff to do so, you need a personal licence. First, you need to get a qualification for an accredited provider. Once you’re qualified, you should legally declare yourself a designated premises supervisor (DPS). The DPS on a site must always hold a personal license and is the key person responsible for the sales and supply of alcohol. They’ll be the first point of contact for the government and police. Their must make sure the pub meets four licencing objectives: prevention of crime and disorder, protection of children, public safety and reduction of public nuisance.
Get insurance
In additional to licences, you also need to make sure you have the right insurance. You’ll probably need:
- Public liability insurance which protects you if someone has an injury or damage to their property as a result of your business
- Employers’ liability insurance, which you’ll need if you have employees
- Business insurance, which covers building damage such as caused by a fire or flood
Hire your team
Your staff will be key to your pub’s success. If they are friendly then they’ll help to create regulars and encourage repeat business, but if they are rude people won’t want to come back.
Patrons should feel comfortable and welcomed, so emphasise this when you hire and train your staff. You’ll need to hire:
- Bartenders – potentially the most important role in the pub. They will be the key point of contact with customers so should be a good communicator.
- Barback – your barback will be in charge of collecting empty glasses from tables and ensuring the bartender has a steady supply of clean ones.
- Chef – if your pub will be serving food, you’ll need a chef. The gastropub has risen in popularity over recent years, so if you are, people will expect something decent. This doesn’t have to be gourmet quality, but make sure the chef is competent.
- Wait staff – if you’re serving food you’ll also need a couple of wait staff on shift. These won’t have to give restaurant level service, but are needed to take dishes from the kitchen to tables and back again.
Source your pub equipment
Draught beer systems
The most key equipment in your pub will be your draught beer system. A pub wouldn’t be a pub without beer on tap!
The two main parts of this are the taps, which are on the bar, and the kegs, which are in the basement. These are connected by tubes that should be regularly cleaned and changed.
Draught beer will be delivered in kegs by your supplier, which you’ll have to connect to the tube lines so they can be dispensed from the taps. Your pub cellar will provide the perfect environment to keep your kegs nice and cool.
When they are connected, the beer will make its way up the line using carbon dioxide, which creates pressure. Your system will have a pressure gauge so you can control the pressure within a keg. Make sure you choose the right pressure level to keep your beer and ale fresh, as different kegs will have different requirements. If you have too much pressure, the beer will be foamy, but too little and it will go flat.
Glassware
You’ll need to purchase the right amount of glassware so you don’t run out. Keep a selection at your bar but store some backups in the cellar.
Think about how many customers you’ll be serving and remember to account for shrinkage and breakage of glasses.
You’ll definitely need pints and half-pints, as you’re legally required to serve beer in these measurements. You may get a free set of branded pint glasses when you buy beers from a supplier.
You’ll probably also need wine glasses, tumblers and cocktails glasses at your bar.
Measures and pourers
In the UK, you are required to serve alcoholic drinks in set measurements:
- Wine – 125ml or 175ml
- Spirits – 25ml or 35ml
- Draught beer and cider – full pint, half pint, third or two-thirds of a pint
- Fortified wine – 50ml or 70ml
You must stick to these measurements or multiples of them. For example, cocktails could have double units so would have two shots of 25ml in them.
To make sure you stick to this, you’ll need equipment to measure the right units. For cocktails, you’ll need jiggers to make this easier. You can also place pourers on top of spirit bottles to avoid spillages and help with precision.
Pub games
To get your customers to stick around for longer, you might want to integrate some pub games. The most common are a pool table and dartboard, but if you want to be more unique you could think about air hockey, arcade games and football tables to create a fun atmosphere.
Invest in the right technology
Pub technology has come on leaps and bounds in recent years, and can be a great way for your business to save money and become more efficient. By choosing the right system from the start you’ll be able to hit the ground running.
EPOS system
The main piece of technology you should be looking at is a pub EPOS system. This is an electronic till system, that will manage your menus, process orders, collect data and produce reports that will help you manage your pub.
Handheld ordering tablets
If you’re serving food, you may want to give your wait staff handheld ordering tablets so they can place orders during table service. Orders placed on the tablet get sent to your bar or kitchen printer, so your staff can start making their drinks or food as soon as possible.
Contactless card readers
If you don’t have a contactless card reader, you could be using out on a lot of business. More than 7.4 million brits are now living a ‘cashless life’ so make sure you’re not getting left behind. These can help speed up service massively during busy times and help to cut down queues at the bar.
Decide what to sell
You need to know where your income is coming from, and how important each component will be to the business.
Wet sales
The drinks you stock will be affected by your customer base. Whatever that is though, you will want a range of drinks so there’s something every customer will enjoy.
Typically, this will include beer, wine, spirits, liquors and a selection of soft drinks. If you want something more sophisticated you can offer cocktails and mocktails.
To draw in more day time guests, you could also think about offering a hot drinks range of coffee and tea.
Food sales
Offering food is a good way to get guests to stay in your pub for longer. This can range from a simple bar snack menu, to a full restaurant service.
Sunday lunches are always a great hit at pubs, and if you’re in a holiday area afternoon tea can be a good idea too. Think about offering regional specialities to draw in more visitors.
If you decide to offer full meals, think about incorporating online ordering for takeaway and click and collect. You could sign up for Just Eat, Deliveroo or Uber Eats, or offer a service for customers to order directly from you.
Managing your pub
Utility costs
Like any business, you’ll have to pay for your utility bills. A pub can use a lot of electricity and gas, and your location can have an effect on this. It’s difficult to predict exactly what your utility costs will be, especially at the moment during turbulent price increases.
Stock control
Managing your stock is essential to running a pub, helping you to maximise your profits and plan for the future. If one type of ale is vastly outselling another, you’ll want to make sure you have enough stock to meet the demands, and you don’t want to be buying too much stock that won’t get used.
There are a few ways you could manage your stock. You can do this the traditional way, sifting through to books to try and find patterns or just observe how much everything is selling. A more reliable way, and what we would recommend, is using an EPOS system to keep track of this for you.
For example, with Gardiff EPOS, you can quickly and easily view an accurate record of all your stock, orders and purchases. You can track this in real time, and view your data from anywhere you have an internet connection.
- Create supplier stock orders and book these into your software to automatically update stock levels
- Create recipes for custom items such as food dishes and cocktails
- Sync your data with your back office so you have an end to end view of your operation
Employee management
Managing your employees is a toss up between reducing labour costs as much as possible, whilst still keeping everyone happy. The industry has a historically high turnover rate, so you need to be able to train new employees quickly on your processes and any software or equipment you use.
Not all your staff will need access to all your tech, which is why a good EPOS system will let you limit employee permissions to certain features. This means you only need to teach them the essentials such as taking orders and payments.
Sales reporting
We know if you’re looking to open a pub, the last things you’ll probably want to spend your time doing are creating sales reports and forecasts. That’s why it’s important to choose an EPOS system that makes this as simple as possible, so you can see all the important data in one place.
Reports you’ll want to have include:
- Best selling products, purchase orders and stock
- End of day reports for an overview of your sales and cash activity
- User reports on different staff members so you can track their performance
Marketing your pub
The rise of social media has made marketing your pub easier than ever. You now have access to a whole market that would have been difficult to reach in the past.
It’s important to know your audience and plan posts around who you’re targeting on your social platforms. The main age groups on social media are millennials and gen-z, but these groups are also known to not drink as much as previous generations. To combat this, you could think of extra ways to draw this age group in. Some extra ways to make your pub attractive to new audiences include:
- Pub quizzes and games nights
- Hosting special tastings for beer, wine or spirits for enthusiasts
- Live music or a juke box
- Bar games such as darts and pool
- Arcade machines
- Show live sports on the TV
- Convert rooms into bedrooms for overnight stays
Who you choose to target will also depend on the location of your pub, and the demographics of the area.
Whatever your pub offering is, you’ll be wanting to let people know about it. You could advertise in the local newspaper and leisure guides, and put up banners or posters outside the pub so people know what you offer.
You’ll probably want your own website showing off what makes you unique. You could also take bookings and enquiries through here.
Special offers and discounts
You will need to be careful what you are promoting, as there is a government ban on irresponsible promotions leading to binge or ‘speed drinking’. Pubs are also required to have fresh water available to customers for free.
A lot of pubs have a ‘happy hour’ in the early evening to attract more customers. Promotions on specific types of beers is also common.
Opening a pub in the UK FAQs
Can I run a pub with no experience?
You don’t need to have previous experience to run a pub, but it will definitely help. Running a pub uses many skills, so any relevant business or management experience will come in handy. Personality also makes up a big part, as you’ll need plenty of enthusiasm and good communication to succeed.
Is owning a pub profitable UK?
Pubs are a core part of British life, and they’ll always be needed. It can be an extremely lucrative business if you do it right, and there’s more opportunities than ever to break the mold to increase profits.
Profits will generally be 20-25% of turnover, and this will depend on the size of the pub and if you have a tied lease.
Can I run a pub without a Licence?
No – all businesses that undertake licensable activities must have the correct licenses to do so.
Opening a pub in the UK does have its challenges, but if you do it right, it’s an incredibly rewarding career. The number of pubs in the UK has been declining every year, so there’s more of a need than ever for great pubs that can bring the community together.
If you’re looking for an EPOS system for your new pub, get in touch.
