Opening a Pub: Everything you need to know
There is nothing more quintessentially British than a pub. From the fragrant ales to the worn-down carpets, it truly makes us feel at home, which explains why opening a pub is many people’s lifelong dream. Whether you’re dreaming of running a traditional Irish pub or a trendy parlour, it can be daunting to make that first move, especially when you’re not sure where to start. So, how do you decide on a concept? Where should you look for a lease? And what costs do you need to be prepared for? Continue reading our ultimate guide to opening a pub to learn all this and more.
- Do your market research
- Find the right premises to lease
- Figure out what licensing you need
- Understanding your start-up cost
- Source liquor suppliers
Do your market research
Before you open a pub, it’s important to come up with a concept. Football pubs, chic and trendy bars, wine saloons — there are so many different themes and styles to pick from. And even if you already have the best idea in mind, it’s vital to educate yourself about the industry. Study what works and what doesn’t, the most popular types of establishments, and where your target audience frequents. Note where the market is saturated and where the gaps are so you can make an informed decision and open the best pub in your area. In this day and age, three types of pubs pop to mind in particular:
As you can probably tell from the name, a micropub is a smaller establishment, usually consisting of a room and a bar. They don’t serve food other than bar snacks, and boast a variety of unique and often local beer options that would be harder to find in bigger chains. The micropub relies on the quality of the ales served, so they often partner up with microbreweries, despite being independently owned. As their main focus is socialising, you won’t find any loud music or other distractions — it’s a place to meet up with your friends, sip on a pint and have a laugh. So, if you know your beer and are based in a friendly neighbourhood, a micropub might be the best option for you.
A gastropub is all about the food. Quality, delicious grub will be prepared and served in these pubs — it’s the art of taking the traditional greasy pub dishes and elevating them to an almost unrecognisable place, which is achieved by replacing the deep fryer and microwave with fresh ingredients and a decadent touch. Many gastropubs will have a chef-adorned menu and oftentimes change what they’re offering seasonally. Doing so, they possess a more refined atmosphere than your run-of-the-mill establishment. As to drinks, the pub will have a variety of beverages ranging from simple lagers to fancy wines and spirits. The point is to make everyone happy, whether they’re workers who come in for their lunch break or foodies who expect a polished experience. Opening a gastropub will be the perfect choice for anyone who appreciates good cooking.
Historically, a tavern and a pub were different in that the former was owned privately and the latter publicly (hence, pub — public house). Today, however, these terms are pretty much interchangeable. In other words, a tavern is what you imagine when you think of a traditional pub — a bustling meeting place that serves food and drink, welcomes both regulars and strangers, and maintains a warm atmosphere for everyone. These orthodox pubs are a great course of action if you want the familiarity of a micropub in a larger space while still offering food.
Find the right premises to lease
Once you’ve done your research and settled on a concept, you need to find the perfect premises. There are a few factors you should consider here, including size, whether you need a kitchen, and your location. This will depend on your target demographic, the health and zoning regulations in the regions you’re looking at (as different municipalities will have different rules), visibility, access, and the competition in the surrounding area. If you pick a busy street with lots of footfall, you may need to invest less in marketing than if you opt for a hidden alleyway, for example. But be careful: a road with seven different pubs may not be the best place for another.
Figure out what licensing you need
It may not be the most glamorous part of opening a pub, but obtaining the correct permits and licences is vital to your new venture’s success. In England and Wales, the main piece of legislation you will have to comply with is the Licensing Act 2003 (note that the laws are slightly different in Scotland and in Northern Ireland). You need to apply for a licence from your licensing authority, which is usually your local council, whose licensing committee will approve or deny your request. The Act also clarifies that you’ll require a designated premises supervisor (DPS) who holds a personal licence.
In other words, you must secure at least two licences — one for your premises and one for you (or any individual you trust enough to make your DPS). In order to achieve the personal license requirement, your DPS must be over 18, have the right to work in the UK, complete an approved training course, and pass a DBS check.
Have an understanding of your start-up costs
When you start thinking seriously about launching a pub, you need to ensure you have the funds to make it happen. To do this you must first draw up a business plan and estimate your turnover, as many of your start-up costs will depend on this. According to the British Beer and Pub Association, this would range from around £4,000 to £15,000 per week, depending on the type and size of your establishment. However, these are ballpark figures, so you should properly investigate and research your own potential turnover based on the relevant factors, such as your proposed menu prices, number of seats and competitiveness in the area.
This figure will help you focus your projected start-up costs in a few fields, some of which we’ve explored below. You should also take into account your equipment, insurance, licensing and staff when you calculate the sums. It is estimated that opening a pub will cost anywhere between £97,500 and £325,000, but we appreciate that this is a huge range — so here are some of these factors broken down.
When it comes to your premises, you can either choose to purchase a leasehold or freehold, or run a tenancy agreement. Sniff around your chosen area and see what the real estate market is like, whether you’re likely to find the type of agreement you’re looking for, and the likely costs. You should also take into account any tax such as business fees that may apply in certain regions but not in others. The average rent a pub pays in the UK rests between £30,000 and £50,000, however, some larger businesses could pay a significantly bigger sum, so it’s important to conduct your own market research around your area.
Beyond buying an actual bar (or refurbishing it if your premises are already equipped with one), there are many other tools, products and appliances that a pub needs. A refrigerator is necessary for your kegs, for example, while glasses, cutlery and dinnerware also cost money. Connecting with a point-of-sale (POS) is crucial for receiving payments, and a draught system is key for pouring beer. You may also want to invest in spirit dispensers to help your barpeople during peak hours. Make sure you create a list of all the equipment you’re going to need, and add up the costs. Realistically, these will not be less than £30,000, but can also get to double that if your pub is bigger or requires more appliances.
Insurance Costs & Covers
You cannot run a pub without covering yourself for accidents or other unfortunate events. This is why you’ll need to purchase insurance, which will include:
- Public liability insurance: This offers protection against any claims from customers and other members of the public who suffer injuries or illnesses as a direct result from your business — whether it’s an accident or not — as well as property damage.
- Employers liability insurance: As a pub owner, you’re going to hire staff, so employers liability insurance is legally required. It will help you if a staff member suffers an illness or injury while on the job.
- Business contents insurance: This policy will ensure that the cost of replacing or repairing any equipment or other items on your premises (including tables and chairs, for example) will be paid for in the case of loss, damage or theft.
It’s also a good idea to invest in a targeted insurance policy to protect your pub, as it will guarantee that anything that needs to be covered is fully insured.
- Pub Insurance : Our pub insurance is tailored towards your business and will cover all the basics, as well as your personal business requirements. Common covers include loss of licence, stock insurance and employee theft insurance, for example.
Licence fees are usually not high enough to deter you from opening your pub, however, it’s important to take them into account when assessing your overall costs. Your premises licence will vary in price from £100 to £1,905 depending on the fee band of your venue. The personal licence for your DPS will cost £37.
How many employees you’ll have on the payroll and what roles they’ll perform is up to you, but it is recommended that you consider at least six months of their wages to be part of your start-up costs. This will add up to about £32,500 to £48,750 on average, but it’s better to calculate this based on your individual needs.
Source liquor suppliers
Everything is in order, and all you need to do now is find a liquor supplier. Make a list of the drinks you want to have in your bar, be it spirits, beers or wines, before finding a supplier that works with the brands you want. You should also investigate whether there are any local microbreweries that you’d like to give a go to. When you talk to distributors and peruse their portfolios, you should consider their brand selection, minimum purchase requirements, terms and discounts, delivery speed and dates, and the availability of promotional materials. Some wholesalers will provide training for your barpeople, for example. Once you have this set, don’t forget to keep an inventory and ensure it’s always stocked up.
And that’s it — you’re all set. The last thing you have left to do is to open your doors and start getting those parched customers in. Good luck!