All You Need to Know About Setting Up a Pub Business

Pub culture is such a large, familiar part of British tradition, it’s often a dream vocation for some. But whether you dream of presiding over a cosy country pub, a buzzing city bar, or an urban gastropub, there’s a lot to consider before your dream becomes a reality.

If you’re dreaming of life as a pub landlord, here’s an overview of what you need to know.

Location and Type of Pub

Start by considering the type of pub that most suits your personality. Would you prefer a traditional drinking pub, or one that specialises in cask ales? Do you enjoy sports and entertainment venues, or would you like the space to run functions? Are you going to serve food, or step it up a notch with a fine dining establishment?

Think also about the location – are you happiest in a rural location, a town with lots of regulars, or a bustling city bar where you’ll meet lots of new faces?

Business Model and Costs

There are three main types of business models, with varying levels of start-up costs.

If you’ve never run a pub before, don’t run before you can walk! A tenancy is a three-year commitment and costs between £15,000 and £50,000 to get started.

Leasehold is the most popular option. Like a tenancy, a brewery or pub company owns the pub, but it’s a longer commitment – generally between 10 and 25 years. It costs anything from £50,000 to £250,000 to buy the lease.

Finally one for the “pros”: freehold. Essentially, this means you’re on your own with regards to owning the building and making all decisions relating to suppliers, and fixtures and fittings. Your initial investment ranges from £60,000 to £1.5 million for a prime city spot(1).


Before you can throw open your doors and start serving customers, you need two licences.

A premises licence is required to sell alcohol and provide entertainment(2), while the landlord needs a personal licence(3), for which he or she needs appropriate qualifications and a DBS criminal records check.


All landlords are legally obliged to hold adequate pub business insurance, but your requirements will vary depending on your business model. As a general rule you should have cover for public and products liability, employers liability, contents, business interruption, and for money on the premises, including in a safe and en route to the bank. All freehold owners also need building cover, but if you opt for a tenancy or leasehold, the property owner may cover this.


Finally, you need to consider how to entice customers through your doors. Devise a marketing plan with a mixture of different methods to maximise your reach. This could include setting up a website, advertising in local media, holding special promotions – such as two for one, happy hour or meal deals – and announcing them on the noticeboards outside the pub and networking locally with other business owners and local chambers of commerce.



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