How to Start Your Own Pub Business

Running a pub is a dream vocation for many, who love the idea of being part of something that’s often at the heart of a community. Many people outside the industry may think that just involves happily chatting with locals on a Friday night – but that’s far from reality. This is a career where you need to wear many hats, including manager, finance director, marketing expert, and HR manager, as well as front-of-house duties.

But despite the challenges, can be an extremely rewarding career for many. If you’re thinking of entering the industry, here’s our guide on how to get started.

Location, Location, Location…

We think there are three types of locations to choose between – country pubs, suburban pubs, and city pubs. Each has its own challenges and opportunities.

Chat to landlords in each of the locations to get a feel of what’s right for you. Once you’ve narrowed down your location, research the surrounding area, demographics, and earnings of the locals, foot traffic, and look at your competitors.

Tenancy, Leasehold or Freehold?

There are three options when it comes to running a pub

1. Tenancy: The most common option and may be the easiest way in if this is your first pub. Most tenancies last for three years, giving you time to see if you’re cut out for the trade without making a serious commitment.

2. Leasehold: This involves a longer commitment, usually 10 to 25 years. You generally require greater start-up costs, but may be able to sell on the lease for a profit.

3. Freehold: This is one for the real entrepreneurs. You own the pub, and you have ultimate responsibility including managing your finances and suppliers, obtaining and maintaining fixtures and fittings, and the welfare of your employees and customers. (1)

Costs

Costs will usually vary depending on the type of running arrangement you have. Tenancies can cost between £15,000 and £50,000, whereas a leasehold usually  begins at £50,000 but can rise steeply depending on the previous success of the pub. A freehold is usually the most expensive option as it includes the building’s value, plus fixtures and fittings. This can range from around £60,000 but typically starts at £120,000. (2)

The British Beer and Pub Association has produced a useful report on running costs that gives a breakdown according to the location and type of pub. (3)

Insurance

Business insurance is a legal necessity, and essential to help protect your investment.

Pub insurance is a specialist field therefore it’s advisable to ensure you know what cover you need, and have the appropriate insurance in place to help protect you. This is where an insurance broker specialising in pub insurance should be able to help – you can seek their advice and discuss options to ensure you have adequate cover for your requirements. The type and level of cover will normally depend on the type of pub ownership you have and may include insurance requirements for public liability, employers liability, buildings and contents, money, loss of licence, and business interruption.

Rules and Regulations

To run a pub, you need two types of licence: a premises licence (4) and a personal licence (5), both of which come from your local authority.

If you’re new to the trade, you’ll also require training. Landlords often run training for those taking on a tenancy or leasehold, and the British Institute of Innkeeping has a number of useful qualifications. (6)

Marketing

Once your pub is ready to go, you need to ensure you have enough customers to keep your business thriving, which is why pub landlords need to have an understanding of marketing or know who they need to speak to for professional assistance.

If you’ve got a website, make sure it’s well designed and informative, use social media to connect with your local community, and consider whether paid advertising in local media is right for you. Make use of posters and signs outside, and repeat business and recommendations are often invaluable, therefore ensure each customer is welcomed with a smile and excellent service.

 

Sources:

1 & 2. http://howtorunapub.co.uk/guide-to-buying-a-pub/

3. http://www.beerandpub.com/industry-briefings/running-a-pub-information-for-prospective-tenants-lessees

4. https://www.gov.uk/premises-licence

5. https://www.gov.uk/personal-licence-to-sell-alcohol

6. http://biiab.bii.org/qualifications

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