How to Run a Pub

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

Setting up Your Own Pub

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.

Location and Type of Pub

Start by considering the type of pub that best 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? Will you be happiest in a rural location, a town with lots of regulars, or a bustling city bar where you’ll meet lots of new faces?

Chat to landlords in different locations to get a feel of what’s right for you. Once you’ve narrowed down your location, research the surrounding area, demographics and foot traffic, and look at how many other pubs are in the area too.

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 usually at least a three-year commitment and costs between £20,000 and £50,000 to get started.¹ You may also be able to get a tenancy to run a pub for a brewery.

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.² It costs anything from £50,000 to £250,000 to buy the lease.² If you want to find out more about running a pub for a brewery click here.

If you choose to go for freehold, 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 could range from £120,000 to £3 million for a prime city spot.¹

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

Marketing

You also need to think about 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. Don’t forget to network locally with other business owners and local chambers of commerce.

What do You Need to Run a Pub?

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,⁴ while the landlord needs a personal licence,⁵ for which he or she needs appropriate qualifications and a DBS criminal records check. Please be aware that the following information is relevant to England and Wales, and may differ for those based in Northern Ireland and Scotland. You can visit your local authority via the Gov.UK site.⁶

How to Get a Pub Licence

Personal Licence

You must have someone on the premises with a personal licence in order to sell alcohol. This person will be named the Designated Premises Supervisor (DSP), and will be able to act as a valid DSP for any venue with a premises licence.⁵ Before applying for a personal licence you must understand the Licensing Act of 2003 and hold a relevant licensing qualification, such as the NIIA level 2 Award for Personal Licence Holders. There is a list of accredited qualifications here.

Through these qualifications you should be able to demonstrate that you are of a good character and can sell alcohol responsibly. You should also be able to demonstrate understanding your responsibility with regards to the protection of children and the prevention of public nuisance, and of crime and disorder.⁵ You will need to let the licensing authority know if your name or address changes, or if you are convicted of any “relevant offences”, including serious crime, drugs or sex offences.⁵

Premises Licence

You’ll also need a premises licence which authorises you to sell alcohol and perform other licensed activities, such as public entertainment and selling hot food and drinks after 5pm, from your venue.⁴ You’ll need to be, or have appointed, a DPS in order to apply for the premises licence. However, if you’re buying the pub from someone else then they may transfer their licence to you.

You’ll need to provide your details, as well as details of the Designated Premises Supervisor (if different), a detailed plan of the premises and a schedule outlining what time licensed activities will occur.⁴

You must display your licence where it can be seen, and if you fail to produce it upon request you may be fined £1,000. To apply for either licence you must be over the age of 18 and able to prove that you’re eligible to live and work in the UK. Your licence will remain valid unless revoked, or unless otherwise specified.⁴

How Much is a Pub Licence?

Personal licences cost £37 and must be held by someone with responsibility for the day-to-day running of your business. The cost of a premises licence will depend on the type of venue, but ranges between £100 and £1,905, and there is a yearly fee.⁴

Pub Insurance

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 insurance, but if you opt for a tenancy or leasehold, the property owner may cover this.

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 arranging pub insurance should be able to help – you can seek their advice and discuss options to ensure you have adequate cover for your requirements.

How Much Does Pub Insurance Cost?

The cost of your pub insurance will depend upon the level of insurance you need, and the various covers you take out, like the ones described above. The business model you choose will also have an impact as you may need more or less covers which could change the total amount you need to pay. Speak to an insurance provider or broker who can help you understand your needs and get you the right level of cover for you circumstances.

<sub>Sources
1. startups.co.uk/how-to-start-a-pub
2. howtorunapub.co.uk/guide-to-buying-a-pub
3. beerandpub.com/running-a-pub-information-for-prospective-tenants-lessees
4. gov.uk/premises-licence
5. gov.uk/alcohol-licensing#personal-licence
6. gov.uk/alcohol-licence-your-area</sub>