Interested in running a pub for the first time? It’s a great way to work for yourself, it's not easy and there are stacks of pitfalls, but there are opportunities out there and with hard work and dedication, can be very rewarding.
But there are a few things you need to know to get started. Here, we’ve put together a step-by-step a few things that will guide you on your way.
- Choose between freehold, leasehold, and tenancy. Choosing the legal basis for your pub is a key concern – you’ll need to choose between freehold, leasehold, and tenancy, and tied or free of tied.
Many pub companies now have a variety of pub contracts to suit individuals who are looking to lease a pub. Contracts have been changes recently to fit the budgets of those who want a low ingoing investment, and those who have a bit more cash to put down.
The contracts usually are based on tied for products or not, fully repairing or part, and are normally based on how much you invest at the start.
- Get trained. If you’re running a pub for the first time, you need to think about training.
- Think about legal compliance. There’s a range of legal obligations you’ll need to fulfil when running a pub.
- Recruit staff. Great pubs need great staff. Learn where and how to recruit.
- Think about stock. You’ll need something to sell! Build your menu and find suppliers.
- Develop your business. Feeling ambitious? Take some steps to build your business further.
Check out more details on each point below.
How to start a pub business
- Choose between freehold, leasehold, and tenancy
There are three ways in which you might run a pub. In a freehold, you will own the pub outright and you might purchase this through cash or a mortgage or both. There are hundreds of pubs available in this way, from city centre to country pubs, it just depends on the lifestyle you are looking for. Try visiting Fleurets who we find very good to view listings or Christie and Co Both and some others also list pubs for lease.
However, freehold pub owners can generally negotiate good discounts with suppliers, get retro payments from brand suppliers, or even get cash, product or point of sale just for stocking certain brands.
In a leasehold, you take on the right to occupy the pub for a fixed term. A lease might be created by a landlord such as a brewery or could be sold or assigned by another pub owner. The pub is sold as a going concern.
Many pub companies and breweries in the UK offer these and can be picked up with little ingoing, normally fixtures and fitting and or stock at hand.
In a tenancy agreement, you assume the right to occupy the pub for a short-term period. However, the tenancy may roll over under the Landlord and Tenancy Act. Under a tenancy, you can’t reassign the right to occupy – so you can’t ‘sublet’ your pub.
You’ll also need to think about the ‘tie’. In a pub that is free of tie, you are able to choose which suppliers you deal with. In a tied arrangement, you have to buy from a specific brewer or pubco (a company that owns a chain of pubs).
This again will depend on your ingoing payment as.
Freehold pubs are generally free of tie.
This is taken from Marsden’s website and is an example of an agreement.
- A rent-free, five-year agreement
- The retailer takes home between 20% and 25% of total weekly turnover
- Stock supplied by Marston's, and Marston's covers the cost of utility bills, repairs and F&F
- Extensive support package provided, including tried and tested menus and access to our beer portfolio
- Run a great business at the same time as being part of a local community
The retail agreement is ideal for someone looking to run their own pub business for a small ingoing fee.
Our retailers don’t pay any rent, and we’ll sort the majority of the bills (for example, rates, utilities and property insurance). We’ll provide your stock, fixtures and fittings and till systems, and give you marketing materials to help you promote the business.
The benefit of this is that it takes away a lot of the hassle, leaving you to focus on driving the business and maximising your earning potential. Our retailers’ income is based on a percentage of the pub’s weekly sales, so the more they grow the business, the more they can earn. The percentage varies from 20 to 25%, depending on the pub and the offer.
We have different types of pubs available on our retail agreement. They range from heart of the community wet led pubs to food led destination sites. We even have a number of town centre venues too. If you take on a pub with a Marston’s food offer, you’ll be given a menu to work to and all the equipment you need.
If you like the low investment and high level of support offered by our retail agreement, but are looking for the freedom you get from taking on a tenancy, then take a look at our foundation agreement too.
What companies are there?
There are loads of pub companies and breweries in the UK and we've put together some of them below. This is not an exhaustive list and you should search google and find more. There are many small pub companies that may well have better deals for you and like any other business, research should be thorough.
EI Group, use to be Enterprise
- Getting trained for the Job
If you’re running a pub for the first time, you may need to take some training. You’ll certainly need a personal license, along with several other certificates for things like food hygiene and health and safety. If you’re leasing from a pubco, they might also require you to complete other, more specific training.
As far as the Personal Licence is concerned you can choose to take an all-day training course or sit the course and the exam at home in your own time. This is how 1 in 10 of every licence is taken in the UK and is offered only by the National Hospitality Academy. You can find out more information here
Training in Food Hygiene and a series of other relevant courses can also be accessed here at a discount
You might want to think about a training platform for your staff, which will save you time and effort in training staff as you go along. There are deals from the Hospitality Academy and you can find out more here Seethe video here
- Think about legal compliance
In addition to legal requirements like health and safety training and personal licenses, you should also consider risk assessments, insurance, food hygiene ratings, cleaning schedules employment law, staff pay and liabilities, vat, PAYE, staff handbooks, Human resources.
The Hospitality Academy carry all of that information and can guide you in easily setting this up for you. See inductions here
- Recruit staff
A pub is only as good as its staff. You need to know where to hire the right people – and, crucially, the skillsets that you require.
Many staff will be part time and probably have other jobs or university commitments.
Training is an absolute must. Not only do trained staff look and act more professionally in your business, but trained staff are proven to add money to your bottom line just through knowing your product and how to up and cross sell.
- Think about stock
Stock is a key consideration for any pub owner. If you’re in a tied pub, you’ll be required to buy from the relevant brewer or pubco. However, if you’re free of tie, you may be able to negotiate good discounts with suppliers. Freehold pub owners can generally negotiate good discounts with suppliers, get retro payments from brand suppliers, or even get cash, product or point of sale just for stocking certain brands.
If you have the freedom to choose suppliers, remember that the quality of what you’re selling is one of the most important factors in a pub’s success.
If you’re serving food, try to make sure that you’re using the best produce your margins can bear, and for drinks, make sure that you’re offering an exciting, balanced series of options – and don’t leave out non-drinkers!
We have training available for new pub owners who want to learn how to build their business. Call the Hospitality Academy to find out more 02035442211
- Develop your business
Finally, once you’re on your feet, you might want to start thinking about developing your business further. Whether this involves taking on new pubs or expanding an existing one, there’s plenty of options. Whether you’re running pub quizzes or booking events in the back room of your existing venue or exploring the local chain model perfected by groups like London’s Antic Pubs, there’s a huge range of ways in which you can develop your pub and its brand.
Learning about Social media is a must. Whist you may or may not like social media, a business can gain a whole lot of free marketing through your customers sharing social media content about your business. We can provide training on Social Media so you can get the best out the marketing it provides.