Running a pub represents one of the most rewarding business ventures in UK hospitality. In the UK, we love our pubs, so much in fact we have around 40,000 of them. This social venture attracts small business owners who want to get involved with their local community AND run a business. If this is you, then we can help you get started. Whether you want to set up a local, a microbrewery, or a franchise with no experience – keep on reading.

In this guide, we cover how much it costs to open a pub, the licences you need, the 2026/27 business rates relief for pubs, and the insurance to consider. We also share tips from a real London landlord.

_{This content is provided for general informational purposes only and does not constitute tax, legal, or financial advice. You should not rely on it as a substitute for professional advice. Always seek independent advice from a qualified professional regarding your specific circumstances.}

Guide breakdown

• How do I set up a pub? The key steps
• How much money do I need to start and run a pub?
  • Start-up costs
  • Monthly running costs
  • Writing a business plan
  • Business rates, insurance, energy and equipment
• What legal requirements do I need to know about?
  • Licences
  • Health and safety
  • Employment and VAT
• Should I choose a tenancy, lease or freehold?
• How can I make my pub attract customers and make money?
• What are the biggest challenges and how can I overcome them?
• FAQs

How do I set up a pub? Key steps to follow

From idea to opening night, it can take several months to years of planning, so it’s best to start early. Consider following these steps below:

1. Choose your pub model – a tenancy, lease, freehold or managed house (more on that below)
2. Write a business plan – with a cash flow forecast and 3 to 6 months of working capital
3. Find and check your premises – check local competition, condition of your property and its licensing history.
4. Sort your licences – You’ll need a premises licence for the building and a personal licence for selling alcohol.
5. Register for tax and set up as an employer – including VAT if your turnover goes over £90,000
6. Consider arranging business essentials – insurance, energy, broadband and card payments systems
7. Hire and train your team – including responsible alcohol sales and food hygiene. Here’s how to manage staff.
8. Launch and market your pub – online, in your community and through regular events

Feeling overwhelmed? Not to worry, we’ve broken down each step below so you can take it step by step and feel more confident during the set up phase!

How much money do I need to start and run a pub?

The first thing on your mind when thinking of setting up a pub is likely – how much is it going to cost? Starting up any business needs an upfront investment and an ongoing financial commitment.

It's a good idea to get to grips with understanding these costs to help you plan. Consider everything from the first bits of paperwork to the pub opening, while avoiding any common cash flow problems from those who have done it before.

What are the start up costs?

Most pub tenancies require a bit of a hefty deposit, and this can be from around £20,000 for a tenancy to thousands more, depending on the property size. Your initial deposit secures your tenancy agreement and covers initial setup costs. But that's not all to think about, you'll need working capital to cover the first few months of operations while you get your name out there and build up your customer base.

If you want to buy a pub outright, this is a much larger investment. It can typically range from £200,000 to more than £1 million, depending on your location and the condition of the property

For example, a rundown pub in need of refurbishment could cost you around £40,000 if you want a project in the Midlands. In Greater London, you could be looking at over £1,000,000 for a pub in decent condition.

Although you'd own the pub outright, it's also more of a riskier approach.*

_{*This information is for educational purposes only. Bionic does not give financial advice. Always consult your own financial advisor for financial advice.}

How much does it cost to run a pub each month?

You haven’t just got start-up costs, but monthly running costs to keep your pub running and these can depend on your size, location and whether you serve food. Before you sign anything, it’s a good idea to consider building a monthly budget that covers:

• Rent or mortgage repayments
• Staff wages, National Insurance and pension contributions
• Drink and food stock
• Gas, electricity and water bills
• Business rates
• Business insurance
• Music and TV licences
• Card payment fees, your till system and waste collection
• Repairs, cellar maintenance and cleaning

If you employ staff aged 21 and over, the National Living Wage rose to £12.71 an hour in April, 2026. Wages can be a big monthly costs, so you should build this into your monthly running costs. The National Living Wage (NLW), will rise by 3.9 per cent to £13.21 in April, 2027.

Pub business rates

One of the biggest expenses is likely to be business rates. Business rates are a tax on property used for business purposes, including pubs.

They are calculated by using a multiplier. The rateable value of your business property is multiplied by this number to give you your final bill.

As of April 2026, the government’s Business Rate Relief Scheme that helped with these costs, was replaced. Instead, qualifying hospitality businesses in England with a rateable value under £500,000 now pay permanently lower business rates multipliers. On top of this, eligible pubs in England can get a 15% pubs and live music venues relief for 2026-27. The government suggests these will then be frozen in real terms for 2027-28 and 2028-29.

To qualify for the 15% pubs relief, your pub needs to meet some conditions:

• Be open to the general public
• Allow free entry, other than for occasional entertainment
• Allow drinking without customers having to eat
• Let customers buy drinks at a bar

Many councils apply the relief automatically. If it's not on your 2026-27 bill, contact your local council. Rules differ in Scotland, Wales and Northern Ireland, so check with your local council.

You can check out the government website for more information on business rates.

Insurance costs

The right insurance cover is essential if you serve customers daily. You can sort this up to 30 days before you open to avoid being underinsured when you start trading.

But what insurance do you need?

Employers' liability insurance is a legal requirement if you have any employees, but there are other covers to consider like business equipment, stock and contents to protect your business operations.

A pub insurance policy can bring several cover types together on one policy. Policies vary by provider, so always check what's included and excluded. Bionic can help you arrange this.

Energy costs

Once you've moved into your premises, you'll need to sort out a commercial energy contract for your pub. You'll want to think about what type of contract you want to opt for as these differ from domestic contracts. See the latest business energy rates

You'll also want your pub to run as energy efficiently as possible, to avoid high usage and expensive bills. Think about energy-efficient lighting and equipment – especially if you plan on serving food. Plan your start-up and switch-off times from the get-go.

Equipment and setup expenses

You'll need to get your key equipment sorted before you open up. Your bar equipment can quickly add up, so where you can, you might want consider second hand equipment. Here's an example of what you might need:

Equipment	Costs	Second hand options
Bar EPOS System	From £19 - Square - Good for bars. From £79 - Lightspeed - Customisable. From £29 - Zettle – Good value	You may be able to find used systems on eBay
Commercial kitchen equipment (if you want to serve food)	A basic setup can cost between £10,000 and £20,000 for commercial fridges, sinks and grills. For a fully kitted out kitchen you could expect to pay around £50,000	Caterquip offer tested second-hand commercial kitchen gear, often at a large discount.
Cellar coolers and racks	From £480 - Fridge Freezer Direct - Bottle cooler. From £1,525 - Carlton Services - Cellar Coolers	Try Gumtree, Second Hand Pub Equipment and eBay for used items.
Bar furniture	From around £100 - Andy Thornton - New, stylish furniture	City Furniture Clearance have a good selection or try Facebook marketplace
Glassware & Barware	From £2.99 – Garage Bar - Branded beer glasses. From £2.95 - Drinkstuff - Wine glasses	Find second hand pint glasses and more on secondhand-catering-equipment.co.uk
Lighting and Decor	From £25 - Industville – Industrial style lighting. From £108 - Fritz Fryer – Stylish hanging lighting	Combine new lighting with vintage decor found via used pub fitters or eBay.

Are there any legal requirements I need to be aware of?

Operating a pub legally requires multiple licenses and you need to comply with regulations, read on.

Sorting licences

Every pub that sells alcohol needs a premises licence. You apply through your local council. Your licence sets out when you can sell alcohol, what entertainment you can offer and any conditions, like capacity limits.

You'll also need a personal licence, which costs £37 to apply for. To get one, you'll need to be 18 or over and have the right to work in the UK. Using a simple form on the government site, you can apply for this.

What is a Designated Premises Supervisor (DPS)?

A Designated Premises Supervisor (DPS) is the named person in charge of alcohol sales at your pub. They need to hold a personal licence and are named on your premises licence. Many landlords take this role themselves, you might too!

Learn more about which businesses licenses you need for a pub.

Health and safety regulations

You don't need a licence for health and safety. But if you serve food, you'll need to register your food business with your local authority at least 28 days before you open. You also need to train your staff, giving proper food safety training.

Employment and VAT

If your business exceeds an annual turnover of VAT £90,000 – you need to register for VAT. While you're under this amount, you can still register for VAT, but it's not mandatory.

When it comes to employees, you'll need to follow employment law. This includes getting your ERN number, paying at least the minimum wage and sorting out pension auto-enrolment for eligible staff. Learn how to manage staff.

Should I choose a tenancy, lease, or freehold premises?

When it comes to choosing how to set up your pub – the choice you make can really impact the freedom you have to run your pub. Each option has its benefits and drawbacks. Let's take a look.

Brewery tenancy agreements

Sometimes cause tied agreements, brewery tenancy agreements are common with major brewery groups. These agreements typically mean it's easier to invest, but you have limited choice of beer suppliers. In some cases, tenants must buy the beer and cider and other types of alcohol from the brewery who owns the property.

These types of tenancy agreements usually run up to 5 years, with break clauses allowing tenants to end the agreement under certain circumstances. Companies like Fullers, Star Pubs and Joules offer these.

Leasehold pubs

A leasehold pub can offer greater freedom on how you want to run your pub, but it comes at a bit more of a price. Think of it like renting, like you would a flat - its yours to run, but you can't normally redecorate. You'll typically pay market rent plus other fixed costs like business rates, insurance, as well as maintenance costs to keep your pub in top shape.

Many leases from pub companies are still tied, so check the agreement carefully. With a free-of-tie lease, you'll likely have more supplier freedom, so you can get in the brands you want, including smaller, independent breweries.

Freehold ownership

When you own a pub outright – this is a freehold ownership. Freehold ownership gives you complete control over running your pub. You can choose the suppliers you want, without going to a landlord for approval. The main downside is you need a lot of money to buy a pub outright and it can be a risky venture when you're just starting out.

If you have the cash but you're not sure. It might be a good idea to start with a tenancy agreement or lease first and grow your business before you decide to purchase a pub outright.

Managed houses

In a managed house, a pub company pays you a salary to run one of its pubs. The company owns the business and takes most of the financial risk. You get less freedom, but it can be a good way to learn the trade before you take on your own pub.

Tenancy, lease, freehold or managed house – at a glance

Model	What you own	Upfront cost	Supplier choice	Best for
Tenancy (tied)	The right to trade, often for around 5 years	Lowest – deposits from around £20,000	Usually tied to the pub company	First-time landlords who want support
Leasehold	The business, but not the building	Medium	Often tied, but free-of-tie leases exist	People with some trade experience
Freehold	The building and the business	Highest – often £200,000 to £1 million+	Full freedom	Experienced operators with funding
Managed house	Nothing – you're paid a salary	Very low	Set by the pub company	Learning the trade with low risk

How can I make sure my pub attracts customers and makes money?

Let's be honest, you need a profitable pub to be successful. And this depends on how you run it, train your staff, and the space and community you create.

Kate, owner of The Old Ivy House in London, told us “To draw people in, we initially decided to try a comedy show, so we sourced a comedian who curated our nights for us. We did that for about six months, and it was great to begin with, we were getting a full pub on a Saturday night,” Kate explains, “but then towards the end, when we'd become a bit more popular anyway, we were essentially kicking out locals so other customers with tickets could come in. So, we decided to move on from the comedy. But we always come up with different ideas,”. Read Kate's full customer story.

Reddit users who run local pubs share more tips on how to run a pub successfully:

1. Find a gap in the local market – you'll want to stand out against longstanding competitors as it's going to be hard to steal business
2. Make your customers feel safe – have a zero-tolerance stance on drugs and violence, so customers of all ages feel safe. Also, keep the place clean
3. Make your pub a hub for locals – Get involved with the local community, host regular quiz nights, music nights and social events.
4. Hire friendly staff to get to know regulars – Your employees are your greatest asset, hire an attentive, professional team that give something back to your regulars.

And arguably the most important of all...

Understand the financial reality

Many Reddit users advise that running a pub is tougher than it seems – your heart really needs to be in it as financial risks can be high.

In fact, pubs have been declining in the UK since the 00's for several economic and cultural reasons. Learn more in our pub report.

British Beer and Pub Association (BBPA) says expects around 360 closures by the end of the year, or about one pub a day. That's why a realistic plan and a cash buffer matter.

The drink vs food balance

When it comes to what you offer your punters – you need to get the balance right.

Most pubs offer snacks like crisps and nuts, but if you want to offer food – this requires even more of an investment and a thought-out strategy.

It might be a good idea to start with bar snacks, before you opt for a full-blown menu, so you can gauge interest from your customers and avoid waste.

Selling food could bring in extra income and attract customers during quieter periods. But you'll need to kit out your kitchen with fryers, fridges and other costly equipment, plus extra kitchen staff. So think it through carefully.

You'll also need to think about the additional insurance for running a kitchen and the risks that come with it, as well as higher energy consumption which can start to rack up your bills.

Learn more about how to price your products.

Getting the pint price right

What will you charge against your competitors? The right pricing should keep you profitable and keep customers happy.

A good way to start with pricing is working out your ‘pour cost'.

Imagine a drink you sell for £10. If the ingredients use to make that drink cost you £2, then your pour cost would be 20% (£2 / £10 = 0.20, or 20%)

Pour costs are a good way to track if you're pints are profitable. A lower pour cost generally means a higher profit margin for your drinks.

When it comes to pricing pints, find out what competitors charge in your area, so your prices stay competitive. We went out on the streets to see what people had to say about the price of a pint in the UK, watch now to help with some research.

Online marketing and community

No one wants an empty pub – to get punters in and coming back it's essential to have an online presence. We’ve got some tips below:

Make sure you have a page on all major social media platforms, ensure you have a website with your opening times and an updated menu with all allergens listed (if you sell food). These days, it's the norm to check the menu before you go and eat anywhere – even pubs.

Claim your free Google Business Profile, too. Add photos, opening times and your menu, and reply to reviews. This helps people find you when they search for a pub nearby.

To get your marketing off the ground – invite people with influence, creators who run lifestyle, drinks or food pages on social media. You could even hold a launch party.

Partner with local businesses, sports clubs, and community groups to establish your pub as a neighbourhood hub and get the word out that you're open!

Word-of-mouth is one of the most powerful marketing tools in the pub industry. Focus on consistently excellent service, quality products, and creating memorable experiences that customers will go and tell their friends and family about.

Train your staff to meet standards

Opening weeks can be tricky in hospitality so to avoid any mishaps, ensure you train your staff before they start. Make sure they have product knowledge, good customer service and know how to deal with busy periods.

Create clear procedures for handling difficult situations, including drunk customers, disputes and emergencies. Train your team to check ID and refuse service politely, in line with your premises licence. Well-trained staff become brand ambassadors who help build your pub's reputation and who genuinely contribute to your pub's success.

Last but not least, pay them well and treat them fairly to reduce the likelihood of staff turnover.

What are the biggest challenges and how can I overcome them?

Challenges are common in any business, pubs no exception. Understanding these could mean you're more prepared if they do arise.

Rising costs and financial pressures

Energy costs have been anything but steady over the last few years. Be ready for price changes, as there is limited government support to help businesses pay energy bills.

Inflation and supply chain problems can affect the prices your suppliers set. Review your prices and supplier costs regularly to stay profitable.

Monitor cash flow carefully, especially in quieter winter months, when heating costs peak and customer numbers often drop. Keep enough working capital to handle surprise costs or slow weeks – aim for at least 3 months

Recruitment can be difficult

The hospitality industry has been facing some ongoing recruitment challenges, with competition for finding quality staff to the rising costs of employing young people.

To set yourself apart from competitors, try to offer flexible working patterns and genuine training opportunities and great working conditions, even if you can't afford to pay them more than minimum wage.

Even considering workplace health insurance schemes like Vitality at work can be a great benefit for your team and don't have to cost you the earth. Think about offering free food and discount for friends and family as well to make them feel valued.

If you're struggling to find staff, consider apprenticeship schemes and partnerships with local colleges to give young talent a chance.

Changing consumer habits

More people are choosing to drink less, or not at all, for health or personal reasons. This is often called being ‘sober curious'. Being sober is becoming more socially acceptable, so instead of alienating these customers, consider offering a good range of alcohol-free and low-alcohol drinks, including 0% beer on draught if you can.

People deciding to ‘stay in' is also challenging for traditional pubs. Try to offer experiences that are unavailable at home like live entertainment, quality food, and community atmosphere that is inviting for friends and family to plan a day/evening out.

Planning for seasonal dips

Pubs can be a seasonal business, with summer normally generating peak revenue than winter periods – but that doesn't mean you can't brand your pub for summer and cosy winter nights.

Build relationships with local event organisers, wedding planners, and corporate clients to help generate more revenue during quieter periods.

Advertising private hire can also provide another income stream.

Get your pub on its feet with help from Bionic

Ready to launch your pub business? At Bionic, we're here to help with your business essentials like energy, insurance, broadband and finance. Our UK-based, knowledgeable team are on-hand to talk through your options. Get in touch by starting a quote online today.  

Or read more on business essentials from learning about tax returns to making staff redundant when times get tough. 

Pub FAQs

Can I run a pub with no experience?

Yes, you can run a pub with no experience, but training helps. Some first-time landlords start with a tenancy, as pub companies often offer training and a regional manager for support. A managed house is another way to learn the trade with less pressure from the get-go.

How long does it take to open a pub?

Opening a pub can take several months, depending on funding, refurbishment and licensing. Taking over a pub that already has a premises licence is often quicker than starting from scratch.

Do I need planning permission to open a pub?

You may need planning permission if the building wasn't used as a pub or bar before. This is called a change of use. Check with your local planning authority before you sign a lease or buy the property.

Can I sell food in my pub without registering?

No. If you prepare, serve, store, handle or sell food, you'll need to register as a food business with your local council at least 28 days before you start. Registration is free.

Do pubs get business rates relief in 2026?

Yes. In England, eligible pubs can get 15% off their business rates bills for 2026/27, on top of lower business rates multipliers for qualifying hospitality properties with a rateable value under £500,000. Bills are set to be frozen for two more years. Many councils will apply the relief automatically.

What's the difference between a tied pub and a free house?

A ‘tied pub’ has to buy some or all of its drinks from the pub company or brewery that owns it. A free house can buy from any supplier. Tied pubs often cost less to take on, while free houses can give you more control over what you stock and prices.