How to run a pub successfully: guide for landlords

There are around 41,700 pubs and bars trading in the UK, and about one closes every day. Running a pub is tougher than most people think. Wages, rent, stock and bills add up fast, and cash gets tight in the first year. This guide is for new landlords in their first six months, or anyone about to take a pub on. It covers what the job really involves, the licences you need, typical monthly costs, and the traps that catch new owners out. By the end, you should know if you can run a pub and what to sort out first.

This article is general information, not legal or financial advice. It focuses on England and Wales, where most UK pubs trade. Rules differ in Scotland and Northern Ireland, and your own setup will shape what applies to you. Check the official sources linked below and talk to a professional adviser for anything specific.

Key takeaways

• Most pubs in England and Wales that sell alcohol need two things in place: a premises licence for the building, and a Designated Premises Supervisor (DPS) who holds a personal licence. Members' clubs follow different rules.
• Monthly running costs can sit anywhere from around £15,000 to £40,000 for a small to mid-sized pub. Your own numbers will vary.
• Cashflow is the main reason new pubs struggle. Keep business and personal money apart from day one.
• A personal licence costs £37 to apply for, plus the APLH Level 2 course, which is often £150 to £200.
• Food, music and cash handling each bring more sign-ups or checks. Plan time for these before you open.

What does it mean to run a pub in the UK?

"Running a pub" can broadly mean four different things. Your costs, risks and workload all shift based on which one you pick.

Tenant (tied pub). You rent the pub from a pub company (a "pubco"). The deal is usually "tied", which means you have to buy beer (and often other stock) through them. Rent and start-up costs are lower than other routes. Margins on drinks are tighter because of the tie.

Leaseholder. You take on a longer lease, often 10 to 20 years. This gives you more control over the site and sometimes more freedom on where to buy stock. It also means a bigger up-front cost and a longer commitment.

Freeholder. You own the building. You can buy stock on the open market, which gives you better margins and more choice on suppliers. Up-front costs are much higher, and you carry all the property risk.

Managed house. A pub chain pays you a salary to run the site. The chain takes the risk and keeps the profit. You get a salary plus bonuses. This is closer to a job than running your own business.

Before you sign any deal, ask a solicitor to review it. Pay close attention to the small print on rent reviews, tied purchases and how to exit. Tied purchases are the products you must buy from the pubco, and at what price. 

What licences do you need to run a pub?

Pub licensing is one of the things new landlords underestimate. Here is an overview of the main licences to think about. Rules, fees and forms change, and they also vary by council and by site, so check the official sources linked below before you apply.

Premises licence

A premises licence lets you sell alcohol at a specific site. It often covers late-night food and regulated entertainment such as live music too. You apply through the local council where the pub sits. The council runs a formal consultation, during which residents, the police and other bodies can object.

Fees are set on a sliding scale based on the rateable value of the pub. Pubs where alcohol is the main trade pay more. Check the current fee with your local council.

Some members' clubs use a club premises certificate instead, which has different rules. If that might be you, speak to a licensing adviser.

Personal licence and DPS

A pub selling alcohol under a premises licence generally needs a Designated Premises Supervisor (DPS) who holds a personal licence. The DPS is the named person responsible for alcohol sales at the site. Per GOV.UK, the DPS does not need to be on site every time a sale happens but is responsible for how staff follow the licence.

To apply for a personal licence in England and Wales, you typically need to:

• Be 18 or over
• Hold an accredited qualification, often the Award for Personal Licence Holders (APLH) Level 2
• Pass a basic DBS check
• Prove your right to work in the UK

The fee is currently £37, and the APLH Level 2 course is often £150 to £200. Check GOV.UK for the current rules before you apply.

Food hygiene registration

If you serve food, you need to register your food business with the local council. GOV.UK recommends registering at least 28 days before you start trading. It is free to register.

Food businesses are also generally required to have a written food safety plan based on HACCP (Hazard Analysis and Critical Control Point) rules. The Food Standards Agency has free templates.

Music and TV licences

If you play recorded or live music in the public areas of the pub, you will usually need a licence from PPL PRS. If you show live TV for customers, you need a TV licence. Rules depend on what you play, where and for whom, so check before you open.

Licensing has a lot of exceptions. Members' clubs, one-off events, outdoor areas, under-18s in the pub, late hours and bigger entertainment setups each come with extra rules. This overview covers the most common pub setup. If yours is different, or you are unsure, talk to a licensing adviser or solicitor.

Scotland and Northern Ireland

Licensing works differently in Scotland and in Northern Ireland. If you are based there, check with your local licensing board or council.

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

Pub running costs vary by size, setup, location and whether you serve food. The table below shows typical monthly costs for a small-to-mid-sized wet-led pub (one that mostly sells drinks rather than food). These figures are rough industry ranges, not numbers from a named dataset, so your own costs will differ. As costs can differ widely by location and individual setup, you should always conduct your own research to build a more accurate picture.

Use them as a starting point, then build a full forecast for your own site.

What could this look like in practice:

Say a small wet-led pub takes £10,000 a week. That is about £43,000 a month in sales.

First, work out gross profit. Gross profit is what you have left after paying for the stock you sold. Wet stock (drinks) typically runs at 55% to 65% gross profit, so on £43,000 of sales you might keep around £26,000 of gross profit.

Then take off the running costs:

• Rent: £4,000
• Wages: £8,000
• Gas, electric and water: £2,500
• Insurance: £300
• Other costs (card fees, repairs, music, waste): £1,500
• Total running costs: £16,300

That leaves around £9,700 a month before tax. Out of that you still need to pay yourself, cover any loan repayments, and set money aside for VAT and corporation tax if they apply.

It is tight. A quiet week, a broken fridge, or a late delivery can wipe out your margin. That is why cashflow matters so much.

The skills that matter most in year one of running a pub

You do not need a hospitality degree to run a pub. But five practical skills make a big difference.

1. Cash handling and daily check-off. Till to takings, takings to bank. Done every day, not every week.
2. Stock control and gross profit (GP). Know your GP by product type (draught, bottled, spirits, food) so you can spot losses fast.
3. Rota planning. Get the right people on at the right times. Handle sickness without panic.
4. Customer service under pressure. A busy Saturday night tests everything.
5. Basic bookkeeping and tax admin. You don’t  need to be an accountant. But you do need to know what the numbers are.

Many new landlords are strong on service and weak on numbers. If that sounds like you, book time with an accountant early.

Managing money and cashflow

Pubs live and die on weekly cashflow. Your biggest bills (rent, wages, stock) often land before your biggest takings clear. Even a profitable pub can run out of cash if the timing goes wrong.

A few habits that help from day one:

• Keep business and personal money apart. Mixing the two is the most common mistake new landlords make. It creates real problems at tax time.
• Check off your till daily. Do not let a week of takings pile up unchecked.
• Watch card payout timings. Most card firms pay out one to three working days after the sale. If you rely on card takings to pay Monday's suppliers, you need to know when the money lands.
• Set aside tax every week. A good rule of thumb is to move a fixed share of weekly takings into a separate pot. Use it for VAT (if you are registered), corporation tax and PAYE.
• Track VAT carefully. Businesses usually have to register for VAT when taxable turnover passes £90,000 in any rolling 12-month period, or when they expect to pass it in the next 30 days. Check the current rules on GOV.UK.

Opening a business bank account for your pub

A business bank account makes life easier for most pub operators. Limited companies are a separate legal entity, so company money has to be kept apart from personal money. Sole traders are not legally required to have a separate account, but most accountants recommend one to keep income, expenses and tax clean.

When you pick an account, look for:

• Fast set-up. Many first-time landlords need an account open in days, not weeks.
• Cash deposits. Pubs still take cash. Paying it in needs to be simple and cheap.
• Card and till links. Your till and card payments should flow into the account cleanly.
• An overdraft facility. Pubs often have short cashflow gaps between big bills and card payouts. An overdraft, if you qualify, can bridge these.
• FSCS cover. Eligible deposits are usually covered up to £120,000 per person, per authorised bank.
• Clear fees. Check the fee list in full before you apply. No business account is truly "free" once cash handling is factored in.

Business banking with Zempler Bank

Zempler Bank supports pubs and restaurants with straightforward banking, fast setup and built-in tools that help keep cashflow running smoothly.

• Apply in minutes online, so you can start trading sooner rather than waiting weeks.
• Takes cash deposits (via Post Office), which matters if you still take cash over the bar.
• Built for a wider range of credit histories, including those with limited or poor credit history. First-time business owners often struggle to open accounts elsewhere.
• Cashback on eligible card spending, which adds up when you pay suppliers, bills and dry stock on a business card.
• Business overdrafts (subject to eligibility), which can help bridge short cash gaps.
• Built in tools to help manage money, like cashflow tracking, integrated accounting and Pots.
• FSCS protected up to £120,000  on eligible deposits.

Current fees and eligibility details are on the Zempler Bank website.

Learn more about Zempler business bank accounts for hospitality.