How To Open a Pub or Bar in the UK: Step-by-Step Guide (2025)

Whether you’re dreaming of opening a traditional local, a trendy taproom or a sophisticated cocktail bar, the UK’s celebrated pub culture offers exciting opportunities for those with passion and persistence.

The rewards of running your own establishment – from shaping local hospitality to becoming part of your community’s social fabric – make the hard work worthwhile. Now is a great time to try a new concept, as British drinkers are expanding their preferences, seeking a variety of beverages from craft beers to English sparkling wine to no and low alcohol spirits.

This comprehensive guide walks you through every essential step of opening a pub or bar, starting with choosing your business model through to pouring your first pint.

What you’ll learn in this guide to opening a bar or pub:

• How to choose between tenancy, leasehold and freehold options
• Essential licensing requirements and legal obligations
• Realistic startup costs and funding options
• Practical tips for daily operations and management
• Technology and tools to streamline your business

Step 1: Decide on the type of pub or bar

Your first decision shapes everything that follows: how will you enter the pub or bar trade? There are three distinct paths, each with different levels of control, investment and responsibility.

Understanding your options

• Tenancy agreements offer the lowest barrier to entry, requiring an upfront investment from as little as £5,000. As a tenant, you’ll pay rent to a pub company or brewery while running the business independently. You’ll usually be tied to purchasing drinks from your landlord at fixed prices, which affects your margins but provides support and access to established supply chains. Tenancy periods typically last 2-5 years.
• Leasehold arrangements require a more substantial investment of £20,000 or more, but they offer greater freedom. You’ll also have a longer-term agreement, typically 10-25 years, and more control over suppliers and renovations. This option suits those with some industry experience who want more autonomy without the full commitment of ownership.
• Freehold ownership means buying the property and business outright, with the average price exceeding £700,000. However, the purchase cost will vary significantly depending on the region and location. You’ll have complete control, but also full responsibility for maintenance, compliance and all business risks.

 

Regardless of which route you choose, thorough negotiation is essential. Don’t accept initial offers at face value – research comparable properties and market conditions to help you negotiate better terms.

Making the right choice

Consider your long-term goals and current resources. If you’re testing the waters, a tenancy lets you learn the trade with lower risk and built-in support. For those with hospitality experience and moderate capital, a leasehold provides a balance of independence and structure. Freehold suits experienced operators with substantial funding who want total freedom to follow their vision.

Factor in hidden costs too – tenancies may seem affordable initially, but tied supply deals (where you’re required to buy beer and other products from your landlord at set prices) can reduce your profit margins. Conversely, while freehold requires massive upfront investment, you’ll benefit from better margins and potential property appreciation. Learn more about what influences the cost of opening a bar or pub.

Step 2: Write a business plan

A solid business plan transforms your ideas about how to open a pub into a viable venture. Beyond securing funding, it forces you to think through every aspect of your operation, anticipate challenges and set realistic targets. Banks and investors look for comprehensive planning that demonstrates your understanding of the market and ability to navigate challenges – a well-prepared plan shows you’re serious about success.

What to include in your business plan:

• Your executive summary should capture your vision concisely. Explain what makes your bar unique, your target market and projected returns. Keep it punchy – this section often determines whether investors read further.
• Market research and competitor analysis demonstrate you understand your patch. The UK pub and bar market is expected to reach £18.9 billion in revenue in 2025, but competition remains fierce. Identify every pub, bar and restaurant in your vicinity. Where are the gaps? Perhaps there’s demand for a gastropub in an area dominated by traditional taverns, or maybe local professionals want somewhere for quality cocktails.
• Your concept and target market section brings your vision to life. Will you focus on craft beers for enthusiasts or establish a wine bar for the after-work crowd? Define your ideal customer: age, income, drinking habits and what they want from a pub or bar experience. 
• Include a detailed menu and pricing strategy. Start by working out the total cost of each item on your menu, then factor in your target profit margin. Check that your proposed prices are aligned with both your concept and your target customer’s expectations. For example, if you’re a craft beer specialist in Shoreditch catering to the City crowd, you may well be able to charge £7 a pint; if you’re a rural village pub, your customers won’t expect to part with more than £5.
• A SWOT analysis (strengths, weaknesses, opportunities, threats) helps you take a critical look at your business. Aim to be objective. By examining both internal and external factors, you can create strategies to make the most of your advantages and address any challenges.
• Financial forecasts are essential and need grounding in reality. Research from the British Institute of Innkeepers suggests that it can be tough to turn a profit due to staffing, energy and inflationary costs. Plan for a challenging first few years – most new bars take considerable time to become consistently profitable.

 

Calculate your break-even point by totalling your monthly expenses – rent, staff wages, utilities, stock and overheads – against your projected revenue. And don’t forget to factor in your startup costs, from licensing fees to your initial stock.

Step 3: Understand licensing and legal requirements

A key part of how to open a bar involves obtaining the necessary licences. Most applications need at least three months from start to finish, so start this process early to keep your plans on track.

Alcohol licensing

You’ll need both a premises licence and a personal licence to sell alcohol.

The premises licence allows you to sell alcohol and provide entertainment in your venue. You apply through your local council, and the cost depends on your property’s rateable value (an estimate of what it would cost to rent a property for a year), ranging from £100 to £1,905 for new applications. Once you’ve submitted your application, there’s a 28-day consultation period, and then it can take several more weeks before you receive the licence.

Your venue must have a designated premises supervisor who holds a personal licence to authorise alcohol sales. This requires passing an accredited qualification (one-day courses cost around £100) and applying to your local council (£37). Personal licence holders take legal responsibility for alcohol sales, so choose carefully.

Playing music

If you’re playing music, whether live or recorded, you’ll need a licence from PPL PRS. It costs around £600 a year to play music via radio in a pub or bar, and one-off live music events cost around £15 each. 

Your premises licence will stipulate conditions relating to entertainment at your venue, including noise levels, time restrictions and audience size limits.

Serving food

If you’re serving food, you need to register a food business (free of charge) with your local authority at least 28 days before you start trading. You should also organise training for any staff who handle food to ensure you comply with food safety and hygiene standards – the Food Standards Agency offers free online training.

Planning permission

If your chosen premises wasn’t used as a bar or pub previously, you’ll need planning permission to change it from one use class to another.

It can take up to 8 weeks for change of use planning applications to be approved, however, the exact timing and cost will depend on your local planning authority.

Fire safety

While designing your venue, make sure you follow fire safety law guidance. Before you open, conduct a fire risk assessment, create an emergency plan and provide fire safety training for all staff. 

Basic training can be completed within one hour, with online and in-person training costing around £15 to £35 per person.

Step 4: Secure funding and budget for costs

Getting your finances organised properly from the start gives you confidence and control. With the right funding in place and a clear budget, you can focus on creating the bar you’ve always envisioned rather than cash flow concerns.   

Funding options for opening a pub or bar

• Traditional loans from banks and building societies remain a common choice for bar financing. You’ll need a solid business plan and typically a 25% deposit to secure a commercial mortgage. 
• Square Loans offer alternative funding with faster approval and repayment through daily sales percentages. When trade is busy, you pay more; when it’s quieter, you pay less.
• Investors can provide capital in exchange for equity or returns. This might include angel investors, venture capital or even friends and family who believe in your concept.
• Savings give you complete control without debt or equity obligations. Many successful bar owners combine personal savings with other funding sources to maintain ownership while accessing additional capital.

Budgeting for startup costs

Once your funding is secured, create a budget that lists all the costs of opening a bar. These may include:

• Licensing and legal fees: premises and personal licences as well as legal advice
• Refurbishment costs: renovation, decoration and signage
• Rent deposits: landlords typically ask for several months upfront
• Insurance: public liability, employer’s liability and contents insurance
• Stock: initial drinks inventory and bar supplies
• Staffing: recruitment and initial wages
• Marketing: launch events, advertising and promotional materials

Planning for ongoing costs

Understanding your monthly operating expenses helps you maintain healthy cash flow. Your ongoing costs will typically include:

• Utilities: gas, electricity, water and waste collection
• Staff wages: salaries, National Insurance and pension contributions
• Tech subscriptions: POS system, accounting software and music streaming
• Supplier orders: keeping your stock replenished to meet demand
• Business rates: all UK businesses have to pay, but check if you’re eligible for business rates relief

 

Remember seasonal variations – utility bills can double in winter due to heating costs and shorter daylight hours, while summer might require additional staff if you have a beer garden or show major sporting events. Aim to build cash reserves to cover up to six months of operating expenses to help you cope with unexpected repairs, from boiler breakdowns to flooded cellars.

For a more detailed breakdown, read our deep dive on bar startup costs.

Budgeting tips for success

When you’re producing your financial forecast, create three scenarios: pessimistic, realistic and optimistic. Base your working capital (the difference between your current assets and liabilities) on your pessimistic forecast to ensure you’re prepared for quieter periods. Project monthly cash flow for the first two years so you can account for seasonality – for example December might generate 20% of annual revenue while January sees significant drops.

Break-even analysis reveals when you’ll start making money. Calculate your fixed costs (rent, salaries, insurance) and variable costs (stock, utilities), then determine how many customers you need daily to cover expenses and to turn a profit. This financial clarity is essential for anyone wondering how to open a bar profitably.

Step 5: Choose the right location

Understanding how to open a bar successfully starts with choosing the right location. The perfect spot balances visibility, accessibility and affordability while matching your target market’s habits. Spend time observing potential locations at different times – a street that’s bustling at lunch might be deserted by evening, for example. 

Evaluating potential sites

When scouting potential locations for your bar, here’s what to look for:

• Foot traffic patterns: This is essential for checking a venue’s viability. To measure foot traffic, spend some time at a prospective location during your planned key trading hours. Count how many people pass by, noting their characteristics and behaviours to check if they align with your ideal customer profile.
• Local demographics: Conduct research into the people in a prospective area, checking age profiles, income levels and household types. Does the demographic match your concept? A craft beer bar may need young professionals with disposable income, while a family pub will do best on a site with a garden and parking, within a residential area.
• Local competition: Visit every venue within walking distance to understand what works and what’s missing. Sometimes clustering creates destination hotspots – think how London’s Bermondsey Beer Mile benefits all venues. Other times, saturation means fighting for limited customers.
• Transport and accessibility: Consider how your target customers will reach you – and how they’ll get home after a few drinks. Look for venues close to train stations, on bus (and night bus) routes, or within walking distance of residential areas.

Interior design and space planning

Your bar’s design goes beyond aesthetic appeal – it directly impacts profitability. Poor layout creates bottlenecks, frustrates staff and drives customers away. Smart design maximises capacity while creating atmosphere.

• Start with flow patterns. Map how customers will move through the space, consider accessibility requirements and avoid crossing paths that could create congestion. Position your bar where it’s visible from the entrance but doesn’t block movement. 
• Consider zones for different customers. High tables near the bar suit quick drinks and solo visitors, while comfortable seating areas work for groups and longer stays. This variety maximises appeal and allows you to manage different crowds simultaneously.
• Choose materials that balance style with practicality. When choosing your furniture and fittings, make sure they align with your concept and budget, then focus on functionality. Opting for durable, easy-to-clean materials will make managing the space so much easier.

Lease considerations

Before signing the lease on your chosen property, it’s important to read every clause carefully  consult a lawyer if there’s anything you’re not sure about. Pay particular attention to:

• The length of the agreement
• The rental amount
• Who’s responsible for repairs and maintenance
• The break clause
• The conditions for renewing the lease

Step 6: Hire, train and manage staff

Once you’ve secured your perfect location, it’s time to build your dream team. Great staff can transform an average pub into a beloved local, while poor service scuppers even the best concepts. Find people who share your vision, then support them with training so they can perform at their best.

Building your team

The staff you need will depend on the size and concept of your bar. Initially, you might need:

• Bar manager (if not yourself): Oversees all staff scheduling and training, daily operations and inventory management. 
• Bartenders: Mix and serve drinks, engage with customers and maintain and manage the bar area. 
• Barbacks: Assist the bartender by prepping ingredients, restocking or cleaning. 
• Servers: Provide table service, taking orders and bringing them to customers. 
• Kitchen staff (if serving food): Prep, cook and plate food and keep dishes and glassware clean. 
• Security (if necessary): Check IDs, manage crowds and maintain a safe environment. 

Recruitment tips

Successful recruitment starts with honest job descriptions, which highlight the challenges as well as the rewards. 

Prioritise personality, attitude and communication skills by holding face-to-face interviews with scenario-based questions – ask candidates how they’d manage multiple drink orders during the Friday night rush or how they’d deal with a customer complaint to gauge their problem-solving abilities.

When recruiting your first roles, try posting your vacancies in a range of places, to see which reaches the best candidates in your area:

• Industry job boards (Indeed, Caterer.com)
• Local colleges with catering and hospitality courses
• Social media and community groups
• Word-of-mouth recommendations
• Flyers on your premises

Training excellence

Once you’ve found the right people to power your bar, invest in training to ensure that your operations remain compliant and your customers receive outstanding service. Key types of training include:

• Responsible alcohol service: Anyone serving alcohol must understand the Licensing Act, how to check ID and how to refuse service diplomatically.
• Health and safety: It’s vital that all staff can keep themselves, their fellow staff and customers safe. This includes fire awareness and food hygiene training.
• Customer service: Training can help staff develop their communication skills, use their initiative to create memorable experiences, and handle customer complaints effectively.
• Product knowledge: Make sure your staff are well-versed in your entire offering, from the wines, beers and spirits you stock, to your signature and classic cocktails. This lays the foundation for personalised recommendations and upselling opportunities.

Managing teams effectively

Careful management is needed to prevent a new team from becoming overwhelmed. Start with clear structures and expectations from day one.

• Staff scheduling: With the right tools, creating and managing rotas can be a breeze. Team management software like Square Shifts keeps everything in one place so you can track your team’s availability and assign shifts accordingly.
• Payroll management: Paying staff accurately and on time is vital for morale. Square Shifts can help with your payroll prep by automatically including tips in your wage calculations and managing multiple wage types for both hourly and salaried workers.
• HR best practices: Developing clear HR documentation protects both you and your employees. Start by creating a simple employee handbook that covers your policies (eg code of conduct, health and safety), which you can expand over time. 

Step 7: Set up your pub or bar

The equipment you need to run your pub or bar will vary depending on your offering, but there are a few essentials that every operation needs to get started.

Essential equipment checklist for opening a pub or bar

Bar:

• Bartending tools (eg, bottle openers, measuring jiggers, cocktail shakers)
• Refrigerators
• Glassware in a range of styles and sizes
• Ice machines
• Commercial glasswasher
• Multi-bowl sinks
• Speed rails and bottle wells
• Beer mats and drip trays
• Separate bins for glass, general waste and recycling

Front-of-house:

• Furniture in keeping with your concept
• Lighting to create the right ambience
• Signage to communicate key information to customers
• Menus

Tech:

• POS system for placing orders and taking payments
• Inventory management software for tracking stock in real time
• Scheduling software for rota planning and payroll integration

 

The Square POS for bars and pubs is designed to help you run your business efficiently, so you can keep the drinks flowing and customers happy. With one integrated system, you can process payments quickly, manage your inventory from anywhere and optimise your team’s time with scheduling, time tracking and payroll prep.

Step 8: Daily operations and management

We’ve covered all the keys steps of how to open a bar, but what about once your doors are open? Success hinges on the operational systems you put in place – the unglamorous but essential routines that keep everything running smoothly. These behind-the-scenes processes determine whether you’re constantly fighting fires or confidently growing your business.

Inventory management

One crucial aspect of how to open a bar that many new owners underestimate is inventory management. Learning how to manage your inventory effectively can make all the difference to your profitability.

Begin by implementing key principles:

• Follow the FIFO (first in, first out) rule: This is a method of selling or using the oldest items of inventory first, before newer items.
• Calculate your PAR (periodic automatic replacement) levels: This is the minimum quantity of an inventory item that you should have in stock at any given time.
• Track your inventory regularly: Create a schedule so that physical counts are performed on the same day each week or month.

 

Training your staff to follow proper inventory management practices will help your operations run smoothly even during the busiest shifts, reduce waste and boost your profit margins.

Working with suppliers

A big part of running a business is building relationships – with customers, colleagues and suppliers. Take the time to establish genuine relationships with a few trusted suppliers and you’ll reap the rewards. They may prioritise you during shortages and share market intelligence about new products and trends.

When it comes to negotiating with suppliers, preparation is your strongest tool – research typical prices and know your annual volume potential before meetings. Start discussions by expressing enthusiasm for a long-term partnership rather than demanding discounts, and look beyond price to the whole package, including payment terms and delivery flexibility. Remember that good negotiation leaves both parties feeling valued – you want suppliers who’ll answer emergency calls on Bank Holiday weekends, and that relationship is worth more than the last penny of discount.

Using technology to streamline processes

Opening a bar without up-to-date technology means spending hours on tasks that could take minutes. The right systems free up your team to focus on what really matters: looking after customers. When everything talks to each other – your till to your inventory system, your rotas to your reporting – you eliminate duplicate work and reduce costly mistakes.

Square POS acts as the nerve centre of your operations, bringing together all the essential functions you need:

• Touch-screen ordering that’s intuitive for staff and reduces errors at the till
• Contactless payments that speed up service during the Friday night rush
• Automatic inventory updates through Square Inventory Management that warn you before you run out of bestsellers
• Staff scheduling that reduces the amount of time you spend managing your team.

 

The beauty of integrated systems is that they grow with you. When opening a pub, you can start with basic payment processing and add other functionality as and when you need it.

Step 9: Track performance and revenue

Regular reporting helps you spot issues early, identify opportunities and make informed decisions that protect your profitability. Modern POS systems can provide vast amounts of data, so it’s important to know which numbers really matter to avoid information overload.

Critical metrics to monitor

• Sales per hour/day: Track this over several months to understand trading patterns, then use this knowledge to inform your plans, from staff shifts and inventory orders to marketing promotions.
• Cost of goods sold (COGS): This is the cost required to make each item you sell. Calculating COGS and monitoring it regularly will help you determine if your pricing strategy is correct or if you need to make adjustments to maintain a healthy profit margin.
• Staff costs vs sales: Work out what percentage of your sales revenue pays for staff costs, then compare this against your sales data to identify your busiest times and days. This helps you schedule efficiently – ensuring you have enough staff when it’s packed, whilst avoiding overstaffing during quieter periods that eat into your margins.
• Average transaction value (ATV): This is a good indicator of the overall health of your business. Calculate your baseline ATV, run promotions and train staff in upselling techniques, then check if those efforts are effective in increasing your ATV.

 

The right reporting software will make it quick and easy to keep on top of your KPIs. You can sign into Square Dashboard from any computer to get your business insights at a glance.

Step 10: Marketing, promotions and events

When opening a bar, you’ll need a marketing push to let people know who you are, where you are and why they should pay you a visit. But don’t wait until you open – start building buzz in the lead-up to launch, and then aim to maintain momentum through consistent, creative promotion.

Building your brand identity

If you’re wondering how to open a bar that stands out from the competition, start with your story. Why does your bar exist and what makes it special? If you’re clear about your concept, it will make all those decisions about how to present yourself to the world much easier. All the elements of your brand – from your name to your logo, your colour palette to your fonts – should work together to create a coherent identity.

Local and digital marketing

The key channels for reaching potential customers in your area are:

• Social media: Set up social media accounts and post regularly to start building a community and show potential customers what they can expect from your bar. Not sure which platforms you need to be on? Think about which apps your ideal customer spends the most time on, and focus your efforts there.
• Search Engine Optimisation (SEO): Ensure your website is optimised for relevant keywords so you appear in search results. To identify relevant keywords, think about the terms your potential customers will type into Google, eg “cocktail bar in [city]” or “pub with garden near [landmark]”.
• Google Business Profile: This is a free tool that boosts your local visibility and lets you showcase your business. Claim your profile as soon as you can and add photos, menus and opening hours. Encourage customers to leave reviews to build your credibility.

Email marketing

Building an email list gives you a direct line to your customers. Start collecting addresses before you open by adding a sign-up form to your website or social media – offer early bird discounts or exclusive previews to encourage people to join. Once you’re trading, Square Marketing connects directly to your POS so you can collect email addresses when customers pay and grow your list without extra effort.

Use emails to share what’s new on your menu, promote upcoming events or announce special offers. Square Marketing’s built-in templates make it simple to create professional campaigns, and you can target specific customer groups based on what they’ve ordered or how often they visit. For instance, send cocktail enthusiasts a preview of your new summer menu or invite your VIPs to an exclusive tasting evening. Track which emails drive customers back through your doors, so you can refine your approach and focus on what works.

Customer loyalty programmes

As soon as you have customers coming through the door, you need to think about how to convert them into regulars. Of course, you must deliver a consistently excellent experience that customers love, but loyalty programmes give customers extra reasons to choose you over the competition.

Square Loyalty makes it easy to keep customers engaged. You can set up a points-based programme in minutes, choosing whether customers earn points by visits, the amount they spend or what they order – perhaps offer double points on cocktails to boost those high-margin sales. Customers can enrol at your till or online, then keep track of their points and rewards with a digital loyalty pass on their phone.

The data you gather reveals invaluable insights: who your best customers are, what they love ordering and when they typically visit. Armed with this knowledge, you can create targeted offers that feel personal to them.

Events and promotions

Hosting regular events is a great way to create a predictable revenue stream while building a sense of community. A well-planned weekly schedule gives customers reasons to visit throughout the week, not just Friday nights. For example, Monday quiz nights can transform your quietest evening into a reliable earner.

Seasonal promotions keep your offering fresh and create marketing opportunities. Think beyond Christmas and Easter to how you can make the most of each season, and how you can partner with local businesses. Say there’s a brewery nearby, why not run a beer festival each Autumn, accompanied by harvest supper clubs featuring seasonal dishes from local producers.

Step 11: Maximising profitability

Once you’ve mastered the basics of how to open a bar, let’s look ahead to when your operation is running efficiently, and how you can increase your profit margins. Remember, small improvements across multiple aspects of your business can compound into significant gains.

Menu engineering

Analyse each item on your menu, evaluating its popularity and profitability. Identify your high-margin heroes (such as signature cocktails) and give them prominent positioning within your menu. Review items that are no longer popular or profitable and consider removing them.

Monitor your pour costs regularly – if ingredient prices rise or you’re seeing more wastage than expected, adjust your prices accordingly. Similarly, if a particular drink becomes exceptionally popular during certain periods, test slightly higher pricing to maximise revenue when demand is strong.

Learn more about how to perfect your menu.

Upselling and cross-selling

Staff training is key to upselling. The better your team understand the customer and the menu, the easier it will be to upsell by making informed recommendations. If a customer’s usual order is a gin and tonic, you could suggest a premium gin or encourage them to branch out and discover a new flavoured gin or seasonal gin cocktail.

The same principles apply to cross-selling. Ensure your staff understand which food and drink options pair well together, and how to make well-timed recommendations that will enhance the customer’s experience.

Retaining customers

To encourage repeat business, create a welcoming atmosphere where customers feel cared for. Train staff to learn and use regular customers’ names and to understand their preferences, from their taste in wine to their favourite seat. Create an ambience where people love to linger, with comfortable seating, soft lighting and music that sets the right mood. And don’t forget the little touches, such as fresh flowers that match your colour palette and candles that are lit as the evening draws in.

How to open a bar FAQs

How much does it cost to open a pub in the UK?

Opening costs vary by the type of bar or pub, size and location. Factoring in leasing or freehold costs, licensing, staffing and marketing, the startup costs for a new bar or pub in the UK can range from £20,000 to £1million.

What licences are needed to run a bar?

To run a bar, you need a premises licence and a personal licence for alcohol sales. Music requires a PPL PRS licence, and bars serving food must be registered as a food business with the local authority.

How many staff are needed to run a pub?

Staffing depends on the size and style of your pub and your opening hours. A small wet-led pub could open with just a manager and one or two bartenders. Food service requires kitchen staff, adding at least two to three additional heads. During peak times, aim for roughly one bartender for every 50 customers to maintain good service, plus cleaners and possibly door security depending on your venue.

What’s the profit margin on drinks in a bar?

The average gross profit margin on drinks sold in bars and pubs in the UK is 46%, according to research by the British Beer and Pub Association. Your profit margin on drinks will depend on your purchasing costs, pour accuracy, wastage levels, pricing strategy and the type of drink you serve – spirits and cocktails typically offer higher margins than beer and wine.

How long does it take to open a bar?

It typically takes around six to 18 months to open a bar. The length of time will depend on the premises – whether you’re taking over an existing bar, doing significant renovations or building from scratch. Other major factors that will influence your timeline are how long it takes to secure funding and obtain the necessary licences.