How to Start a Pub

Part 1 - How to start a Pub business - Background

Although they may be British in origin, pubs are now well established in American culture. They typically feature a family-friendly atmosphere, American-style food, televisions airing sports games and a full bar. All of this appeals to many people, which is why pubs have become so popular in the U.S.

For the entrepreneur, the widespread popularity of pubs creates a promising business opportunity.

Our guide is in 3 parts:

• Part 1 - How to start a Pub business - Background
• Part 2 - Our planner tool to see if this idea is the right fit for you
• Part 3 - Action plan to get started

What are the costs involved in opening a pub?

The startup expenses for a new pub are substantial. Business owners who are leasing space should expect to spend between $125,000 and $550,000 up front. Those who own the space their pub will be in spend more initially, often fronting between $175,000 and $920,000.

These funds are used to pay for a variety of necessary expenses, such as:

• The build-out of a space

• Kitchen and bar equipment

• Smallwares and dishes

• Ingredients

• Initial staff salaries

• Insurance

• Marketing and advertising

Because opening a brand-new pub is a costly endeavor, many business owners opt to purchase an established pub instead. Entrepreneur Magazine reports that an existing pub in a small town can cost as little as $20,000.

What are the ongoing expenses for a pub?

The ongoing expenses for a pub business are significant. They include rent, ingredient costs, equipment costs, employees’ salaries, utilities, and insurance premiums. For one pub, the ongoing monthly expenses were $24,740 per month.

Who is the target market?

A pub business might attract business professionals, graduate students, families, couples, and single adults. Exactly who comes to a particular pub will depend on the pub’s location, so it’s important to consider the surrounding demographic when forecasting sales. Ideally, a pub will attract patrons from at least a few of these groups, and they’ll come at different times of the day or night.

How does a pub make money?

A pub business makes money by selling food items and beverages to customers. Most pubs offer appetizers, entrees, sides, desserts, alcoholic drinks, and non-alcoholic drinks that customers can purchase.

How much can you charge customers?

Menu items at pubs tend to be less than $15. Some pubs have certain entrees that command higher prices. Patrons who visit a pub, however, are usually looking for affordable fare.

Despite having relatively low prices for individual items, tickets at pubs can become quite high. As an example, consider a couple that comes for drinks and a hamburger. Each person might order a $6 drink and a $10 burger, bringing their total bill to $32. If they stay for a few beverages, get an appetizer, or bring friends, the bill will be even more.

How much profit can a pub make?

A successful pub business can earn a significant profit. A well-planned new pub can be profitable within six months, and it’s possible for pubs to bring in six- and seven-figure revenues annually.

How can you make your business more profitable?

Pub businesses can increase how much they make during slower parts of the day by offering space for private events. Pubs can be great places to hold company meetings, family celebrations, and bachelor and bachelorette parties.

Day-to-Day and Growth

What happens during a typical day at a pub?

Every day at a pub is busy. The work that needs to be done includes:

• prepping ingredients that will be used that day

• making menu items as they’re ordered

• serving customers the foods and beverages they order

• cleaning up after customers leave

• reordering and restocking supplies that are used

Whenever an event is being held at a pub, there is also set-up and take-down for the event.

What are some skills and experiences that will help you build a successful pub?

The importance of experience in the foodservice industry can’t be overrated when starting a pub business. Business owners sometimes rush into starting a pub without having worked in the industry before, and this can be devastating for a pub. Without firsthand experience, business owners may struggle to manage workflows and inventor, effectively market and properly staff their pub.

Thus, working in the industry is one of the best ways to prepare for owning a successful pub business. Business owners should plan on spending several months working at someone else’s pub so they gain an understanding of the day-to-day operations.

In addition to working at a pub, taking business classes can be helpful for entrepreneurs who don’t have much general business knowledge. Open Culture and Coursera have free online classes.

What is the growth potential for a pub?

A pub business may have just one location, or it can grow into a regional or national business that has multiple locations. Fraser’s Pub and Casey’s Tavern are two examples of pubs that have a single location. HopCat and Keegan’s Public House are two pubs that have multiple locations.

What are some insider tips for jump starting a pub?

A pub business’ menu must offer more than alcoholic drinks and party food. Pubs attract a wide variety of patrons, and new pubs need to appeal to as many people as possible. To ensure there’s something on the menu for everyone who comes, a pub’s menu should include:

• a variety of alcoholic beverages

• water, soda, coffee and fancy non-alcoholic drinks

• meat, vegetarian, and gluten-free menu offerings

• meals and snacks for kids

How and when to build a team

Most pub businesses have at least a small staff of bartenders and servers when they open. Employees are needed to maintain the long hours that a pub is open and to provide fast service during peak times.

Part 2 - Is a Pub business the right fit for you?

Part 3 - Action plan to launch your Pub business in 90 days