Running a Pub: Everything You Need to Know

From pulling pints to picking an ePOS system and taking payments, there’s a lot to consider when it comes to running a pub. Plus, shifts in culture and consumer behaviour also create new opportunities to reimagine what a pub can be, from adding bedrooms to your offering to making it a go-to for Sunday roasts.

But before you go about revitalising your community, you need to know the basics. In this article, we address the following:

• Opening a pub
• Running a pub
• Managing a pub
• Expanding to new locations

Opening a pub

Location, location, location

As with every type of hospitality business, location is crucial. Will it be a city pub, full of hustle and bustle, lunchtime rushes and 5pm happy hours? Or, maybe you’d rather a quieter suburban or rural pub with a more communal feel?

Your pub’s location is heavily tied in with your target clientele, your menu pricing, rent, and labour costs. Don’t rush this step—location should be a core aspect of your pub strategy.

Choose between a tenancy and a leasehold

The type of pub you choose to run impacts the cost of running it. Pub running costs will vary based on location, business type, and macro-economic factors, so make sure you land on an arrangement that works for you given the time and place.

Tenancy

If you’re just starting in the pub industry, securing a tenancy is a good place to start.

It’s the easiest and most common option for running a pub. They generally last around three years, making them a good option if it’s your first time running a pub. You can dip your feet in the water without making a long-term commitment.

Tenancies involve running a pub for a brewery or large organisation at a lower rate of investment and cheaper rent. This reduces the cost of running a pub, but you’re often obliged to sell only the products supplied by said brewery or company in an arrangement known as a beer tie.

This way, you avoid a lot of heavy upfront costs of running a pub like furniture, glassware, and general pub infrastructure. That’s all provided for you.

Leaseholds are usually reserved for more experienced publicans. They can last between 10-25 years and usually require between £50,000 and £250,000 in investment. You still rent the premises from a brewery or pub company, which acts as your supplier.

Freehold

A third option is buying a pub freehold, which is basically when you buy the pub outright. It’s usually the riskiest and the most expensive way of running a pub. The cost of buying a freehold is often considerably more than the pub’s turnover.

Don’t let that deter you though. As a freeholder, you have complete freedom over how you run your pub. From furniture and glassware to beer and wine suppliers.

Free from the restraint of breweries or  pub companies, a freeholder can create an establishment in your image. Just make sure you’ve got the capital to back it up.

Running a pub

Obtaining the right licences

When it comes to selling alcohol, there are two licences you need.

Premise Licence: This licence authorises your pub’s physical location to sell alcohol. You can obtain it through your local council via an online application. With a premise licence, you’re obliged to provide free drinking water and adopt an age verification policy. It is also your responsibility to promote drinking responsibly.

Personal Licence: To sell alcohol yourself, or authorise others on your premises to do so, you’ll need a personal licence. For a personal licence you must first get a qualification from an accredited provider. Once qualified, you should legally declare yourself a designated premises supervisor (DPS). A DPS must always hold a personal licence, is responsible for the sales, and supply of alcohol and first point of contact with police or local government.

Hire a team

Hiring the right staff at your pub is critical to its success. Your customers should feel welcome and comfortable at your pub. Emphasise this point when hiring and training your staff. A few key roles at a pub are as follows:

Bartender: Bartenders have first contact with your customers at the bar, so they should be a great communicator and a savvy salesperson.

Barback: The barback is the unseen hero of the bar, collecting glasses from the floor and ensuring the bartender has a ready supply of clean ones.

Chef: The type of food offered in pubs varies drastically from one establishment to the next. Some pubs might prioritise snacks–think scotch eggs and sausage rolls–while others will make food a key offering. Either way, a chef is a key role.

Waiting staff: The responsibilities of waiting staff will include taking orders, running dishes from the kitchen to the customer’s table, as well as taking payment for orders at the table.

Cost of goods sold

Cost of goods sold (COGS) is exactly what it sounds like: a calculation of the entire cost of items sold on your premises.

For businesses that produce their own products, the cost of sourcing and manufacturing those goods is often included in their COGS. For most pubs, however, that only includes the costs of purchasing the items that are sold on-premises.

To calculate COGS, simply add the amount of inventory (in this case food and beverage) at the beginning of a period, to the amount of inventory purchased during that period

Then subtract from that the amount of inventory at the end of that period, and that’s your cost of goods sold!

Utility costs

Running a pub requires a lot of gas and electricity, but just how much depends on what type of pub you’re running.

According to Utility Bidder, a pub’s utility costs can range from 3.8% to 4.8% cost to your pub’s turnover. The costs vary depending on location, whether you offer food, as well as the type of property.

It’s also worth bearing in mind that macroeconomic situations can affect utility costs.

Managing a pub

Stock control

Good stock control is essential to running a pub. A close eye on what goes in and out of your premises helps you maximise profits and plan for the future.

Say you sell two beers on tap. One’s an IPA, the other’s a stout. You buy them for the same price, but when checking stock you notice that the IPA has vastly outsold the stout. You realise from this simple observation that, if you want to purchase stock to support demand and minimise waste, you should be stocking more IPA than stout.

How can you work out exactly how much to order for both to increase your return on investment?  You could use your powers of observation, or sift through the books to discern patterns. But these methods are time-consuming and prone to error.

A more reliable method is using an ePOS to keep track of stock for you. Lightspeed ePOS, enables you to quickly access an accurate digital record of current and past stock, orders, and purchases.

Most importantly, you can track stock in real time and receive email notifications when your stock falls below a certain threshold.

Get notified when low on stock

An advanced pub ePOS system will allow you to add certain ‘rules’ to inventory items, which trigger notification emails when a stock item goes below a predefined quantity. These rules can be configured in the ePOS back office. Here’s how you do it in Lightspeed ePOS:

• Go back to your six units of beer in the back office. How low can it go before you need to reorder? You might decide it’s best to set a rule for when you only have enough to last you one more business day (around two units).
• Before creating a rule, you can toggle whether or not the rule applies to all stock or not. In this case, we only select beer.
• Now you’ve selected the unit item, you enter the number of units below which the rule will be applied for the chosen product—two units.
• Now when the number of bottles reaches below two units, you’ll be notified and can reorder promptly.

Employee management

Labour costs are a big determining factor in your pub’s success. Ideally, you want to reduce them as much as possible, while still keeping your staff happy and your pub running smoothly.

In an industry with a historically high staff turnover rate, the ability to train new employees quickly is a must-have. For that reason, bar managers need an intuitive platform from which they can train staff.

“The user interface on Lightspeed just keeps getting better and better with each implementation. And, it’s such an easy system to pick up. You can do a 45-minute walk through and it’s shocking how quickly new starters can pick up how to place an order, how to put it through on the tablet and use Lightspeed.” said Richard Nelson, Executive Chef at Fat Hippo.

Of course, not all your staff needs to access each aspect of your bar tech stack. On Lightspeed ePOS, for example, you can control employee permission which limits staff access to certain features. That way, you only need to teach them the essentials.

Lightspeed’s seamless integration with Planday saves time and labour costs by consolidating employee management within a single easy-to-use app that integrates with Lightspeed ePOS. Planday gives staff transparency and allows them to swap shifts, request vacations, and set availability. Plus, staff can punch in and out from the app, and they’ll get reminders to punch out when their shift finishes. You set a GPS radius around your location so you know who is on site, and when.

With Lightspeed Advanced Insights, you have access to server reports that let you understand what makes your top performers so successful and where improvements can be made, plus opportunities for coaching.

Sales reporting

Accurate reporting and forecasting have long been the bane of publicans’ lives. But getting the right sales information is important for turning a profit and staying on top of business management.

With Lightspeed Restaurant, you can run a range of reports to stay on top of things. With Lightspeed Payments, you have access to two types of reports:

Payment transactions report: The Payment transactions report provides an overview of all payment transactions made with Lightspeed Payments. Users can search for transactions by date, the last four digits of the card number, or payment ID.

Settlements report: The settlements report allows you to track when your transactions are processed and funded into your bank account.

You can also use reporting automation to generate and send daily Lightspeed Payments reports directly to your email. 


London-based Crate Brewery reaps the benefits of Lightspeed Payments: “We realised that in our bar downstairs, in the summertime, the bottleneck was speed of service. We could fit slightly more people in, but it was just how quickly we could serve them. Queues were forming at the bar, and so by removing 15 seconds from every transaction, that sped up our speed of service and then maximised how much we could take in a day.” says Jen Thompson, Head of Finance at Silo and Crate Brewery.

Within your back office, you have access to a range of other reports:

Sales reports: Sales reports provide a detailed breakdown of your sold goods and services, with net and gross data for a specified period.

Fiscal reports: Fiscal reports are also called financial reports or annual reports. These reports summarise all of the information and data about your business’s financial performance during the fiscal year in question. These reports are important for tax purposes.

Location reports: Location reports contain consolidated data for all of the locations that are linked to your account.

Staff reports: View staff reports for information about employee shifts and sales, such as which employee was responsible for which sales during a specified period.

Marketing

In the past few decades, advertising standards agencies have implemented strict codes on what you can and can’t do when marketing and advertising alcohol.

This means that pub marketers often have to tread carefully and get creative when advertising their business and products.

However, like so many things, social media has made pub marketing a little easier. It’s given pubs access to an external market that they may have been cut off from in the past. Now pubs can advertise themselves on any social media platform they choose.

But when it comes to social media marketing, knowing your audience is key. Social media has typically skewed towards younger generations, with 84% of those aged 18 to 29 and 81% of people between 30 to 49 actively using at least one social media site.

When marketing your pub, it’s important to consider your target audience. Why? Because Gen-Z drinks on average 20% less than millennials. If your target audience is Generation Z, consider focusing your efforts on showcasing your low and no-alcohol drinks, as well as promoting your pub as more than just a social space for drinking–this could be highlighting the food, the rooms, or weekly events, such as pub quizzes and book clubs.

Expanding to new locations

Lightspeed customer Cubitt House is a family of eight luxurious pubs, restaurants, and boutique hotels. Each venue has a distinct personality and a connection to the community, but what ties the group together is the focus on working with trusted suppliers, supporting British craft, and being proactive with sustainable practices.

In 2022, Cubitt House expanded from five locations to eight in the space of a year. With that growth came the need for an ePOS and Payments platform that could be relied upon.

“One of the key selling points of Lightspeed is that it allows us to operate as five venues or 3,000–it’s scalable.” said Marta Tokarz, Head of Beverage and Bar Operations. “Lightspeed is like a brain. We integrate as many platforms as possible into it, and thanks to Lightspeed, they all operate seamlessly.” Marta added.

While Cubitt House is a pub group, they have expanded their offering with bedrooms and restaurants, making them destinations in themselves, where people can pop in for a pint, stay for a beef pie, or rest their heads for the night.

When it comes to expanding, it’s important to consider how to tailor your offering to the areas you’re opening in. If you’re opening in a rural area, maybe you’d think about opening bedrooms. This will allow you to attract guests travelling from further afield.

Having the right technology in place makes expansion a much smoother process. As a multi-location business, Lightspeed lets you:

• Add new locations in your ePOS and start serving instantly.
• Update online menus across all locations at once.
• Use shared customer data to provide customers with a seamless experience at every location.
• Create and customise a new menu for each location, or assign menus to specific devices and use cases.

Brewing up something exciting?

Whether you’re opening your pub or expanding into a new location, technology can aid you on every step of the journey. Keen to get started with Lightspeed Restaurant? Let’s talk.