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.
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Learn how to start your own Pub and whether it is the right fit for you.
Start a pub by following these 10 steps:
- Plan your Pub
- Form your Pub into a Legal Entity
- Register your Pub for Taxes
- Open a Business Bank Account & Credit Card
- Set up Accounting for your Pub
- Get the Necessary Permits & Licenses for your Pub
- Get Pub Insurance
- Define your Pub Brand
- Create your Pub Website
- Set up your Business Phone System
There is more to starting a business than just registering it with the state. We have put together this simple guide to starting your pub. These steps will ensure that your new business is well planned out, registered properly and legally compliant.
Exploring your options? Check out other small business ideas.
STEP 1: Plan your business
A clear plan is essential for success as an entrepreneur. It will help you map out the specifics of your business and discover some unknowns. A few important topics to consider are:
- What are the startup and ongoing costs?
- Who is your target market?
- How much can you charge customers?
- What will you name your business?
Luckily we have done a lot of this research for you.
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
- Initial staff salaries
- 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.
What will you name your business?
When registering a business name, we recommend researching your business name by checking:
- Your state's business records
- Federal and state trademark records
- Social media platforms
- Web domain availability.
It's very important to secure your domain name before someone else does.
STEP 2: Form a legal entity
Establishing a legal business entity such as an LLC or corporation protects you from being held personally liable if your pub is sued.
Form Your LLC
Read our Guide to Form Your Own LLC
Recommended: You will need to elect a registered agent for your LLC. LLC formation packages usually include a free year of registered agent services. You can choose to hire a registered agent or act as your own.
STEP 3: Register for taxes
You will need to register for a variety of state and federal taxes before you can open for business.
In order to register for taxes you will need to apply for an EIN. It's really easy and free!
You can acquire your EIN for free through the IRS website, via fax, or by mail. If you would like to learn more about EINs and how they can benefit your LLC, read our article, What is an EIN?.
Small Business Taxes
Depending on which business structure you choose, you might have different options for how your business will be taxed. For example, some LLCs could benefit from being taxed as an S corporation (S corp).
You can learn more about small business taxes in these guides:
- LLC Taxes
- Sole Proprietorship vs LLC
- LLC vs Corporation
- LLC vs S Corp
- How to Start an S Corp
- S Corp vs C Corp
There are specific state taxes that might apply to your business. Learn more about state sales tax and franchise taxes in our state sales tax guides.
STEP 4: Open a business bank account & credit card
Using dedicated business banking and credit accounts is essential for personal asset protection.
When your personal and business accounts are mixed, your personal assets (your home, car, and other valuables) are at risk in the event your business is sued. In business law, this is referred to as piercing your corporate veil.
Additionally, learning how to build business credit can help you get credit cards and other financing in your business's name (instead of yours), better interest rates, higher lines of credit, and more.
Open a business bank account
Besides being a requirement when applying for business loans, opening a business bank account:
- Separates your personal assets from your company's assets, which is necessary for personal asset protection.
- Makes accounting and tax filing easier.
Recommended: Read our Best Banks for Small Business review to find the best national bank or credit union.
Open net 30 accounts
Net 30 accounts are used to establish and build business credit as well as increase business cash flow. With a net 30 account, businesses buy goods and repay the full balance within a 30-day term.
NetMany net 30 credit vendors report to the major business credit bureaus (Dun & Bradstreet, Experian Business, and Equifax Business Credit). This is how businesses build business credit so they can qualify for credit cards and other lines of credit.
Recommended: Read our best net 30 vendors, guide and start building business credit.
Get a business credit card
Getting a business credit card helps you:
- Separate personal and business expenses by putting your business' expenses all in one place.
- Build your company's credit history, which can be useful to raise money later on.
Recommended: Apply for an easy approval business credit card from Divvy and build your business credit quickly.
STEP 5: Set up business accounting
Recording your various expenses and sources of income is critical to understanding the financial performance of your business. Keeping accurate and detailed accounts also greatly simplifies your annual tax filing.
Make LLC accounting easy with our LLC Expenses Cheat Sheet.
STEP 6: Obtain necessary permits and licenses
Failure to acquire necessary permits and licenses can result in hefty fines, or even cause your business to be shut down.
State & Local Business Licensing Requirements
Businesses involved in the sale of alcoholic beverages are required to obtain a liquor license from the appropriate state or local agency.
A comprehensive list of laws by state (including necessary licenses, zoning laws, etc), curated by the Alcohol and Tobacco Tax and Trade Bureau, can be found here.
Most businesses are required to collect sales tax on the goods or services they provide. To learn more about how sales tax will affect your business, read our article, Sales Tax for Small Businesses.
When selling food, you will need licensing from a local health department; all establishments serving food are required to pass a health inspection. Here are some tips for faring well on a health inspections.
There are federal regulations regarding what can and cannot be added to, sold as, and processed with food. Attached is a resource from the Food and Drug Administration detailing the process of starting a food business: How to Start a Food Business.
Certificate of Occupancy
A pub restaurant is generally run out of a storefront. Businesses operating out of a physical location typically require a Certificate of Occupancy (CO). A CO confirms that all building codes, zoning laws and government regulations have been met.
- If you plan to lease a location:
- It is generally the landlord’s responsibility to obtain a CO.
- Before leasing, confirm that your landlord has or can obtain a valid CO that is applicable to a pub restaurant.
- After a major renovation, a new CO often needs to be issued. If your place of business will be renovated before opening, it is recommended to include language in your lease agreement stating that lease payments will not commence until a valid CO is issued.
- If you plan to purchase or build a location:
- You will be responsible for obtaining a valid CO from a local government authority.
- Review all building codes and zoning requirements for your business’ location to ensure your pub restaurant will be in compliance and able to obtain a CO.
STEP 7: Get business insurance
Just as with licenses and permits, your business needs insurance in order to operate safely and lawfully. Business Insurance protects your company’s financial wellbeing in the event of a covered loss.
There are several types of insurance policies created for different types of businesses with different risks. If you’re unsure of the types of risks that your business may face, begin with General Liability Insurance. This is the most common coverage that small businesses need, so it’s a great place to start for your business.
Learn more about General Liability Insurance.
Another notable insurance policy that many businesses need is Workers’ Compensation Insurance. If your business will have employees, it’s a good chance that your state will require you to carry Workers' Compensation Coverage.
STEP 8: Define your brand
Your brand is what your company stands for, as well as how your business is perceived by the public. A strong brand will help your business stand out from competitors.
If you aren't feeling confident about designing your small business logo, then check out our Design Guides for Beginners, we'll give you helpful tips and advice for creating the best unique logo for your business.
If you already have a logo, you can also add it to a QR code with our Free QR Code Generator. Choose from 13 QR code types to create a code for your business cards and publications, or to help spread awareness for your new website.
How to promote & market a pub
One of the most effective ways to promote and market a pub business is via social media and online review sites. When going out for drinks or a meal, many people will search online for a nearby establishment to go to. Having a robust online presence and lots of positive reviews will help a pub come up in searches.
How to keep customers coming back
A pub business can keep regular customers returning by offering special events. Trivia nights, happy hours, concerts and holiday-themed parties all give patrons a reason to return to a pub. For some of these events, such as concerts and parties, a pub may even be able to charge a cover fee or have a drink minimum that further boosts revenue.
Still unsure about what kind of business you want to start? Check out the latest Small Business Trends to help inspire you.
STEP 9: Create your business website
After defining your brand and creating your logo the next step is to create a website for your business.
While creating a website is an essential step, some may fear that it’s out of their reach because they don’t have any website-building experience. While this may have been a reasonable fear back in 2015, web technology has seen huge advancements in the past few years that makes the lives of small business owners much simpler.
Here are the main reasons why you shouldn’t delay building your website:
- All legitimate businesses have websites - full stop. The size or industry of your business does not matter when it comes to getting your business online.
- Social media accounts like Facebook pages or LinkedIn business profiles are not a replacement for a business website that you own.
- Website builder tools like the GoDaddy Website Builder have made creating a basic website extremely simple. You don’t need to hire a web developer or designer to create a website that you can be proud of.
Using our website building guides, the process will be simple and painless and shouldn’t take you any longer than 2-3 hours to complete.
STEP 10: Set up your business phone system
Getting a phone set up for your business is one of the best ways to help keep your personal life and business life separate and private. That’s not the only benefit; it also helps you make your business more automated, gives your business legitimacy, and makes it easier for potential customers to find and contact you.
There are many services available to entrepreneurs who want to set up a business phone system. We’ve reviewed the top companies and rated them based on price, features, and ease of use. Check out our review of the Best Business Phone Systems 2022 to find the best phone service for your small business.
Recommended Business Phone Service: Phone.com
Phone.com is our top choice for small business phone numbers because of all the features it offers for small businesses and it's fair pricing.
Start a Pub in your State
- District of Columbia
- New Hampshire
- New Jersey
- New Mexico
- New York
- North Carolina
- North Dakota
- Rhode Island
- South Carolina
- South Dakota
- West Virginia
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Is this Business Right For You?
Anyone who enjoys food, beverages, and other people may be well-suited for owning a pub business. A passion for food and beverages will help when creating and preparing menu offerings. Being a people-person is important because pubs are in the business of serving patrons.
Want to know if you are cut out to be an entrepreneur?
Take our Entrepreneurship Quiz to find out!
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.
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.
Take the Next Step
Find a business mentor
One of the greatest resources an entrepreneur can have is quality mentorship. As you start planning your business, connect with a free business resource near you to get the help you need.
Having a support network in place to turn to during tough times is a major factor of success for new business owners.
Learn from other business owners
Want to learn more about starting a business from entrepreneurs themselves? Visit Startup Savant’s startup founder series to gain entrepreneurial insights, lessons, and advice from founders themselves.
Resources to Help Women in Business
There are many resources out there specifically for women entrepreneurs. We’ve gathered necessary and useful information to help you succeed both professionally and personally:
If you’re a woman looking for some guidance in entrepreneurship, check out this great new series Women in Business created by the women of our partner Startup Savant.
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.