As with starting any business venture, setting up a micropub takes a lot of effort and a lot of time.
There’s added complications too, like needing an alcohol licence and having to explain the micropub concept to potential investors and the community.
However, this hasn’t stopped hundreds of micropubs springing up in former shops, cafes and other quirky buildings across the UK in the last few years. All in a time when the number of traditional pubs continues to drop.
Starting a micropub
Although I haven’t set up a micropub myself, I’ve been lucky enough to get to know a few people who have either started a micropub or are on their way to opening one.
And, while there’s no definitive blueprint for moving from the initial idea to tapping your first cask, there is a set of common steps that micropublicans move through to set up a micropub.
Setting up a micropub checklist
Here are the main steps to setting up a micropub in England and Wales, which you can use as a guide to get started.
If you’re starting a micropub in Scotland or Northern Ireland, bear in mind the process may be different due to differences in the law. There are also quite a lot of differences between local authorities.
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Decide if running a micropub is for you
Before you spend any money or invest a big chunk of time into your new venture, it’s worth making sure you’re cut out for the demands that come with running your own business.
For instance, are you:
- Willing to learn the skills you need?
- Comfortable working unsociable and potentially long hours?
- Happy to risk all or part of your investment?
Before you take the plunge, get out there and speak to as many micropub and pub owners as you can to find out about their experiences.
Keep a record of business transactions
Remember that you can deduct most of your business expenses from your profit so you pay less tax at the end of the year.
So keep a record of your business expenses from the get go.
Get a licensing qualification and personal licence
To sell alcohol from a licensed premises, you or a member of staff must have a personal licence so there is at least one Designated Premises Supervisor (DPS) associated with your micropub.
A personal licence doesn’t tie you to a particular location. So you can get one before you find a suitable premises for your micropub.
You apply for a personal licence through your local authority. If this is your first licence and you don’t already hold a licensing qualification, you’ll need to get a Level 2 Award for Personal Licence Holders (APLH) qualification from an accredited provider before you apply.
If you’ve never worked in the pub industry or you’re inexperienced, it’s best to get experience working a bar and storing, serving and caring for beer and other drinks.
For example, you could volunteer at beer festivals or do some part-time work in another micropub or bar. This will also give the opportunity to network with other publicans and breweries and speak with the types of people you’ll want to attract to your own micropub.
Write a micropub business plan (and keep it updated)
A business plan is a detailed document that describes your prospective business. It includes your goals and how you plan to achieve them as well as your sales and financial forecasts.
Writing a business plan is a lot of work, but it helps you clarify your ideas, research your market, spot potential issues, set objectives and measure your progress.
A business plan is essential for attracting and securing finance. It can also help you get support from potential customers and suppliers.
You’ll need to amend your business plan as you go along and then keep it updated after you open.
Once you’ve starting putting your business plan together, you’ll have a better idea of how much it will cost to set up your micropub and whether or not you’ll need any additional finance.
Investors could include:
- Bank loan
- Family and friends
- Crowdfunding – raising small amounts of cash through many people
- Business grants
- Government start up loan
- Angel investment – when someone invests in your business in a return for a stake in it
If you’re self-financing your micropub, it’s still useful to approach investors initially as they can give you feedback on the viability of your business plan.
Register your business
Most people register their micropub business as a sole trader, partnership or limited company.
Registering as a sole trader or partnership (when two or more people share responsibility for the business) with HMRC is relatively simple. Once you’ve registered, you’ll need to complete a tax return every year. You can do this yourself or get help from an accountant.
The main advantages of registering as a limited company are that you’ll probably pay less tax and you (and your business partners) won’t be personally liable for any losses your business makes. However, setting up and running the admin side of a limited company is more complicated and costly than sole trader or partnership registration. And while it’s possible to do it yourself, it’s better to get help from someone like an accountant or solicitor.
If you’re a sole trader or partnership, you need to register with HMRC by 5 October in the year following the tax year you start trading (the tax year runs from 6 April to 5 April). For a limited company, you need to register within three months of starting trading.
Open a business bank account
Having a separate bank account for your business keeps your business transactions separate from your personal finances.
You’ll also find it easier to manage cashflow and do your tax return.
If you set up as a limited company, you must have a business bank account.
Find suitable premises
Once you’ve got your personal licence, got some experience in the trade and drafted a business plan, you’ll be in a good position to start looking for a suitable location for your micropub.
Most micropubs are in rented commercial spaces, usually small shops or cafes.
Don’t worry about having your business plan finished or finance in place before you start looking for a premises. The process can take a long time, even once you’ve found a suitable location.
And don’t worry about having to commit to a long lease before you have a licence or planning permission (see below) – many landlords won’t expect you to commit before everything’s in place and you can agree with them only to sign the lease once you have the required permissions.
Some things to look out for when considering properties:
- Compatibility with neighbouring properties and businesses
- Size – more space means more potential customers but higher rent and higher business rates
- Footfall, proximity to residential areas and housing and demographics of local people
- Length of lease
- Facilities – is there already a toilet (or space for a toilet), for example?
Make sure you get legal advice before you sign any agreements.
Get licensing advice
You usually apply for a premises licence through the local authority or council the premises is located in.
The licensing department may be able to give you informal advice before you apply. So contact them as soon as you’ve found a suitable location.
Get planning advice
Unless your prospective premises is already a pub or bar, you’ll likely need planning permission to change the use of the building so you can sell alcohol for consumption on site.
Most local authorities can provide informal advice (fees may apply) before you make a formal application for planning permission. This will give you an idea of what changes you’ll need to make (for example, soundproofing, disabled access or fire safety modifications) and what your chances are of getting planning permission.
You may also need planning permission for any major modifications to the building (see below) and to put up signage that’s viewable from the street.
It’s likely that you’ll need to make at least some modifications to the premises to convert it into a micropub. Get quotes and advice from tradespeople early on so you can get an idea of costs and your options.
Most modifications, including jobs like installing new electrics or plumbing, will need building regulations approval. However, some tradespeople are authorised to self-certify their work.
Contact a local authority or private BCB (Building Control Body) to see whether your planned modifications will need approval.
BCBs are responsible for checking building work to make sure it meets regulations. They can approve the work once complete.
Apply for a premises licence
Once you’ve got your personal licence and found a suitable premises and you’re reasonably confident you’ll get planning permission and building regulations approval, it’s a good time to apply for a premises licence to sell alcohol.
These can take a long time to process and issue, even when there are no objections. So it’s best to apply as soon as possible.
It’s also a good idea to get people to write to the local authority to support your application (this is called a ‘representation’). Your local authority’s licensing team can tell you how to do this.
Apply for planning permission
Once you know what modifications you’ll make to the premises you can apply for planning permission.
Where applicable, you’ll need planning permission for any modifications you make before you start the work.
Register with environmental health
Businesses that make or prepare food must register with their local authority’s environmental health service at least 28 days before opening.
Some local authorities won’t need you to register if you’re not serving food. But it’s worth doing anyway – registration is free and you can get help and advice on starting up.
Your local authority’s environmental health service will also help you organise waste and recycling collection, if needed.
Make modifications and get building regulations approval
When to start making modifications to the premises will depend on what agreement you have with the landlord and your circumstances regarding the premises licence and planning permission.
For instance, your landlord might not let you make modifications until you’ve signed the lease. Or you might not want to spend money and time making modifications before the local authority grants you a licence.
You can start and complete the modifications before you get building regulations approval as long as you follow building regulations guidance. Your BCB can advise which type of application you should submit to get sign off once the work is done.
You’ll need public liability insurance and insurance for your equipment, stock and the cash you keep on the premises. If you employ staff, you’ll need employers’ liability insurance.
You can also insure against having to close your micropub temporarily because of circumstances out of your control.
Depending on your lease, you may need buildings insurance too.
Sign the lease
It’s usually best to wait until you have a premises licence and planning permission before you sign your lease.
Make sure you get legal advice before you sign it.
Don’t forget to put the gas, electric and water in you or your business’s name when you get the keys.
You might also want to arrange a phone line and broadband.
To save cash, look out for second-hand furniture from auction websites and classifieds.
You could also build your own benches out of used pallets (which are useful for storing empty casks underneath), use cushions to turn empty casks into seating and use industrial items such as wooden cable drums as tables.
Source micropub equipment
Equipment-wise, your shopping list for your micropub might include:
- Refrigeration and cooling systems/cask jackets
- Stillage and taps
- Pegs, spiles and a mallet
- Hand pumps/beer engines
- Glass washer
- Ice bin
- Bottle openers
- Paper towels and soap
- Cleaning equipment
- Plenty of pens
- First aid kit
- Fire safety equipment (see below)
Come up with a process for taking cash and monitoring stock
You need some way of keeping track of sales and recording transactions.
This could be a manual system using a cash float and a basic till or cash box. Or an electronic point-of-sale system for small businesses that runs through, say, a tablet or PC.
Do a fire risk assessment
Your local authority looks at fire safety as part of planning applications and building regulations approval. But you still need carry out a regular fire risk assessment for your micropub.
This looks at possible fire hazards and ways to reduce the risk of fire. As part of it, you’ll also need to provide an emergency plan and review you and any staff members’ training needs.
Get first aid training
First aid knowledge is useful if someone in your micropub falls ill or has an accident.
Health and safety risk assessment
It’s law that you do a health and safety risk assessment, even if you don’t employ anybody.
Well, duh. Many micropub owners like to buy stock directly from small breweries and suppliers. There are also wholesale suppliers that may be helpful for sourcing stock from further afield.
If you’re struggling to source snacks and generic products from local suppliers, it’s worth getting an account with your local cash and carry store.
Marketing your micropub doesn’t need to be expensive. Initially, you could:
- Set up a simple one or two page website or Facebook page
- Contact local press and media
- Connect with influential people who will support your micropub, such as councillors and local trade groups
- Contact your local branch of the Campaign for Real Ale (CAMRA)
- Add a business listing to Google Maps
- Do a leaflet drop or give out leaflets in relevant locations
- Join relevant groups on Facebook and participate in Twitter chats
- Set up a promotional stall at events and markets
- Place ads in local publications or targeted ads on Facebook
- Advertise on local radio
- Put a sign on the pavement (you may need a licence for this)
- Plan a launch event
Other things you may need to consider
- VAT registration – needed if your yearly VAT taxable turnover (everything you sell that isn’t VAT exempt) exceeds £85,000
- Staff – among other things, you’ll need to register as an employer with HMRC and may need to provide them a pension scheme depending on their age and how much you pay them
- Music licence – you’ll need this is you want to play background music or have live music during certain time periods
- CCTV licence – needed if you have CCTV
- Apply for business rate relief – if your micropub qualifies for discounted business rates, you’ll need to apply for this through your local authority
Over to you
What steps are you taking to start your micropub? Are there any important steps missing in this checklist?
Leave a comment below to share your experiences.
A big thank you to the following people for their help in compiling this checklist: