Pub Feasibility Study: The Real 2026 Guide

Last updated: 11 April 2026

Most people who think they want to buy a pub have never actually looked at one’s P&L statement. They see the busy Saturday night, smell the real ale, imagine themselves behind the bar, and miss the fact that the previous landlord left because the numbers don’t work. A proper pub feasibility study isn’t a box-ticking exercise — it’s the difference between building a sustainable business and losing your life savings in 18 months.

I’ve evaluated pubs from refurbished community locals to food-focused venues across the North East, and I can tell you that every single one that failed had skipped or rushed the feasibility phase. A feasibility study forces you to answer hard questions: Can this location actually generate the turnover needed to cover rent, labour, and utilities? What are the real margins on this style of trading? Who is your actual customer, and will they come back? When you’re looking to borrow £50,000 to £200,000, lenders will demand answers too.

This guide walks you through a real-world feasibility study framework — the same approach that works whether you’re buying a tied pub from a pubco, taking on a freehold community local, or converting a premises licence for a new concept. You’ll learn what data you actually need, how to build a financial model that banks will take seriously, and the operational realities that spreadsheets often miss.

What a Pub Feasibility Study Actually Is

A feasibility study is a structured investigation into whether a specific pub business can operate profitably. It’s not a business plan — that comes after. It’s not a market report — that’s too broad. A feasibility study is a focused, data-driven assessment of one property, one location, and one trading model.

The most effective way to validate a pub opportunity is to separate emotional attachment from financial reality by testing four core areas: market demand, financial viability, operational fit, and competitive position. You need to know if people will actually come, if the numbers work, if you can run it efficiently, and if you can compete on your chosen terms.

The study answers these specific questions:

• Is there genuine demand for this type of venue in this location?
• What is the realistic annual turnover, and how certain is that forecast?
• What will it actually cost to run — not the theoretical cost, the real cost?
• Will cash flow work month by month, or will you hit a wall in October?
• What’s your recovery timeline if trading dips 20 percent below forecast?

A feasibility study typically costs £2,000–£6,000 if you hire someone, or you can run one yourself if you’re willing to spend 6–8 weeks on structured research. Most lenders will want to see one before they’ll consider lending, and pubcos often have requirements about what they’ll accept.

Market Assessment and Location Analysis

Location is not destiny in the pub trade, but it’s the constraint you can’t change. A poor location can’t be rescued by good management; a good location can be destroyed by bad management. Your market assessment must answer: Is there a viable customer base here?

Footfall and Demographic Analysis

Count the foot traffic genuinely passing the door, not the cars driving past. Spend multiple days at different times — weekday lunchtime, Friday evening, Sunday afternoon. Note who stops, who doesn’t, and why. At Teal Farm Pub in Washington, Tyne & Wear, we can see exactly who comes in for quiz nights, who shows up for Saturday sports, and who drives straight past because they don’t know we’re there. That real-world observation beats demographic reports.

Check the local population density, age breakdown, and income levels using Office for National Statistics census data. If your location is surrounded by postcodes with high unemployment and low disposable income, be honest about what that means for your average spend per head.

Competitive Landscape

Map every pub, bar, and licensed venue within a 500-meter radius. Don’t assume they’re competition — some will be. Visit them at peak times. Sit at the bar. Check their pricing, their food offering, their staff experience, their music. Talk to the landlord if they’re friendly. Understand what they’re doing well and what they’re failing at.

A location saturated with four other wet-led pubs means you need either a differentiation (food-led pivot, events focus, specific clientele) or a compelling reason why you’ll take their customers. Generic won’t work.

Planning and Licensing Context

Check the local authority licensing register for premises licence history. How many times has it changed hands? Has it been suspended? Talk to the licensing officer — they’ll tell you if there are noise complaints, antisocial behaviour patterns, or restrictions that might affect your model. Review planning history for the premises and surrounding area. New student housing nearby is very different from a planned retirement community.

If you’re taking on a tied pub, contact the pubco directly about their expectations, supply agreements, and the relationship history with the current licensee. This is covered more in free of tie pub guidance, but it’s critical at the feasibility stage.

Financial Modelling for Pubs

This is where most first-time buyers make their fatal error. They assume that if a pub takes £3,000 per week, they’ll have £3,000 of profit to work with. In reality, you’ll spend £1,200–£1,500 on cost of goods, £800–£1,200 on labour, £300–£500 on overheads, and you’re left with £300–£500. That’s before your own wages or loan repayments.

The real cost of an EPOS system is not the monthly fee but the staff training time and the lost sales during the first two weeks of use — a reality that most feasibility models ignore completely. The same applies to every operational system you install: it costs in setup, training, and temporary lost efficiency.

Revenue Forecasting

Don’t guess turnover. Build it from the ground up using verified data:

• Capacity analysis: How many covers can you serve per session? At what average spend? Wet-led pubs typically see 40–80 covers on a quiet evening, 150–300 on peak nights. Gastro pubs can hit higher covers but require kitchen capacity.
• Historical data: If the pub is currently trading, get access to bank statements or P&L records for the last 2–3 years. If not available, that’s a red flag.
• Seasonal adjustment: Pubs have distinct seasonal patterns. Summer is slower in many locations. December is busier. January to March are brutal. Your forecast must show month-by-month turnover, not an average.
• Contingency: Most first-time operators forecast a 10–15 percent uplift from the previous trading. That’s optimistic. Assume you’ll hit 90 percent of historical turnover in Year 1, then gradually improve.

Use pub profit margin calculator tools to test your assumptions, but remember they’re only as good as your input data. Better to be conservative and be pleasantly surprised than the opposite.

Cost of Goods Sold (COGS)

This varies dramatically by trading model. Wet-led pubs (primarily drinks) typically run 28–35 percent COGS. Food-led pubs can be 30–40 percent. Pubs with both need to calculate weighted average.

Get actual prices from your tied or free supplier. Don’t assume. A case of draught lager costs different amounts depending on volume, contract terms, and whether you’re forced to buy from the pubco. For wet-led pubs with no food, you might think COGS is simple — it’s not. Wastage, spillage, staff training mistakes, and unrecorded consumption typically add 2–4 percent on top of what your till says.

Labour Costs

This is where most feasibility studies break down. Operators think: “I’ll work the bar myself and hire two part-timers.” Then reality hits. You can’t be there every shift. You get ill. You need a day off. Pub staffing isn’t optional coverage — it’s minimum legal requirement plus the people you actually need to deliver service.

Managing 17 staff across FOH and kitchen using real scheduling and stock management systems daily has taught me that labour is your largest controllable cost, and it must be budgeted at 28–35 percent of turnover for most pubs. Use pub staffing cost calculator to work out realistic wage bills including employer’s NI, pension contributions, and training time. Don’t forget that a statutory sick day at minimum wage is still a shift you have to cover.

For food operations, add a head chef and kitchen porter to your baseline staffing. For events (quiz nights, sports screening, live music), add extra cover. This isn’t optional; it’s the minimum that works.

Fixed Overheads

Create a line item for every monthly cost:

• Rent or mortgage
• Utilities (gas, electricity, water — typically £400–£700/month for a standard pub)
• Business rates
• Insurance (landlord, public liability, employer’s liability)
• Maintenance and repairs (budget 5 percent of turnover as a contingency)
• Pub IT solutions (EPOS, WiFi, systems — £50–£150/month)
• Licensing fees and renewals
• Cleaning and laundry
• Marketing and local promotion
• Professional fees (accountant, payroll)

Most of these are fixed — they don’t change if turnover drops 20 percent. That’s why downside scenario modelling is critical.

Three Scenario Model

Build three versions: optimistic (revenue 10 percent above historical), realistic (revenue equal to historical, adjusted for your improvements), and pessimistic (revenue 20 percent below historical). Run the numbers for each. The pessimistic case shows you your survival point. If the pub can’t make an operating profit in the pessimistic scenario, you’re taking on unmanageable risk.

Operational Reality Check

A spreadsheet can show profit. Reality can destroy it in weeks if you’ve missed something operational.

Can You Actually Deliver the Service?

If your model assumes a food operation but there’s no kitchen extraction or the kitchen is too small, the numbers are fiction. If you’re planning live music events but the premises licence doesn’t allow it, you’ve built on sand. Check physical constraints against your trading model.

When selecting an EPOS system for Teal Farm Pub, the key test was performance during peak trading — specifically a Saturday night with a full house, card-only payments, kitchen tickets, and bar tabs running simultaneously. Most systems that look good in a demo struggle when three staff are hitting the same terminal during last orders. That’s operational reality. Your feasibility study must test whether your chosen systems (EPOS, stock management, booking system) can actually handle your peak scenario.

Staffing Reality

Don’t assume you’ll find good staff easily or that you’ll be able to keep them. Hospitality turnover is brutal. Budget for continuous recruitment, training, and mistakes from new people. A proper pub onboarding training programme costs time and money upfront but saves vastly more in damaged service and customer loss.

Supply Chain and Tied Agreements

If the pub is tied to a pubco, your margins are predetermined by their supply prices. Model this explicitly. A pint of draught that might cost you £0.85 from a free supplier could cost £1.10 from a pubco. That’s a 23 percent price difference that destroys your margin. This is absolutely essential if you’re evaluating a tied opportunity — know your actual COGS before you commit.

For free of tie pubs, verify your supply routes. Can you get what you need at competitive prices? Are there minimum order quantities or payment terms that affect cash flow?

Tied Pub vs Free of Tie Considerations

The ownership structure changes your feasibility study fundamentally.

Tied Pubs

With a tied pub, you lease the property and are forced to buy stock from the pubco. Rent is usually lower, but margins are lower too. Your feasibility model must include:

• Exact pubco supply prices (not estimates)
• Tie length and break clauses
• Margin requirements — some pubcos have targets for turnover
• Support you’ll actually receive (training, marketing, systems access)
• What happens if you breach the tie or if the pubco fails

Tied pub tenants need to check pubco compatibility before purchasing any EPOS system or making major operational commitments. Not all systems integrate with all pubcos. This is a blocking factor you must verify before signing anything.

Free of Tie Pubs

You own or have a longer lease, and you choose your suppliers. Margins are usually higher, but you’re responsible for all relationships, supply terms, and cash flow management. Your feasibility study must prove you can:

• Access competitive supply at reasonable minimum orders
• Manage supplier relationships and negotiate terms
• Maintain consistent quality across suppliers
• Handle payment terms and cash flow timing

Read more about free of tie pub options if you’re considering that structure.

How to Conduct Your Own Feasibility Study

Week 1–2: Data Gathering

Collect everything available: historical financial records, current trading performance, planning documents, premises licence, staff structure, supplier invoices, local demographic data, footfall counts, and competitive analysis. Visit at multiple times. Talk to current staff if possible. Observe customer patterns.

Week 3–4: Financial Modelling

Build your three-scenario spreadsheet. Include month-by-month cash flow, not just annual profit. Model your opening month (slower, higher training costs) differently from steady state. Calculate your break-even turnover — what weekly revenue do you actually need?

Week 5–6: Operational Validation

Test your assumptions against real constraints. Can you physically deliver your service model? Have you priced in the systems and training you’ll need? Will your staffing plan work with realistic pay rates in your location? Use pub management software or even spreadsheets to model peak service scenarios.

Week 7–8: Sensitivity Analysis and Presentation

Test what happens if key assumptions change: turnover drops 15 percent, rent increases 10 percent, one key staff member leaves, utilities cost 20 percent more. Build a one-page summary showing financial viability, key risks, and your confidence level in the forecast. This is what you’ll show lenders.

A feasibility study’s core output is not a forecast of perfection — it’s proof that you’ve done the homework and that the business is viable even if things don’t go exactly as planned.

For more information, visit pub profit margin calculator.

For more information, visit pub drink pricing calculator.

For more information, visit pub staffing cost calculator.