Industry sector:

Public house: Cash sales

'Cash sales' means all income from your main business activity which is received at the time of sale. In a pub business, this is very likely to be most or all of your business income. Although many customers will pay you in cash, remember that Cash sales also include:

  • debit and credit card payments (including contactless card payments)
  • payments made using a smartphone
  • cheques (if you accept them)
  • luncheon vouchers (remember you'll pay a service charge when the vouchers are redeemed)

To prepare your cash flow, you will need to estimate how much income you will receive over the next 12 months, including VAT. To do this you will need to work out how much beer and other alcoholic drinks, soft drinks, food and other items you are likely to sell, and at what price.

There are a number of things to consider when you make your estimates:

Type of pub

  • who will your customers be? Will you target a specific market such as families, professional people, young people or holidaymakers, or will you aim to attract a broad cross-section of locals and non-locals
  • where will the pub be located? If you go for a country pub, bear in mind that drink and drive legislation puts some customers off driving to and from the pub
  • will the pub have a garden or outside seating facility? This can be a big draw in warm weather. Since the introduction of the UK-wide smoking bans, an outdoor area has become even more important
  • how big will the pub be?

Your products and services

  • which brands of beer, wine and other alcoholic drinks will you stock
  • will you serve any food? If you decide to do so, will this consist of bar snacks or restaurant meals or both? Think about whether you will do the cooking yourself or if you will need to employ a chef
  • will you offer accommodation
  • what range of attractions will you offer - for example, amusement and quiz machines, live music, televised sport, quiz nights and so on
  • will you have a function room
  • are your sales likely to be roughly the same all year round or will you get a seasonal surge, for example, at Christmas or over the summer holidays
  • how will you monitor wastage, theft and other stock losses - these can be a real problem in the licensed trade

Pricing policy

  • what will your pricing policy be (you must be able to cover your costs, overheads and drawings)
  • how often will you review your prices
  • will you offer discounts, for example on Sunday lunches, or meals ordered before 7pm


Individual pubs face competition from a wide range of other outlets such as:

  • other pubs in the area
  • licensed restaurants, clubs and cafés
  • licensed leisure venues such as bowling alleys, cinemas and so on

Bear in mind too that many people now also prefer to watch a film or TV programme at home with drinks bought from the supermarket or off-licence rather than go to the pub.

This can make it very difficult for a pub to attract enough trade. It's vital to make sure that your business will offer that something special which will attract customers to you rather than to your competitors.

To help with your decisions, click on the checkpoints for guidance. Once you have worked out a Cash sales figure add it to the relevant field in your cash flow forecast. Don't forget to take account of the summer months and Christmas, if these will be busy times for your business.