What a UK bar really costs to run each month, and where your break-even sits
By Jack Hawkins · Updated
A small London cocktail bar runs roughly £34,000-£79,000 a month in fixed and semi-fixed costs in this illustrative cost-stack scenario, before ingredient cost; a regional wet-led pub more like £13,400-£33,000. Break-even net revenue is fixed costs divided by contribution margin after variable costs: a £25,000 fixed-cost scenario at 60% contribution needs £41,666.67 net a month. At 20% VAT, that is £50,000 gross receipts. Convert to weekly figures on a consistent annual/calendar basis before comparing a rota. These are illustrative planning bands, not audited figures, but the arithmetic that turns them into your number is exact.
The reason operators should care about the structure more than the totals: fixed costs are a lever you pulled years ago (the lease), but the margin that divides them is a lever you pull every week, and the break-even ratio tells you which of your problems are actually solvable.
The cost stack, with honest ranges
Monthly, for a single-site venue, ex-VAT, 2026 trade-estimate bands. Your lease and postcode move everything; the shape holds.
| Cost line | Small regional bar | London cocktail bar | What actually drives it |
|---|---|---|---|
| Rent + rates | £4k-£10k | £12k-£30k | The lease you signed, revaluation you didn't |
| Labour (incl. NI, pension) | £6k-£14k | £14k-£28k | Hours, not just rate; see the labour guide |
| Utilities | £1.2k-£3k | £2.5k-£6k | Cellar cooling and extraction; fixed by plant, moved by habits |
| COGS (at ~60% GM on wet sales) | variable | variable | Your pour cost in pounds |
| Insurance + licences + PRS/PPL | £500-£1.5k | £1k-£3k | Activity declaration, music use, public liability market |
| Distribution / merchant / POS | £600-£1.5k | £1.5k-£4k | Separate fixed subscriptions from variable merchant fees before computing contribution |
| Maintenance, cleaning, security | £800-£2k | £2k-£5k | Age of kit, tillage of weekends, door policy |
| Marketing, events, misc | £300-£1k | £1k-£3k | The line that funds itself or doesn't exist |
Two lines carry the venue: rent-and-rates and labour together are usually a substantial share of the modelled cost stack; calculate the actual share rather than assuming one national percentage. Everything else is worth managing but rarely decides survival.
Break-even in one line you can do on a napkin
Break-even net revenue = fixed costs ÷ contribution margin after all variable costs.
A venue with £22,000 fixed costs and a 60% contribution margin in this simplified example breaks even at £36,700 a month. The two readings matter more than the number:
At 58% instead of 60%, the same venue needs £37,931. Two points of margin, £1,264 a month of sales. That's why pricing and pour cost pages are survival documents, not accounting hobby.
And the ratio inverts the other way: a venue at 85% of break-even doesn't have a 15% problem, it has a cash-burn problem with a calendar attached. The gap between 85% and 100% is exactly where leases get renegotiated badly, because negotiating from 105% is a different conversation than negotiating from 85%. Know which one you're having, monthly, before the landlord does.
The lines people forget to write down
NI thresholds moved the labour line for every venue with salaried managers; the employer auto-enrolment minimum is generally 3% of qualifying earnings for eligible workers under the relevant scheme basis, rather than automatically 3% of every wage pound. Business rates revaluations land quietly and can outrun a year of price increases. Music licensing (PRS/PPL) scales with what you actually do, and "we just have the radio on" is not the exemption people think it is. Card processing at 1.5-2.5% of a wet-led turnover is a five-figure annual line at volume, and check the contract and notices rather than relying on last year's effective rate.
None of these is exotic. All of them are the difference between a break-even number that's real and one that's wishful.
What to do with the ratio
Compute break-even revenue monthly from the same numbers you use for the weekly review. Then track break-even coverage: net revenue for the same monthly period ÷ that month's break-even, as a percentage. Above ~110%, you're trading. 95-110%, you're managing. Below 90% for two consecutive months, you have a lease conversation, a pricing move, or a hours-and-trim decision, and the third is the one you can execute by Tuesday.
The ratio's real virtue is that it converts arguments. Staffing debates, "should we do a weekday offer", the third fridge, whether Friday's extra two bar staff pay: every one becomes "does this raise coverage more than it raises fixed costs". Venues without the ratio decide by volume of opinion.
Build the contribution denominator
If ingredients take 35% of net sales and genuinely variable merchant and packaging costs take another 3%, contribution margin is 62%, before fixed labour and rent. Use £22,000 ÷ 0.62 for that model rather than borrowing an ingredient gross-margin percentage. Treat stepped labour separately: a busier service might require another paid shift, which changes the fixed-cost scenario. Keep all costs and revenue on the same period. Divide annual subscriptions by twelve for a monthly model; convert weekly wages using the actual calendar or a consistent annual basis. Profit break-even and cash break-even can differ when loan repayments, deposits or tax settlements fall due.
FAQ
What are the biggest running costs for a UK bar? Rent, business rates and labour including NI and pension can dominate the venue cost stack, which is why both the lease and the rota, not the lemonade invoice, decide most venue economics.
How do I calculate my bar's break-even? Sum monthly fixed costs and divide by contribution margin after all variable costs as a decimal. If the only variable cost modelled is ingredients, state that simplification. £22,000 fixed at 60% margin: £36,700 monthly net revenue. Every point of margin you gain lowers the number; the calculator on the profit page runs drink-level versions.
What's a normal gross margin for a bar? A 55–65% ingredient GP range is an illustrative planning band, with the actual blend depending on product mix and buying terms. Trade-estimate bands, October 2026. Your blended number depends on the category mix, which is exactly what the weekly review should show you.
Is food worth adding to fix the numbers? Sometimes. Food usually lowers blended margin (kitchen cost vs 20p lemonade) while raising spend per head and dwell. Model it on the break-even line: £3,000 a week of food at 45% margin must beat the drinks-and-turnover it displaces, or it's a hobby with a dishwasher.
Method and assumptions
Cost bands are trade estimates presented as illustrative planning scenarios, labelled indicative; they are not audited averages and no claim is made about typical venues. VAT, NI and rates references follow published UK rules as at 16 October 2026. Worked examples illustrative. See data standards.
Last reviewed 19 October 2026.