Martyn Hillier didn't want to be a landlord. When he was told that he could turn his off-licence in the Kentish village of Herne into a pub, the 51-year-old was taken aback. "I thought: 'Pub? No, not for me,'" he says. "I never, ever wanted to run a pub."

But Hillier thought it over and changed his mind, and in the process he may have created a new model for the pub business, one that is already proving influential across the country.

Hillier's pub is far from the average. There's no music, no lager, no jukeboxes, fruit machines or gastropub food. Most importantly of all, it's tiny – it has to be; it used to be the village butcher's shop. He calls it a micropub.

"There are loads of things in ordinary pubs that you just don't need," he says. "When I thought about owning a pub, it was that image that I had in my mind. Then, I thought: 'Wait a minute – this is going to be my pub, so the beer will be great, there'll be no lager and there'll be no smoking'."

That was before the smoking ban in pubs was enforced in 2007, but it was another piece of legislation that was vital in helping Hillier and those who have followed him in setting up pubs. In 2003, the licensing act (which took effect in 2005) was passed. It made it far easier to open a pub, and Hillier was one of the first to realise the potential.

"There are only four reasons why someone can object to you getting one: health and safety, law and order, protection of children and you've got to have been a good boy in the past. Had I tried to get a licence before, the big brewery pub opposite me and the other big multinational-owned pub across the road would have come along with their barristers and solicitors and stopped it – but now they can't."

Hillier's pub was an immediate success, winning the Campaign for Real Ale's East Kent pub of the year on two occasions. But it was at Camra's AGM in Eastbourne in April 2009, when he gave a presentation on how easy it was to set up your own pub, that the idea really began to take hold. In the audience was Pete Morgan, a Hartlepool man who had just found out he was about to lose his job. Hillier's idea immediately appealed to him. "At the end of his 15-minute presentation, I turned to my girlfriend and I said: 'I'm doing it,'" he says. "She said: 'Don't be stupid.' But that's how good an idea I thought it was. Within two hours of him finishing talking I knew where I was going to have the pub and what I would call it. There was no stopping me. There was no reason to stop me; it just seemed like such a brilliant idea."

Just over six months after hearing Hillier's speech, Morgan was the landlord of the Rat Race, a micropub based in a room at Hartlepool Railway Station that has been, at various points in its existence, a waiting room, a taxi company office and a newsagent.

Morgan's vision is, in its own way, the most perfect illustration of what a micropub is. Like the Butcher's Arms, the focus is on good quality cask ales and conversation.

"It's pretty small and pretty basic," he says. "But that's not a bad thing – that's the point. We haven't got any of the unnecessary stuff that most pubs are full of. The big difference between my pub and virtually every other pub in Hartlepool is that people talk to strangers. Because its small and everyone is facing each other, you get conversations starting between people who don't know each other. It's the way pubs used to be, but sadly it's not the way they are nowadays."

The same is true of another micro- pub that was inspired by Hillier's speech, Just Beer in Newark, Nottinghamshire. Set up by four friends, it demonstrates just how simple a concept this is. "You could conceivably have one in your front room if all the other considerations are dealt with," says Duncan Neil, one of the four. "And once you're up and running, you're not dealing with much outside of looking after your beer. As long as you've got enough people to make it a viable business, that's it, really."

And it's cheap, too. Just Beer cost £30,000 to get off the ground, while the Rat Race absorbed £10,000 of Morgan's money. The Butcher's Arms was the cheapest of the lot (£2,000), but Hillier already had a lot of the equipment as it had been an off-licence.

That is perhaps the key difference between pre-Licensing Act and afterwards: under the old legislation, you could have spent as much on legal fees as Morgan did on the whole project.

Before 2005, it would have cost you £12,000, £15,000 and you still wouldn't have guaranteed yourself a licence," says Hillier.

"We had a bloke in the pub who had tried to convert an antique shop – it took him 18 months and £12,000 because people kept objecting; all the pubs in the area were objecting. Now they can't. It's simple now."

The financial advantage of setting up a micropub as opposed to taking over a traditional pub is clear, says Morgan. He believes huge amounts of money are wasted on pubs that have no long-term prospects. "For me, what's crazy about normal pubs is the amount of money that's getting shovelled into putting stuff in that people really don't care about," he says. "You'll get youngsters who want the latest, greatest, trendiest place, but as soon as somewhere better down the road opens, it's not trendy any more. "

The micropub's emergence comes at a very interesting time for the British brewing industry. Another of the last government's actions was the introduction of small brewers' relief, whereby those brewers who produced less than a certain amount paid less tax. The impact has been dramatic: there are now almost 800 breweries operating in the UK. Hillier believes the microbreweries' products are a natural fit for a micropub. "The biggest problem new breweries have got is: where do they sell their beer?" he says. "If they sell it to the big boys, they want to pay nothing for it and pay you three months later, or you sell it to free houses – well, these days all they seem to be interested in is food. For every microbrewery, there should be 10 micropubs."

One day there may be. For the moment there is a handful, although Hillier says he knows of four or five new ventures that should be open shortly. Kent appears to be the epicentre, with another in the county (the Conquerer in Ramsgate) already open and more on the way. For Hillier, it's a heartening trend. He says anyone dissatisfied with their local should take action – and open a micropub.

"It's for the person who can't find a decent pint of beer," he says. "They see that the shop in the village is shut and they think: 'Let's convert that.' For the sake of a cooler, some stillage, some glasses and some tables and chairs, you're there. It can bring villages; towns back to life again where the pub has been shut."

Five steps to becoming micropub landlord

1. Find a site. Old shops are perfect. The Butcher's Arms is, naturally enough, based in an old butcher's. You don't need a great deal of space: 6mx4m for the entire site (including cellaring) is plenty. Low rent is also key. "It's all about low overheads," says Duncan Neil of the Just Beer micropub. "You have everything on a small scale so that you don't need the same amount of business as a normal pub to allow you to operate."

2. Negotiate the licensing process. The Licensing Act of 2003 has made this far easier (although there's more paperwork now), but since licensing is now a matter for local councils rather than the courts, your chance of success will depend on where you are in the country. You'll need two licences: a personal and a premises licence.

3. Buy your equipment. Micropubs sell ale and little else. Most of what you need can be found on auction websites, as Pete Morgan of the Rat Race in Hartlepool discovered. "All the furniture I bought from eBay," he says. "Anything I could buy from eBay, I did. My hand pumps were from eBay, my stillages [on which beer casks stand] were eBay."

4. Decide on opening hours and which beers to sell. If you want to open at 3pm and close at 8pm, you can – as long as you can make it work financially.You are not going to be a millionaire if you open one of these," says Martyn Hillier of the Butcher's Arms, "but you certainly get a better quality of lifestyle." Equally, Britain is now full of microbrewers itching to get their beer in pubs.