Money that you take from the business to cover your own personal living expenses is known as 'Drawings'. This should not be included here, but is dealt with elsewhere in the cash flow.
Depending on the size of the business you intend to operate, you may be thinking of working alone, or employing extra staff. Before you can make an estimate of the wages you will pay each month to your employees you will need to identify the work that must be done and how many people will be needed to do it.
You may need staff to:
- answer the phone, make bookings and deal with other customer enquiries
- carry out welding, rust proofing and general body repair work
- carry out servicing and mechanical repair work
- undertake restoration work
- order parts, consumables, lubricants and so on
- keep the business records and do other administrative jobs
The wages you pay your staff will depend to some extent on what is the going rate in your area. The Annual Survey of Hours and Earnings (ASHE), which is carried out by the government, gives average weekly wages (national and regional) for a wide range of different types of job. The Survey is available online on the Office for National Statistics (ONS) website.
- you could use a combination of full and part-time staff
- you might benefit by taking on and training apprentices - more about motor industry apprenticeships is available on the Institute of the Motor Industry (IMI) website
- your employees will need to be properly trained in safe working practices, such as working safely with flammable substances and using vehicle lifts
- you will need to provide employees with appropriate protective and safety equipment where necessary - for example dust masks and ear defenders for use when sanding, and gloves to use when handling potentially harmful substances
- the National Minimum Wage Act sets a minimum amount that you must pay your staff. Workers aged 25 and over receive a Living Wage premium on top of the standard National Minimum Wage
- there is employment legislation that you should be aware of
- you will have to pay employer's National Insurance Contributions (NICs) and you will have to operate PAYE in 'real time'. You may have to make employers' minimum contributions to an auto-enrolment pension scheme too
In the cash flow, just put the amounts you will actually pay to staff after you have deducted NICs and PAYE - you will show these separately. Also include here the cost of staff pensions.