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 will be dealt with elsewhere in the cash flow.
Depending on the nature and size of your proposed business you may well be intending to work alone, for example as an owner driver, or you might have decided that you will need to employ staff.
Before you can make an estimate of the wages you will pay each month to any employees you have, 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:
- drive delivery vehicle/s
- answer the telephone and advise customers
- organise delivery routes and provide collection/drop off details for drivers
- work out estimates for delivery jobs
- keep the business records
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 could if necessary pass on some driving and delivery work to owner-driver sub-contractors
- it might be possible to employ a spouse or partner to do administrative jobs like answering the phone and keeping records
- 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. You should also include here the cost of staff pensions.