Money which 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.
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:
- serve customers, including signing them in and out, calculating how much they should pay (or giving them a bill that automatically calculates what they owe) and helping them with any technical queries
- install software
- teach computing classes
- keep an eye on the customers to make sure that nothing untoward goes on, such as changing system files on your computers, installing viruses or spyware and so on
- maintain the computers and other hardware, such as printers, to make sure they run correctly
- provide services such as photocopying or faxing
- order disks, paper, printer cartridges and so on
- work in the kitchen - doing jobs like preparing and cooking food and keeping food preparation and storage areas clean
- serve food and drink to customers
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. Part-time work is often attractive to parents with children at school
- 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 which 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.