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.
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:
- prepare and cook food
- wait at tables
- set out and clear up
- wash dishes
- serve drinks from a bar
- answer phone queries, take bookings, keep business records and do other administrative jobs
- advise customers. It is important that staff dealing with customers know enough about the catering business to be able to make suggestions that are appropriate to the client's budget and venue requirements
- co-ordinate bookings with other businesses. You may decide to offer a comprehensive event-organising service, for example for weddings. Customers may book everything through you, such as limousines, flowers and so on and you would then engage local businesses to provide those extra services
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/casual staff. Part-time work - particularly in the evenings and at weekends - is often popular with students. You may find that you have to engage more staff at certain times of the year to cope with extra demand
- you could use an employment agency to get your waiting and bar staff. This would mean that you only have to pay them for the hours they work for you
- 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
- employers face substantial fines if they employ illegal workers
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.