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'll pay each month you will need to identify the work that must be done and how many people you will need to do it.
You might need staff to:
- prepare fillings, sandwiches and any other items you make yourself
- serve customers, prepare drinks and so on
- receive and process orders, for example if you offer an online, text or telephone ordering facility
- clear and clean up
- operate the till (it's quite common in food businesses to have someone on the till who does not do any food preparation, meaning that staff who prepare food don't have to touch the money)
- keep an eye on stock levels
- keep the business records and do other administrative jobs
- drive the delivery vehicle (if you decide to offer a delivery service)
- stock shelves, unload stores and generally help with a range of jobs
Think carefully about making sure you have enough staff to avoid long queues and bottlenecks, particularly at busy times of the day. Making coffees and other hot drinks, as well as preparing sandwiches, paninis and so on, can be very time consuming and staff can easily get snowed under if there's a sudden rush at lunch time. Customers are likely to be put off and go elsewhere if they see a long queue.
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 might decide to give your staff free meals and soft drinks.
- you could use a combination of full and part-time staff. Part-time work is often attractive to students and to parents with children at school. It may be particularly helpful to have part-time help at busy times such as lunchtimes and weekends
- some of your staff will need at least basic food safety training
- the National Minimum Wage Act sets a minimum amount that you must pay your staff. You're not allowed to use tips or service charges to make up employees' wages to the minimum level. Note that members of your family who you employ in the business do not have to be paid the minimum wage if they live in your family home. 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
Immigration legislation applies to workers coming to the UK from outside the EU and requires employers to make appropriate checks to make sure they are permitted to work in the UK.
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.