Industry sector: Manufacturing

Furniture maker: Wages

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. A lot will depend on the nature of the furniture items you plan to produce and whether your business will be highly automated or will use traditional methods of hand-crafting.

Staff duties

You may need staff to:

  • work on all aspects of the manufacturing process, from designing the product ranges to finishing and packaging them
  • choose and order timber, raw materials and components
  • receive, store and monitor your stock
  • estimate the amount of timber and so on needed for a job and cut it to size
  • take orders and draw up production schedules
  • monitor productivity, quality and wastage
  • invoice customers, keep the business records and attend to other administrative jobs
  • make deliveries or arrange for distribution by a specialist carrier
  • maintain your website and process online orders (if you decide to offer this service)
  • clean production areas and maintain machinery

You might decide to employ enough staff so that you can undertake all of the manufacturing processes in-house. It would not be unusual, however, to use the services of freelance furniture designers and specialist finishers such as polishers. If this is how you plan to operate, enter in your cash flow forecast the amounts you will be paying to subcontractors.

Depending on the scale of your proposed business, you might feel that you need a sales team, to find new customers and to service existing accounts. Alternatively you could use the services of freelance selling agents.

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.

Don't forget:

  • you could use a combination of full and part-time staff
  • you could take on and train apprentices
  • workers who use potentially dangerous machinery will need appropriate training in using it safely
  • 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. Also include here the cost of staff pensions.

Cabinet Maker magazine includes an industry recruitment section that employers can use to advertise jobs they have available.