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 - if any - will be needed to do it.
You might need staff to:
- receive deliveries and check they are correct, stock shelves, price up items, work the cash till and generally help with a range of jobs
- put together displays, including window displays
- serve and advise customers - professional artists will want better quality products than students or amateurs so your staff need to be able to advise on the differences between ranges
- answer the telephone and deal with mail order and internet sales
- provide any in-house services you decide to offer such as picture framing
- make deliveries (if you decide to offer this)
- 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.
It's worth keeping in mind the following points:
- your customers will expect your staff to be knowledgeable and enthusiastic about materials, techniques and other art and craft related matters
- you could use a combination of full and part-time staff. Part-time work, maybe on Saturdays, is often attractive to students - perhaps students at a local art college
- 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. Include here the cost of staff pensions.