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.

Staff duties

You might need staff to:

  • monitor, choose and buy stock (if you won't be doing this yourself) and receive deliveries
  • serve and advise customers. Many of the products that you stock will be of a technical nature and very often your customers will have little or no knowledge of the pros and cons of an item in comparison with a similar-looking product. Therefore, it is very important that your staff have sufficient knowledge of your product range to be able to offer appropriate and accurate advice to guide customers towards the product that suits them. It is likely that if you can provide your customers with this level of service then they will favour your shop over your competitors. Conversely, if staff are unhelpful, you are likely to lose sales to your competitors
  • handle sales, including sales made on credit
  • fulfil online orders if you have an e-commerce website
  • do other work in the shop - jobs like price labelling, organising displays, answering the telephone and so on
  • keep the business records
  • provide any in-house services you decide to offer - for example servicing skis and snowboards, dealing with equipment rentals and repairs and so on

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. 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 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. Also include here the cost of staff pensions.