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 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:
- serve and advise customers and help them to find the right fit. You might employ staff with a qualification in shoe fitting
- operate the till, answer the telephone and respond to email enquiries
- monitor stock levels and re-order stock (if you won't be doing this yourself)
- price shoes and other accessories, arrange shoes on shelves and display racks, and organise the window display
- fulfil online orders if you sell shoes and other goods through your website
- keep the business records and do other administrative tasks
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 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 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
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.