Must I take a pre-agreed wage?

[Gloucestershire_Graduate]

I am in the process of planning my new business. I'll be operating as a sole trader.

For the purposes of financial planning, must a declare a pre-agreed monthly wage? My hope is to just take out whatever I make, leaving enough to cover my costs obviously, plus a bit extra to put back into the business.

How do I display this on a financial forecast?

Thanks.

[Gloucestershire_Graduate]

Another confusing question:

Do I need to factor my NI contributions and Income tax into these forecasts? - including the rebate at the end of the year?

I don't have any other work, so my first £6k(ish) would be tax free, and there wouldn't be any NI contributions until later in the year. How do I illustrate these in my financial forecasts?

Cheers.

[stevon]

What do you expect to be paying yourself? Ie. If you make £100, are you planning on taking out £90? Then put that down. Your projections will show £100, so put your "wage" down as £90.

If you're planning on taking the profits, then just put down the % of the profits that you're taking x% for example.

As with all financial projections for a business plan - make it up, because you're unlikely to know half of what you will when you start :)

[obscure]

I am in the process of planning my new business. I'll be operating as a sole trader.

For the purposes of financial planning, must a declare a pre-agreed monthly wage?
It wouldn't be much use as a plan if you didn't include all the anticipated costs. You should do a personal budget to work out how much you NEED to earn and put that in the plan. Then make sure that the revenue in the business plan covers all the costs (inc the wage).

If you don't include your wages in the plan then the plan will always be wrong and it will make it harder to properly judge if the company is on course. Of course just because the wage is in the plan that doesn't mean that you must take that amount. If the company is doing badly you might decide not to take a wage (and borrow money from family, bank credit cards instead) and to use the money to support the company. However, because the wages were in the plan you will clearly see that the company isn't performing as expected.