If you are planning on having employees working with and for you, then you are going to have to have a handle on what they are going to cost you – before you open. How do you do that, you ask. Good question. Answer: You make up employee schedules for the first year in advance. No kidding. You have to have weekly schedules drawn up in advance so you know how many employees you are going to need and how much each of them is going to be paid.

You have already drawn up your revenue forecast; therefore, you have a good sense of what volume of business you are planning on doing at the various times of the week and during the various months of the year.

To determine the labor costs in your small business the first step is to draw up schedules week over week. You’ll need someone to open and someone to close. You’ll need a couple of people in the back. You will need more people during the busy times and less when it is slower. You’ll have extra staff on the weekends and during holidays.

You should have a handle on the number of customers who will be frequenting your small business because you thought it through when you were estimating your revenues; so now it is time to make sure you have the right number of employees working to deliver the quality of service your concept demands.

The next step in determining your labor costs is to total all the hours you have estimated by employee position for a week. Then multiply those hours by the rate of pay for each position. Your supervisors will make more than your line staff. Then add a percentage – say 10% – to cover the government benefits that you are responsible for. There may be employment insurance and government pension plan and vacation pay and maybe workers’ compensation. Ouch. » Read more: Business Plan for Small Business