While your business may not be considered a Fortune 500, have hundreds of employees, or gross millions of dollars, it still operates in much the same way as one that does. You must sell products and services, pay for overhead, pay for your staff, and you also must do what you can to retain your employees. One way in which to do this is by offering competitive benefits.
This can be a challenge for some small businesses as their overall gross income may not be enough to afford fancy perks. Work vehicles, travel, and other bonuses may not be feasible, but one benefit that can help to attract and retain quality employees as well as benefit your small business in other ways is by securing a 401k plan for your business.
A 401k plan is a tax deferred savings vehicle that allows employees to contribute with each paycheck and allows employers to match those funds as well. Such an investment program can be a huge positive for all involved, and it doesn’t matter the size of your business either. These days, any business, no matter how small, can participate in a 401k plan and here a few reasons why doing so will likely make sense for yours:
- The business can participate in tax deferred savings-One obvious positive in having such a plan is that the business itself can participate, thus allowing it to place some of its profit in a tax deferred program, thus helping to make the business more financially sound. Depending on the investment, such a move can result in a huge tax savings each year.
- 401k’s are easily managed utilizing today’s technology-One fear that some small businesses have in considering a 401k plan is the resources that may be required to manage it. This is no longer an obstacle as an experienced financial firm can easily set up such a plan and using currently available financial software, the plan can be managed online with very little time and effort required.
- Businesses offering 401k plans are attractive to employees-One of the best reasons for small businesses to offer such a plan is the fact that employees love them, and they make an extremely enticing benefit. One reason poll showed that as many as 40% of today’s employees would leave their current job to work for another firm if that firm offered a 401k plan. Small businesses can utilize such plans to retain existing employees and attract qualified new talent as well.
- You only need a dollar-Another fantastic aspect of these plans is that there is no minimum contribution required to invest. This means that an employee can decide how much or how little to contribute and change this amount over time as their financial situation changes.
So, if you were on the fence about starting one or simply didn’t think your small business qualified, the list above should help you make that decision. A 401k for your small business may be one of the best decisions you ever made!
