As a small business owner, it’s a constant push and pull between different issues during your day. Sometimes, it’s a matter of fixing immediate issues. Other times, it’s trying to refine your business to get more profits. At the end of the day, it’s short-term issues that take up the bulk of our time, which is human nature. However, there are some long-term plans that you don’t want to ignore. One is a retirement plan. This means making an investment in time and money, even when things are tight. However, here are some reasons it’s worth pushing through anyway.
The first reason is one all-too-common for small business owners: finding employees. It can be difficult to bring on the qualified employees if you are competing against larger companies. And retaining them can be even harder. Job-hopping is common, and it’s often smaller businesses who are the worst for it, as people look to move upward in hopes of higher wages and a better career path. This can be doubly important if you are focusing on a tight niche, like immigration labor advertising. There isn’t a massive pool of skilled copy professionals who also know the letter of the law and can even go multi-lingual if needed—all traits that you could use. This is why you need to sweeten the pot in some way.
You can’t fight a megacompany when it comes to wages, but a retirement plan can level the playing field. Some employees may be willing to pass over on a higher wage if you have a better benefits package. In some cases, it may financially make more sense; in other cases, they may have certain needs that only a set of benefits can cover.
Along with the benefits for employees, a retirement plan can directly benefit your business as well. This especially matters when it comes to taxes. For example, employer contributions to the 401k plan can be tax deductible. Should these contributions accumulate, you may have a little tax-free growth on your hands. This changes based on the plan and how much contribution is made, but chances are you will see some sort of tax benefit.
If you helped the employees, you’ve helped the business, but what about helping yourself? For many entrepreneurs, especially young ones, there’s no real opportunity to save for retirement, as money is going into the business. The idea is that they can sell the business and live off the money in old age. But nothing is guaranteed. Why not have two potential sources for retirement, especially as prices get higher. Take part in the retirement plan yourself, also.