Small Business Owners Retirement Plans

October 16, 2013 by

business (10)As more and more Americans are reaching the age of retirement, there are many questions about their retirement plans and whether they can afford to retire. According to this year’s figures, 57% of households say they have less than $25,000 in savings and investments.  28% say they have less than $1,000. Furthermore, small business owner’s retirement plans for their employees are minimal if they exist at all. If you are a small business owner interested in starting a 401(k) plan for your employees, read the articles below to read more.

The Sorry State Of Small Business Retirement Plans

Workers of the small-business world: I’m worried about you. In particular, I’m worried about your retirement.

A bruising new study from the Transamerica Center for Retirement Studies tells a tale of two retirement systems in the U.S. workplace: one for employees at large companies and an inferior one for those at small firms.

If you work for a business with fewer than 100 employees, there’s a far greater burden on you for even the prospect of having a comfortable retirement.

The Burden on Small Business Employees

“Workers at small companies need to be even more savvy about their retirement benefits than those at large companies, given the lag of those benefits at small companies,” Catherine Collinson, president of the Transamerica Center and author of the report told me. “It’s incumbent on small-company workers to help bridge those gaps on their own.”

Three Myths Keeping Small Businesses From Starting A 401(k)

Small businesses employ nearly one-third of U.S. workers and are a major part of our nation’s economic engine.  But an issue that continues to be discussed in Congress and state governments is how do we help more small businesses offer a retirement plan?

Ninety-nine percent of businesses with over 500 employees provide 401(k) plans or similar retirement benefits to their employees.  The numbers for small businesses are much lower.  In fact, our latest research on businesses with less than 50 employees shows that only about 24 percent offer a 401(k) plan.  This means a large number of Americans are not likely to be as prepared financially for retirement as those who have access to a retirement plan.

And while there are many sound reasons for small businesses to start a retirement plan, there are also some myths and pockets of misinformation clouding the picture. Following are three of the most-commonly cited myths (along with the real facts) to be aware of.

How business owners view money, retirement

Benefits and Retirement:

• When it comes to health benefit plans, 47% of respondents currently offer some type of plan. Almost half (44%) offer employee health benefits, 20% offer flex health and benefit plans and 8% offer healthcare spending accounts.

• Only 11% currently offer an employee wellness program.

• Just 37% of companies that have a health benefits plan also offer a retirement savings plan.

• A majority (54%) of small business senior decision makers feel that the financial security of employees who retire from their company is a reflection on their company and on them personally.

• Of those owners without a plan, reducing employee turnover (28%) or attracting top talent (17%) are important motivators for implementing one.

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U. S. Small Business News

October 9, 2013 by

business (7)We are bringing you the latest news that is happening in the U. S. this week. From technology that helps small business do their job better and allows them to grow those while maintaining some level of tranquility, to the latest criticism of the Obama Care Act. Click on the links to follow the rest of the stories.

Digital tools play big role in small business growth

Tweet, Vine, Pin, Post. Update a blog. Like a Facebook status. Network via LinkedIn. There are myriad options for small business owners to connect with customers, peers and others via digital media.

Yet, these entrepreneurs also have to balance budgets, keep track of accounts receivable, manage payroll and sell their products and services.

With limited time and financial resources, it can be incredibly difficult to figure out the most efficient and effective ways to embrace the rapidly expanding digital world.

If a small business owner shuns social media, he or she could miss out on big marketing opportunities. But if too much time is spent seeding such sites, other important duties could fall by the wayside.

The Business End of Obamacare

Of the countless reasons that congressional Republicans hate the Affordable Care Act enough to shut down the government, the most politically potent is the claim that it will do untold damage to the economy and cripple small companies. Orrin Hatch has said that Obamacare will be “devastating to small business.” Ted Cruz argues that it is already “the No. 1 job killer.” And the vice-president of the National Federation of Independent Businesses called it simply “terrible.” So it comes as some surprise to learn that Obamacare may well be the best thing Washington has done for American small business in decades.

Economists want to know faster what’s happening in small business

WASHINGTON — Politicians extol the virtues of small businesses as an engine of the U.S. economy, but often leave out a very important flip side. They also have a shorter life span than larger firms, and thus toss more people into joblessness, making them disproportionately the generators of unemployment. .

Yet there’s no good way to know what’s happening in those small businesses fast enough. That’s particularly true in times of crisis, such as 2008, when employers were shedding jobs by the hundreds of thousands every month and the lack of real-time data about small business was troubling.

A bipartisan small business fix

As Congress confronts issues of tremendous policy and political implications in the next few weeks including a continuing resolution to keep the government open, federal debt ceiling debates, and numerous healthcare, immigration, and energy proposals, one bill is quietly making its way through Congress which is bipartisan, pro-small business, pro-job growth, and a long overdue fix for professionals who work in the sale of private businesses.

HR 2274, the Small Business Mergers, Acquisitions, Sales, and Brokerage Simplification Act of 2013 is an excellent bipartisan bill, one whose time has come, and Congress should get it done before the end of the year.  It’s not a sexy bill, not one that prime-time TV will be talking about, and not one that will evoke a question in the next presidential debates, but it’s a bill that does have teeth and it is a serious and substantive piece of small business legislation.

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Government Shutdown And Your Small Business

October 1, 2013 by

business (11)With the fear of our government shutting down, the Obama health care plan coming into effect today, and all those businesses uncertainties we seem to be dealing with these days, we are bringing you some of the most recent articles dealing with information and answers to some of the questions you may have about the government shutdown and the Obama health care plan.

What impact would shutdown have on small business?

Q: Will the government shutdown (if it happens) have an effect on my business? — Taylor

A: The short answer is that the only effect any shutdown may have is if your business does direct business with the government. If you contract with the government, or get payments from them, then yes, a shutdown would have a negative effect on your business.

More broadly, it’s hard to imagine a group less effective, less professional or more shortsighted than these elected “leaders.”

GOVERNMENT SHUTDOWN: What to know

If any of us ran our businesses the way they run the country, we would be bankrupt.

Can you imagine running a business this way? Lurching from crisis to crisis, not paying your bills, verging on defaulting on your creditors, threatening to default on your creditors — it is business (and political) malpractice.

Government shutdown leaves small business loans in limbo, shutters SBA

Congress’s failure to pass a spending bill has brought a halt to the U.S. Small Business Administration’s ability to process new loan requests as part of the broader government shutdown.

In the weeks and days leading up to the shutdown, bankers flooded the agency with loan-guarantee applications, racing to secure funding before the lights went out.

“We could read the tea leaves and see we were heading this way, so lenders have been working overtime to get the applications done and in to the SBA,” Tony Wilkinson, president and chief executive of the National Association of Government Guaranteed Lenders, an organization comprised of roughly 750 small-business lenders, said in an interview late Monday.

Small business borrowing rises in August, slowly

Borrowing by U.S. small businesses edged up in August, pushing an index of borrowing to a six-year high.

The Thomson Reuters/PayNet Small Business Lending Index, which measures the volume of financing to small companies, rose 1 percent to 116.6, the highest level since August 2007. The index registered 115.4 in July, revised from an initial reading of 117.7, PayNet said on Tuesday.

Historically, PayNet’s lending index has correlated to overall economic growth one or two quarters in the future.

The reading came as investors were boosting expectations the Federal Reserve would likely reduce its massive stimulus program in September.

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How To Start Your Small Business

September 23, 2013 by

business (6)You have been toying with the idea of starting your own business, and you have a product, or service you want to develop or promote. You are tired of the same repetitive tasks at work and can wait to do something different that will challenge your intellect, and patience.

But have you thought about all the challenges you’ll be facing and the many tasks you will be required to do in order to get your business off the ground? According to the Small Business Administration, of the 27 million small businesses there are today in the United States, 50% of them will fail within 5 years. And although the idea of being your own boss is to say the least liberating, there are many challenges you must be aware of before quitting your job.

Read more about this by clicking the links below.

How to start a small business with smarts

There is no single recipe for how to create a financially sound small business.

Some founders make their money off a few big clients. Some have many customers.

There are those who use credit cards and personal savings for working capital. Others seek investor money through crowdfunding websites.

“There are lots of ways to make your business work,” says William Dunkelberg, chief economist at the National Federation of Independent Business. “This is what entrepreneurs do — they find clever ways to get things done.”

SMART SMALL BUSINESS PARTICIPANTS: These entrepreneurs get a taste of success

When the Giacomini family, who run Point Reyes Farmstead Cheese Co. in Point Reyes, Calif., first decided to diversify beyond milk production on their farm, they sold off half the cows in their herd and used the proceeds to build a cheese-producing creamery.

Small Business Learns to Build Customer Loyalty Like Luxury Brands

There are more than 27 million small businesses in the United States, according to the Small Business Administration, but 50% of them will fail within five years. While lack of capital is a major factor, also significant is the lack of a customer-centric culture.

“Many entrepreneurs launch businesses with a great product or service idea, and then proceed to focus on daily transactions rather than building long-term customer relationships,” says Milton Pedraza, CEO of the Customer Culture Institute. “Focusing on transactions over relationships does not breed customer loyalty.”

Successful smaller companies, says Pedraza, are organized at an early stage to deliver extraordinary experiences to every customer on a daily basis. The problem for most small businesses is a lack of expertise and a proven process.

Small Business: High-performance presentations

You’ve made it onto the short list for that big contract, and the client wants you to present your proposal to the executive committee. Or the leader of your networking group has offered you a spotlight presentation at next month’s luncheon. Or you get the chance to informally pitch your new business concept to an angel investor over coffee.

What do you do next?

Get grounded: Whether you’re starting with a blank page or sifting through a pile of marketing collateral, begin your process by setting a solid foundation for your talk. Geni Whitehouse, author of “How to Make a Boring Subject Interesting,” advises answering these questions:

Why am I speaking?

 

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Today In Small Business

September 19, 2013 by

business (3)As the time approaches for the Obama Affordable Care Act to come into effect companies and small business are finding ways to sidestep the health care laws and make it work for their small business.

Read this and other interesting topics by clicking the links below.

Today in Small Business: The Business Lessons of Walter White

What’s affecting me, my clients and other small-business owners today.

The Economy

  • The Fed continues its stimulus and companies from Apple to Verizon Communications are saving about $700 billion in interest payments.
  • The Congressional Budget Office says that deficits are falling now but warns of trouble ahead.
  • The United States added 16,160 franchise jobs in August, according to a new report.
  • Conditions strengthened in the latest Architecture Billings Index, and builders started work in August on the most single-family homes in six months.
  • FedEx reported a 7 percent rise in quarterly profits.
  • Chief executives were less optimistic about the economy in the third quarter.

Small Business Administration Closure Plan Will Be Deceptive and Devastating

I predicted President Obama would try and close the Small Business Administration (SBA) by combining it with the Department of Commerce in November of 2008. He proved me right in January of 2012 when he announced his plan to do exactly that.

When Ronald Reagan was very clear he wanted to permanently CLOSE the SBA his plan was to combine it with the Department of Commerce. Combining agencies, particularly with the Department of Commerce, is an old Washington trick to close an agency without having to deal with public backlash.

President Obama said the federal government could save $300 million a year by combing the SBA with the Department of Commerce. He never gave any details on how that would be achieved. $300 million to the federal budget is like the change in your car compared to your overall net worth.

Small Businesses Temporarily Sidestep Health Law

Many small businesses have found a way to temporarily sidestep some of the headaches brought on by the new health care law.

One of them is Huber Capital Management. The asset management firm is renewing its health insurance policy early, in 2013 instead of 2014. By renewing its policy this year, the company doesn’t have to buy insurance that conforms to the requirements of the new health care law. And it won’t have the surge in premium rates expected under the Affordable Care Act.

“We can just push this whole thing off and defer it for essentially one year,” says Gary Thomas, chief operating officer of El Segundo, Calif.-based Huber Capital, which has nine employees covered by insurance.

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Small Business Outlook On The Economy

September 10, 2013 by

business (10)“The greatest barrier to success is the fear of failure.”
Sven Goran Eriksson

Although the quote may strike a nerve in some of us, it really does not apply to entrepreneurs.  When we look at the many responsibilities and jobs that a small business owner has, the fear of failure is not stopping them from pursuing their dreams.  The economy and policies in Washington have not been kind to small businesses, but a recent survey indicates that capital spending, sales, inventory accumulation, and hiring are rising in August.

Read more about this and other news by clicking the links below.

U.S. small business confidence slips in August

U.S. small business optimism dipped in August as owners worried about the economy’s near-term outlook, but gains in sales expectations and hiring plans hinted at a pick-up in the pace of economic growth.

The National Federation of Independent Business said on Tuesday its Small Business Optimism Index slipped 0.1 point to 94 last month.

While details of the survey were fairly mixed, key indicators such as planned hiring, capital spending, inventory accumulation and sales all advanced in August, suggesting an improvement in sentiment in the months ahead.

“Capital spending and inventory investment plans increased as well, all activities that would put some energy into GDP (gross domestic product) growth,” the NFIB said in a statement.

The Old Are Working, but Not the Young

This summer has seen a larger share of a certain group of people working than at any time in the last three decades, according to government figures.

That group is older people.

During the summer months this year, an average of 35.9 percent of men ages 65 to 69 had jobs. Similarly, 25.6 percent of women in the same age group were working. Both figures were records for any summer since such numbers became available in 1981. The rate of employment for women 70 to 74 is also higher than in any previous summer.

All other age groups over 60 came close to setting records. The share of men 60 to 64 with jobs was 57.2 percent, and the share of women in the same age group was 47.1 percent. Both were less than a half a percentage point short of the previous summer high.

An entrepreneur who turned a town around

Pam Dorr wanted to be part of the solution and not the problem. Her town was overrun by wild bamboo of all things and her local economy was on the skids. Here is what she did.

Dorr rode into Greensboro, Alabama when its main street was on life-support. Even the catfish had moved on.

“Seventy-five percent of the businesses downtown were vacant or abandoned,” she recalled.

But Dorr has a special gift: using whatever’s lying around to build possibility. In this particular case, she showed us a bicycle made of bamboo. “It’s an engineered bamboo tube in a hex shape lined with carbon fiber,” she explained.

Wild bamboo was a local nuisance. “It turns out it’s great for building bikes.” said Dorr.

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Small Business And Tax Reform

September 2, 2013 by

business (11)If you are a small business owner, you have to have an opinion about this.

Although some of the articles speak of an economy that is showing signs of life, other indicators from other industries show that it may just be a stagnant economy.

You can read more about the most recent small business news by clicking the links below.

Small businesses should take stock, take a little risk

The economy is showing signs of life and that makes it a good time for small business owners to re-evaluate how they are running their companies.

Now that crisis mode has passed, owners need to make sure they’re ready to take advantage of growth opportunities on the horizon. Experts say it’s time for owners to think about taking some risks and to make sure that they are taking care of employees.

There’s evidence that owners are more confident. Nearly half of small business owners say there will be growth opportunities in the coming year, according to a survey taken in June and July by the National Small Business Association. That’s up from 38 percent six months ago. And the Wells Fargo/Gallup Small Business Index of small business confidence, compiled from a July survey of owners, jumped 9 points to 25 from the start of the year.

Small Business Spotlight: Boardroom Development Partners

What Boardroom Development Partners does is a little like an online dating service.

First there’s a survey of interests. Then more detailed information might be shared. The first face-to-face meeting takes place over cocktails in a public setting. If chemistry results, there are more intimate meetings.

With the parties BDP puts together, though, “closing the deal” means, well, closing an actual business deal.

BDP specializes in creating and hosting business events where CEOs of various financial services sectors meet and — based on surveys taken before the event — are matched with service providers who can help grow their business.

On tax reform, lawmakers target small business concerns — but will it matter?

Most small firms are set up as pass-through entities, meaning taxes are paid by their owners at the individual rate, which runs as high as 39 percent. By comparison, the corporate rate is 35 percent, and after deductions, corporations pay an actual average rate of about 12.6 percent, according to the Government Accountability Office.

Consequently, many small-business groups bemoaned a proposal last month by the Obama administration to lower the corporate rate without also lowering individual income rates.

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Benefits To Your Business Through Social Media

July 30, 2013 by

business (7)The trend to advertise and lure customers through social media channels are done by big and small businesses.  No one is surprised these days that big companies are spending millions of dollars to launch a social media campaign to gain access to more customers. Facebook, Google, Twitter, and LinkedIn are some of the mediums businesses are using to gain exposure, market a new product, implement a strategy, and get a bigger market share for their businesses.

Survey: Businesses Benefit from Social Media Savvy

Activity on Facebook, Twitter and other social media is good for your business. At least that’s the opinion of many of your peers.

The BRANDfog 2012 CEO, Social Media and Leadership Survey (PDF) reveals that business leaders who use social media increase their brand’s profile and instill confidence in their leadership.

The survey polled hundreds of employees at companies ranging from Fortune 500s to small startups, and measured the effect of social media participation by the executive management team. The results can give owners and managers from businesses of all sizes insight into the overall effect of social media use.

5 Social Media DON’Ts for Small Businesses

In this day and age, it should come as a shock to no one that the use of social media networks are imperative to any small business looking to succeed. With their ability to reach so many people so quickly and easily, such platforms are truly invaluable assets when publicizing a product or company. However, there are ways that Facebook, Twitter, Reddit and the rest can be detrimental. When using a social media network, users have to be aware that there are certain things they must never to do.

Small Business Employment Share Shrinking for a Good Reason

Big business now employs the majority of private sector workers. Small business’s share of private sector employment has fallen from 54.8 percent in 1987 to 49.2 percent in 2011. This shift has occurred largely because big business has gotten better at preserving jobs.

The figure above uses Census Bureau data to calculate the small business fraction of employment over time. As you can see, with the exception of the 2001 to 2004 period, small business’s share of employment has been trending downward it peaked in 1987.

Employment is the result of both job creation and job destruction. When firms are started or grow, they often create jobs. When companies shut down or shrink, they often destroy jobs. Employment rises if job creation is larger than job destruction, and falls if job destruction exceeds job creation.

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Small Business Retirement Savings News

July 15, 2013 by

business (6)Gov. John Kasich’s 2014-2015 state budget has passed, and that means changes to many areas of the government.  But, what does it mean for you as a small business owner? Does it affect the way you save for retirement? How about your health care? Are you saving for your retirement? What are the best options for you as a small business owner? Below, there are three articles that will certainly be of interest for you. Click on the links to read the articles in their entirety.

Lt. Gov. draws attention to small business in local visit

If it weren’t for a pair of western boots and a pair of pink socks, Ohio’s lieutenant governor might have spent less time in downtown Marietta Thursday.

Lt. Gov. Mary Taylor has been on the road this week visiting towns and small businesses across Ohio to gauge reaction to Gov. John Kasich’s recently passed 2014-15 state budget.

After similar trips to Salem and Kent on Wednesday, Taylor stopped by Schafer Leather Store for a private meeting with owner Rob Schafer and Marilyn Ashcraft, southeast region representative for the lieutenant governor.

Small business owners neglect retirement savings

Kari Warberg Block calls it her day of reckoning. It was the day 10 years ago that she realized she had saved nothing for her retirement.

“I started thinking about all the money that had run through my hands over the years, millions of dollars,” says Block, owner of Earth-Kind, a manufacturer of rat and mice repellent. “I was sick to my stomach.”

For many small business owners, the golden years aren’t looking so shiny. Many have devoted so much time and money to their businesses that they have failed to plan for retirement. Catch-up plans for these owners usually consist of aggressively putting money aside, or taking another big risk: Planning to sell their companies one day to fund their retirement.


A retirement plan solution for small businesses: A simple IRA

Are you a small business owner that has been contemplating establishing a retirement plan? Are you concerned about the administrative costs and headaches associated with running a 401(k)? If so, a Savings Incentive Match Plan for Employees (SIMPLE) IRA may be a plan to fit your needs.

A SIMPLE IRA is an IRA-based plan that gives small employers a simplified method to make contributions toward their employees’ and their own retirement. Under a SIMPLE IRA plan, employees may choose to make salary-reduction contributions and the employer makes matching or non-elective contributions. All contributions are made directly to an Individual Retirement Account or Individual Retirement Annuity (IRA) set up for each employee. SIMPLE IRA plans are maintained on a calendar-year basis.

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