IRA Vs 401k – an Amazingly Simple Small Business Retirement Plan Decision

The question of IRA vs 401k leaps to mind when setting up a small business retirement plan. Do you know the differences between plans? What does the Internal Revenue Code allow and restrict? Why should you even care? Because if you sell fixed indexed annuities and want to capitalize on one of the hottest specialty markets going today (setting up retirement plans for small business owners with 1 to 9 employees), you’ll want to brush up on IRA vs 401k and other important considerations.

First, consider that a small business retirement plan, now more than ever, is the best way to defer large amounts of tax-deductible dollars. Thanks to the Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA), self-employed taxpayers now have unprecedented incentives to save for retirement. A business owner’s decision is quite literally whether to keep company profits… or send them off to Uncle Sam.

OWNER GETS MORE

It’s no secret the allure of a small business retirement plan is directly related to benefits available to the owner. The greater the owner’s share of the overall plan, the greater the interest. Before the new tax legislation, restrictions on owner’s benefits in small plan design often resulted in even fewer benefits for the employees. But the tools are now in place to ratchet up the owner’s benefits and still create a workable plan for the employees. So, should the plan be an IRA or a 401k? Let’s examine IRA vs 401k separately.

SIMPLIFIED EMPLOYEE PENSION

The simplest small business retirement plan for self-employed taxpayers and the easiest to set up and maintain is the Simplified Employee Pension (SEP). You may establish a SEP if you earn self-employment income, regardless of whether you have employees. A SEP is an Individual Retirement Account (IRA) and if maintained for more than one person becomes a group of IRAs.

All contributions to a SEP are tax deductible as a business expense. As an IRA the plan’s earnings are not taxed until they are withdrawn at retirement. As usual, withdrawals prior to age 59 ½ with this and other plans incur a 10% penalty. A SEP-IRA does not permit loans or salary deferral contributions. Also, the individual annual contribution limit for 2006 is the lesser of 25% of compensation or $44,000, and contributions may be reduced or skipped altogether in lean years.

INDIVIDUAL 401(k)

Another handy tool in the EGTRRA toolbox is the Individual or Solo 401(k). This small business retirement plan is ideally suited for businesses in which the owner or owners (and their spouses if working at the business) are the only employees. The biggest reason for opening a one-person 401(k) is the higher contribution limits allowed, plus the fact that contributions are based on revenue generated by the business.

The maximum tax-deductible employer contribution is 25% of gross eligible payroll. For 2006 the maximum effective salary deferral contribution for employer plus employee is $44,000 plus a catch-up contribution of $5,000 for individuals age 50 and over. Loans are permitted subject to limits and rules, and paperwork may be just a filing of the streamlined IRS Form 5500-EZ when plan assets exceed $100,000.

NEVER A BETTER TIME

The new tax law creates a multitude of opportunities with more than 60 new provisions to strongly encourage the startup and funding of your small business retirement plan. Variations in plan design allow opportunities to suit independent contractors, sole-practitioner professionals, small retail owners — virtually every type of small business imaginable. Answer the question of IRA vs 401k and you’re on your way.

For small business owners in search of large tax breaks, it doesn’t get any better than this. There has never been a better time than right now to convert current taxes into assets, defer tax payments, and generate large amounts of retirement income. And for you as the fixed indexed annuity specialist, this market is virtually untapped.

How To Get High Quality Sales Leads Fast For Your Small Business

September 2008 will forever be remembered in American history. That was the historic time frame when the Government of the United States began bailing out major banks and the Big 3 in the auto industry. That’s when the word recession creeped its way into Americans hearts and minds.

Ever since that dreadful month countless small businesses have closed down. Many entrepreneurs, business owners, sales people, really people from all walks of life have been affected by this recession. They have not been able to adapt to the drastic change in the short amount of time.

Those that have are rapidly chipping away at their golden goose egg that has kept them a float for the past few years. But once used to be a nest egg for retirement has turned into just a few months of money to live off of. Any person that is involved with their community will tell you that small businesses are the back bone of America.

That being the case how do we help solve this problem of so many of them closing down for good? Go into any small or large town and you will see small businesses that have been around for decades no longer open for business. In my observation and speaking with a handful of business owners I am convinced of the main reason they are not succeeding in this new economy.

They have failed to adapt to the new way that customers are doing business. Simply put these small business owners are not putting their product in front of the right customers. They are not marketing. And to be quite honest most can’t afford to spend a single dime on marketing efforts.They are too busy pinching pennies as it is.

So what is the solution to this epidemic? The answer is simple. Leads. Sales leads. But not just any sales leads, high quality sales leads. If you are a small business owner you may be thinking that you can’t afford to buy any sales leads. Trust me I understand.

What if there were a way you can leverage technology to produce targeted leads for your business in an instant?

I’m not suggesting you spend a single dime on these leads. I want to show you how you can possibly save your business from closing down and start generating positive cash flow again.

If you are already thinking that you can’t afford to pay someone to market your business and get these leads have no fear.

Effective Tips to Generate Local Attention for Small Business

With countless companies starting and shutting down it can be difficult to learn useful tips that can effectively generate attention for small business. Starting a company can be hard enough as it is so you will want to gain as much exposure as possible to avoid wasting your money and efforts. Whether you have been a business owner for many years or are just beginning your venture now, knowing as much as possible will help you increase exposure for small business.

Make Good Use of Social Media

If you have any intentions at all for expanding your company and find new leads for small business then it is pertinent that you make good use of the social media options available. There are many different platforms that offer various levels of exposure. For example, having a company page for your fans on Facebook is a great way for customers to leave feedback and also spread the good word about their experiences.

The best part is that many social networking sites offer free accounts which mean free exposure. To effectively generate attention for small business you will need to put your company name and information out on the internet where potential customers can find you. According to various research reports, business owners agree that social media has allowed them to efficiently generate leads for small business without the high costs traditionally involved with advertising.

Look for Experts to Generate Leads

Having more leads for small business is another area of extreme importance. It can be futile to improve your products and services if no one will know about it. Your efforts should be consistently focused on the best ways to generate attention for small business. For many business owners, finding relevant leads can be the most trying part. If you are stuck in a rut and have no ideas about where to begin then consider finding an expert for guidance.

Marketing experts know how important leads for small business are for success and have the inside knowledge about how the internet works. If you are busy doing countless other things for your business then you will not likely have enough time to focus on increasing your leads. There can be a significant difference if you take advantage of tools like email list building or forums related to your industry. Hiring a professional may seem like an additional expense on top of many others but this small investment result in added exposure for small business.

Learn about Outsourcing Benefits

Since online marketing and lead generation can be quite a time drain in general, outsourcing such tasks can be a great way to get the job done well. Especially if you have no prior background or experience on how to generate attention for small business, you can profit from consulting with an expert for help. Social media for example, is a popular and effective way to advertise but many small business owners are not internet savvy and simply do not have the time.

Outsourcing has become much more popular over the years for two simple reasons. If you are the owner of a company then your time is likely more valuable than that which you would pay to someone else. While you are doing important duties for your business, find someone to outsource to so they can handle work that is time-consuming or challenging. Another beneficial reason to outsource your marketing needs is because professionals have the complete know-how on how to increase exposure for small business.

Evaluate Your Business’ Image

Whenever you are taking steps and action to generate attention for small business, be sure that you are in tune with what image is being presented. Although most business owners do not have much spare time, this evaluation is necessary to guarantee that the right message is being expressed on either your company’s website or social media page. If you do not check what exposure for small business you are paying for then you could end up doing more damage than good.

Another reason why you should review what image your company represents is that you will want your marketing strategy to change as your products, services, and progress improves. It is reasonable that many small business pages do not look as professional as corporations but as your business expands, you will need to upgrade how you present your company. Overall, you want to make sure that if you generate attention for small business, it should be in sync with the image you want.

Social Media for Small Businesses

Social media has become an integral part of our day-to-day lives. Businesses of all size and shapes have started making the most of available mediums. Today we will try to anatomize tips on social media for small businesses. There are a plethora of small businesses eyeing social medium to promote their business/services. However, majorly these small businesses are failing or not being able to make optimum use of social media for their business growth. There are many theories and strategies on how to effectively use social media for established brands, but the topic social media for small businesses is seldom addressed. According to Digital state of eMarketing India 2017 Octane Research:

60% small businesses promote their business on social media. 50% focus on SEO and 35% use multichannel marketing funnel.
70% small businesses consider content strategy as their primary marketing activity.
52% business owners are using social media as to efficiently address customer engagement.
More than 20% of business owners said that they are making 50% plus profit using social media.

The primary reasons for the low turnout are uncertainty on an application of social media, calculating return on investment and persuade employees/stakeholders to clinch social media. Hence it is important to address the elephant in the room and analyze how beneficial is Social media for small businesses.

Social media for small businesses is a great way for emerging businesses to generate lead and build a reputation. If regularly updated, social media can deliver more results as compared to traditional mediums. Social media for small businesses gives brands an edge of control over the content that they want to post. Also, since social media is a two-way dialogue process, it helps businesses to instantly identify what is benefitting them. Social media for small businesses also helps generate Word of Mouth, which is one of the best tools for emerging businesses.

Social Media for small businesses | 10 Tips to effectively use Social Media

Define your Target Audience
The first and foremost important part that small businesses should focus on is to define their target audience. This helps small businesses to device their social media strategy accordingly. The target audience should be defined basis age group, sex, location, users’ online behaviors, their likes, interests, and preferences. For niche products, business owners can even target users based on their birthdays, anniversaries and important milestone. Audience targeting plays a very crucial role in the outcome of the results. For e.g.: a local shop selling footwear should not target users with interest in entertainment. The shop definitely won’t get the desired results.

Set achievable goals
Overnight success is a myth. Small businesses must understand this basic fact. Generally, when a new business starts selling on social media, there is palpable excitement is achieving more than set targeted sales. Businesses need to set goals which are upwards and forward. To achieve enormous goals, small businesses start updating social feed with multiple updates in shorter duration. This leads to user’s disinterest in the product/service. The set goals should be in sync with brand’s core capabilities and expertise. For e.g.: if a business is into selling shoes, they shouldn’t set a goal to repair maximum shoes in their area.

Choose the right medium
By now everyone knows, social media is for free. Even paid campaigns can be conducted at a relatively low cost as compared to traditional mediums. It is in this scenario, that we often see small businesses jumping the bandwagon and creating profiles on all the available platforms. Creating social profile doesn’t hamper brand image, but aggressively promoting a brand on wrong platforms can lead to brand losing its potential customers. Hence it is advisable for SME’s to first identify the right platform through which they can maximize their business. For e.g.: If a shoe selling brand tries to aggressively sell on LinkedIn, they won’t get a plausible response as compared to promotions on Facebook/Instagram.

Promote your core product/services
Since each and every business is riding in the social media wave, it is important for a them to promote their core product/services. Nowadays, we see a lot of businesses promoting their services as well as promoting peripheral products/services, which revolves around their core product/services. Majority of the times, this SME’s doesn’t have capabilities to fulfill a requirement, which can lead to a bad word of mouth for their business on social media platforms. Let us go back to our example; if a shoe seller is trying to aggressively promote socks instead of shoes, it is not going to benefit the business in the long run.

Create quality content
Now that we have covered the topics of identifying the target audience, setting achievable goals, choosing the right medium and promoting the right product/services let us now take a look at the type of content a business should promote on their social pages. A business should always focus on creating good quality content rather than not-good quantity content. Even if the business updates their page once in a day as long as it is relevant to their business, advocates about its core products send across a clear message it is considered as a good quality content. Antagonistically, if a business posts multiple updates which aren’t even relevant to the business’s products and services leads to users considering the business as fake/spam. Also, new businesses should try and refrain from promoting other businesses on their social platforms initially.

Create a content calendar
Making a small business successful on social platforms is no small task. It takes a lot of efforts for the businesses to keep up their conversion ratio. One such effort is to create a content calendar. Small businesses must anticipate important events and create a content calendar accordingly. Ideally, a content calendar must be planned a month in advance but an even weekly content calendar is highly recommended. This helps businesses to avoid any last minute hassles, strategize much more effectively and it also helps in creating curiosity amongst its loyal fans/customers.

Test and re-test
Social media is highly unpredictable. The content a business posts today, might not work for tomorrow. Hence, small businesses must always test their content before publishing it on their pages. Testing content also applies to the platform a small business chooses to promote. Small business owners must always don the consumer’s hat before posting about any product feature, updates, schemes or offers. A consumer’s perspective is the key when testing the content that has to be uploaded.

Look for inspiration
Small businesses must always look for inspiration from a competitor who is successful in the same category. Copy pasting competitors idea or content is not the answer. Small businesses must look for the kind of content its competitors are putting up and derive their own strategies subsequently. Inspiring content/stories always make a business to strive to create their own content that is appreciated by one and all. It helps in increasing brand consideration, brand visibility thereby increasing conversions for the business.

Calculate ROI
Even a small promotional budget is not justifiable if there is no mechanism to calculate its return on investment. It is more important in case of small businesses. It is very important for a small business to keep a tab on the budgets allocated to any promotions and the subsequent ROI related to it. If a certain promotion is not doing well or the business is not getting desired results, the brand custodian can always look for other platforms to generate quality conversions.

Analyze and Re-strategize
There can be umpteen instances where a particular campaign/promotion might not work for a business. That doesn’t mean that the promotion is wrong or the product/service is not good. Doing an analysis of the campaign is as important as setting the objective. This helps the business to formulate their upcoming strategies in more effective ways. At the end of every campaign, brands must note down the learning’s from that campaign and identify if the content/idea was appreciated by their fans or not. This helps businesses to skip the non-performing updates from future communications.

Final Thoughts
Social media for small businesses is definitely beneficial and fruitful. If followed correctly, small businesses can benefit tremendously from the power of social media promotions.