Making Your Small Business 401k Plans Work for You

Both employers and employees should view 401k plans as excellent savings tools. When trying to run a small business, a 401k plan could help you in many ways. Small business owners are always looking for some sort of competitive advantage in the marketplace. They are continually looking for an advantage. A good 401k plan can be a major benefit to the success of your small business. Here are a few ways that your small business 401k plan can work for you.

Attract Talent

One of the most important parts of a small business is the people within it. If you do not have top-level talent associated with your business, you will eventually watch the rest of the market pass you by. Attracting talent is one of the most important things that you can do. You need the best sales staff, researchers, accountants, and operations personnel in the area. If you get second rate people to fill key roles in your business, you should expect to get second rate results as well.

One way that you can attract talent is to offer them a great benefits package. Medical, dental and vision insurance is just a part of what makes people want to work for you. A big part of the package is the 401k plan that you offer. Your competitor may not offer a 401k. If you offer a 401k matching program, it will bring even more people to your door. The allure of free money is hard to pass up when you are a top performer. Talented people care about their retirement just like everyone else. If you want to lure them away from some of the big companies, you will definitely have to have a similar benefits package, otherwise, they would have no legitimate reason to come work for you.

Employer Contributions

Starting an employer match program with your 401k can be another fantastic tool for your business. For one thing, it helps with attracting talent. It will make your employees happier and increase workplace satisfaction. Happy employees work harder and more effectively than disgruntled employees.

Besides the benefits of a happier workforce, there are also tangible benefits involved with an employer match program. You can deduct the amount that you contribute to your employee's 401k plans from your taxes. This is a huge benefit as it comes directly off of your taxable income. Fewer taxes mean more profit. In the competitive world that we live in today, every advantage you can get will help. That little bit of savings could be the difference between staying in business and closing the doors.

A well-designed 401k plan can be a huge boost to your bottom line in the grand scheme of things. You can bring in the best employees, increase productivity and save some money on taxes at the same time.

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