Author: Heather Johnson
Savings and Retirement Plans for Entrepreneurs and Small Business Owners

Savings and Retirement Plans for Entrepreneurs and Small Business Owners

If you are an entrepreneur or small business owner, you are the one who’s in control regarding your financial future.  There is no one else to rely on when it comes to saving and planning for the future, so you must take on this matter yourself.  The thing is many traditional savings and retirement plans are unavailable to you due to income limitations.  Here are a few savings options for entrepreneurs and small business owners.

 

Solo 401(k)

A solo 401(k) plan is a great alternative to the traditional 401(k), and was created for self-employed individuals, entrepreneurs, and small business owners with no full time employees.  The only exception to this is if the small business owner’s spouse is an employee.  Solo 401(k) plans have simplified administrative rules, unlike their traditional counterparts.

The advantage of a solo 401(k) is that it is simple to use and maintain.  You may contribute up to $13,000 of tax-deferred income, in addition to up to 25% of profit from your business.  As long as you contribute no more than $41,000 annually, you fall within the limits of the solo 401(k).  The amount you contribute to a solo 401(k) is completely discretionary and can be decreased or suspended at any time.  Additionally, loans against your plan, as well as hardship withdrawals may be allowed.  Rollovers from previous 401(k) plans are allowed as well.  

There are a couple of drawbacks to the solo 401(k).  Naturally, there is a cost to establish and administer a solo 401(k), which may or may not be desirable for the individual investor.  Solo 401(k) plans may not ultimately end up meeting your needs for you and your business.  If your business grows, you may end up needing to hire on additional full-time employees.  When this happens, you are no longer eligible for a solo 401(k), and must revert to a traditional 401(k), which is far less simple to administer.

SEP IRA

An SEP IRA, or Simplified Employee Pension Individual Retirement Account, is a savings and retirement tool that can be used by both small business owners and self-employed people as well.  SEPs are considered part of a profit sharing program, and the employer may contribute up to 25% of a qualifying employee’s income to the fund.

SEPs are affordable and simple to administer, and is an excellent benefit to provide to employees.  If an individual is self employed, they are still able to put aside a little over 18% of their net profit, which is a powerful savings tool indeed.  Contributions to the plan are tax deductible, and standard income tax applies to the money once it is withdrawn for retirement use after the investor reaches age 59½.  Additionally, its high contribution limits make it very attractive ($46,000 in 2008).

One of the drawbacks of this type of retirement plan is that it is seen strictly as a profit-sharing plan, so employees must have another savings vehicle if they wish to put more money away on their own.  There is no catch-up payment clause for those who started saving later in life, as there is with the solo 401(k).

SIMPLE IRA

Savings Incentive Match Plans for Employees (SIMPLE) IRAs are fairly simple to administer, no-hassle IRA plans that offer a great benefit for employees in your small business.  Recommended for businesses with 10 or fewer employees, it s a great savings tool to offer for employees, and benefits both parties in the process.

SIMPLE IRAs allow employees to contribute up to $10,500 of their annual income to the plan.  Employers match this amount as part of the process.  Employees are then vested and are eligible to receive this money upon reaching retirement age.  Contributions are tax deductible.

For business owners, the drawback of this type of account is that the employees doesn’t have to earn his or her vesting, but is vested once the account is opened.  That means matching someone dollar for dollar who may not be around to help you grow your company may not be a sound investment.  SIMPLE IRAs are also very strictly administered and cannot be rolled over, nor can a traditional IRA or 401(k) be rolled into a SIMPLE IRA.

SOLO DB Plan

This plan is a slimmed-down version of a standard defined benefit plan.  If you are looking to save a whole lot of money over a short period of time and have the resources to do so, this is the plan for you.

Like other retirement plans, contributions are tax-deferred and the money is available to you once you reach retirement age.  These plans are very popular with people in business for themselves who are over 50 years of age, due to the ability to save vast amounts of money in a short period of time in order to meet future income requirements for retirement.

The drawback for this type of retirement account is that investors must be willing and able to contribute ongoing mandatory contributions of at least $45,000 for five consecutive years to keep this plan going.  For many, this amount of money is simply not possible.  For the well-compensated small business owner or entrepreneur, however, this account could be just perfect.

Posted in Managing Money, Pension & SavingsComments (0)



How to: Turn Your Desk Into a Productivity Zone

How to: Turn Your Desk Into a Productivity Zone

If you’re like many busy people, your desk is full of mail, papers that hold forgotten to-do lists, and perhaps a stray coffee cup or two. This sort of environment just isn’t conducive to productivity. Follow these tips to streamline your work area and get things done.

  • Keep it tidy

    First things first. A tidy desk makes it easier for you to stay focused. Otherwise, you’ll feel overwhelmed by the weight of stuff around you. Organize your papers, corral post-it notes into a journal, and get rid of any random junk. You’ll feel refreshed and can clear the path towards better work.

  • Clean up your computer desktop, too

    A clean virtual desktop is just as important as a the one you’re sitting at. Instead of using lots of specialized tools, find a few super tools that can do multiple jobs and stick with them. Clean out the junk by uninstalling programs you don’t use anymore and archiving old files.

  • File

    Have you ever found yourself scrambling to find a piece of paper you just know you have, but can’t seem to place? Make it easy for you to find what you need by putting everything in a specific spot. You’ll save yourself time and frustration, plus it will be easier to stay on track if you don’t have to stop everything to conduct an extensive search.

  • Keep the essentials close at hand

    Your desk should be stocked with nearly everything you need to do your job. Whether it’s a file cabinet, printer, or pencil sharpener, make sure it’s within reach. If you have to get up and cross the room to use something, you’re likely to get distracted and off track.

  • Don’t goof off

    Make your desk a sacred space for work, and you’ll train your brain. Avoid using your desk for personal projects, storage, or other distracting items, or your attention may be swayed. If you keep your desk purely a work zone, it will be easier for you to get into work mode when you sit down.

  • Have good lighting

    Lighting is essential to productivity. It reduces your eye strain and prevents gloominess. To create productive lighting, focus on using natural light and reflection. Get rid of shadows and glare, and be sure to keep up proper maintenance.

  • Practice desk yoga

    Yoga isn’t just good for health and spirituality, it’s helpful for creativity and concentration as well. Take a moment to be active and mindful, and you’ll refresh your brain. Try out a program like Yoga @ Your Desk to learn about yoga you can do without even leaving your chair.

  • Get a smaller desk

    To get productive, get simple. Using a smaller desk means you’ll have less opportunity to let clutter take over. There’s less room for papers and assignments to pile up, so you’ll be forced to deal with items as they come. This can provide you with an incentive to work more efficiently.

  • Decorate with stimulating colors and design

    Some colors are just more productive than others. White rooms create an environment that supports errors, while bright colors like red are stimulating. If you’re overwhelmed by stimulating colors, blue-green walls are universally productive and relaxing.

  • Practice good ergonomics

    The comfort and efficiency of your body can directly influence productivity. Getting out of an awkward posture simply makes it easier to do any given task and concentrate on your work. It’s also been found to reduce errors.

  • Leave your desk

    That’s right, take a break. The most productive desk is one that you’re not chained to all day. Get up, move around, have a snack or a quick chat with a friend, and you’ll be more refreshed and ready to work again.

Posted in Bootstrapping, Business 101, Home BusinessComments (1)



20 Fail-Proof Ways to Expose Lazy Employees

20 Fail-Proof Ways to Expose Lazy Employees

If you have a lazy employee in your office, you could find yourself working overtime to make up for missed deadlines and wondering if you should give your lackluster worker either a little extra motivation or the pink slip. While some employees simply take longer to perform certain tasks and think things through, this list is devoted to exposing those employees who purposefully show up to work late, waste time on the Internet and skip assignments, all in an effort to shave minutes off their work day. If you’re through putting up with it, check out this list of 20 fail-proof ways to expose your lazy employees.

  1. Monitor their arrival and departure times: The easiest way to find out if your employee is deliberately trying to cut out time spent at the office is to monitor the exact times they show up to work in the mornings and duck out each evening. If they are arriving late and leaving significantly early each day, confront them, and ask if they will be willing to work out a new schedule or make up the time they’ve lost.
  2. Cameras: If you’re having trouble tracking the arrival and departure time of your employees, or if you want to see exactly what they’re up to when you leave the room, consider putting a hidden camera somewhere in the office. You’ll have hard evidence of any slacking off, but just remember to be reasonable. No one wants to be known as their office’s Michael Scott.
  3. Spectorsoft: If you have suspicions that your employees are playing on the Internet all day when they should be researching or typing up reports, install one of the spy software products from Spectorsoft onto their computers. These products will let you know who your office’s “worst offenders” are after analyzing which websites, chatrooms and keystrokes are used.
  4. Send in an undercover customer: If you’re worried about how your lazy employee treats your customers, send in a fake client to request information or schedule a meeting. Have the undercover customer report back to you, detailing the employee’s efforts to make he or she feels welcome, give the correct information and adequately promote your company’s image.
  5. Recruiting tests: Sometimes managers can expose a lazy employee during the recruiting process, saving them time and trouble down the road. This article describes how one hiring manager weeds out lazy workers by asking them to fill out two applications: one online before the interview, and another one during the interview. The manager ultimately “finds that people who skip the parts on the second application that they had previously filled out online, will eventually turn out to be lazy once hired.”
  6. Monitor lunch hours: Just because you work through lunch each day, don’t expect your employees to consistently do the same; however, if you have one or two employees who make a habit out of strolling back into the office twenty minutes after their hour was up, you have reason to expose their negligence.
  7. Track them with a GPS system: Lazy employees love running work-related errands out of the office because it gives them more control over the way they spend their day. If, however, you suspect them of running non work-related errands, install a GPS tracking system on the company vehicle, which will help you in “catching employees shopping, working out at the gym or otherwise loafing while on the clock.”
  8. Schedule meetings early in the day or late in the afternoon: Within reason, schedule a meeting every once in a while at the very beginning of the work day or sometime in the late afternoon. If your employee takes major issue with the scheduling but can’t provide a reason for his tardiness (or absence), you will have successfully exposed their laziness.
  9. Follow through with deadlines: By not enforcing deadlines, you give your employees the signal that it’s okay for them to procrastinate or turn in work late. Strictly follow through with deadlines, and hold employees accountable when they consistently fall behind. Document your efforts to remind them of deadlines, through email or by using the popular Monkey On Your Back tool, so that lazy workers can’t make up excuses.
  10. Demand doctor’s notes: When an employee calls in sick practically every week, start demanding doctor’s notes from workers who have used more than one or two sick days. Just be aware of the fake doctor’s notes that can be bought online to trick managers.
  11. Surf Logger: This “tiny add-on for Internet Explorer” records website history, so that you can track which sites your employees visit when they’re on the clock.
  12. Guardian Software: Guardian Software is an Internet monitoring tool marketed towards parents who want to control what their children do online. Managers can use the same product to effectively expose lazy employees by blocking certain websites, recording e-mails from Yahoo, AOL and other accounts, and even “captures and records keystrokes.”
  13. Cyberspy: If your office is on a budget, download Cyberspy to find out what your employees are doing on their computers. Cyberspy even captures whole images of a website or document in case you can’t properly evaluate the content from the file name alone.
  14. Employee Loyalty Acid Test: If your employee isn’t performing his or her duties at your desired level, they could be planning to leave your company for another job. Give your employees this survey to gauge their company and job satisfaction.
  15. Employee loyalty evaluator: If handing out surveys seems too obvious, check out this article to more discreetly evaluate an employee’s loyalty.
  16. Motivate them: This post from Yahoo! Answers discusses the proper ways to motivate a lazy employee in order to gain positive results in the office. Give them a vested interest in the company’s success by talking to them in your free time, limiting harsh criticism and helping understand that their slow pace affects other workers.
  17. Tell your boss: AskMen.com publishes this article, entitled “How to Complain About a Colleague.” Readers will find different ways to tell their supervisors about lazy employees without sounding like a tattle tale.
  18. Award productive employees: If you can, set up a merit-based rewards system in your office that grants raises, gift certificates, or other perks to your most productive employees. Lazy workers may be so apathetic that you won’t see any change in their performance, despite the added bonus.
  19. GPS-equip the company phone: While giving your employee a GPS-equipped company car might be way out of your budget, try investing in a company cell phone that comes with GPS. If you suspect your employee of leaving the office early, you might be able to catch them in the act with the GPS system.
  20. Fire them: If you’ve tried to confront your lazy employee but he or she continues to miss work and deadlines, set a precedent in your office by firing them. Let your other employees know that you won’t put up with laziness any longer.

Before spying on your employees, discuss any problems you have with their less than desirable work performance. Laziness could be a reflection of a much bigger issue at home or in the office, and the problem could be solved in a more amicable way. If, however, your employee continues to be lazy at work, use these tips and tools to expose their listless behavior.

Posted in Bootstrapping, Career, Managing MoneyComments (2)



When GTD Goes Too Far: How To Avoid Productivity Paranoia

When GTD Goes Too Far: How To Avoid Productivity Paranoia

Anyone interested in improving their productivity has no doubt heard about the Getting Things Done philosophy. Created by

David Allen

, this workflow program advocates a five step process to getting your daily to-dos under control. For many, it’s helped them turn their chaotic and unproductive work hours around and get their careers and jobs under control. But for others, productivity management has taken over their lives and their well being. If you feel yourself slipping into this kind of productivity paranoia, it’s not too late to salvage your sanity and your productivity. Here are some tips for getting your obsession under control.

  • Stop wishing you had more time. You can only fit so many tasks into so many hours in the day. Having one or two more hours isn’t going to make you any happier in the long run. If you’re going to plan your time, plan for the time you do have, not what you don’t have. Assign yourself an appropriate amount of tasks for each day that you can actually get done. If this means some things don’t get tended to, so be it. It’s not the end of the world.
  • Don’t quantify your output. You may feel good about getting more things done in a day, but getting more done isn’t really what it’s all about. The quality of your work is what really matters, and chances are pretty good that if you’re clamoring to cram in as much as you can, the quality of each of those tasks is suffering. Instead, pride yourself on the quality of the work you’ve gotten done each day.
  • Take a break. That’s right, take a break, as in stop working. When you get things done ahead of schedule or just have a few spare minutes, don’t try to cram them full with even more tasks. Reward yourself with some time away from your desk and your omnipresent task list. If you can’t bear to just do nothing, then add break times to your to-do list so you can check them off as if you’ve accomplished an important task.
  • Realize that getting more done isn’t the only thing that makes you an asset. Do you brag to others about how much you work or how much you managed to fit in one day? This shouldn’t be the quality by which you define your worth as an employee or a person. Being a hard worker is a great quality to have, but if you’ve become paranoid about your productivity, chances are you’ve taken it too far. Loyalty, creativity, and good leadership skills also help to make a great worker, so take a few minutes to reflect on what other assets you bring to the table besides your ability to multitask.
  • Stop the guilt trip. Didn’t get to everything on your list today? Don’t beat yourself up about it. You’re only human, after all, and even the best of us can’t meet goals that are unrealistic. Stop making yourself feel guilty for everything you didn’t get done and start thinking about all the things that you did get done instead. Chances are that you’re not giving yourself credit for having done a whole lot of work.
  • Narrow down what works for you. There are literally hundreds of GTD techniques out there, so many, in fact, that you could spend days reading about them. Many addicted to productivity spend an awful lot of time trying to find ways to squeeze extra minutes out of their days. Whether you use sticky note reminders or an elaborate online to-do list setup, find what works for you and stick with it. You’ll save yourself the stress of worrying that you could be using a better method and you’ll get the extra time to spend connecting with friends or doing small tasks.
  • Enjoy your time away from work. Many who are used to days crammed with back-to-back tasks find it hard to take a load off and enjoy a quiet evening at home with family or a vacation that doesn’t involve staying in constant contact with the office. The reality is that we all need a break and working too hard can lead to numerous stress related illnesses that can not only put a crimp in your productivity but in your health and well-being as well. Change your mindset when you leave the office and let yourself enjoy just doing nothing if only for a few hours a day.
  • Keep track of your accomplishments. For many addicted to getting things done, the to-do list is both a blessing and a curse. On one hand, it helps motivate and keep track of what you need to accomplish. On the other, it can make you feel terrible if you don’t check off every box by the end of the day. Break out of this guilt and let yourself relish in your sense of accomplishment for what you have gotten done instead of what there is still to do. Attempting to tackle everything is an unrealistic goal, as there will always be more work to do, so work your hardest, finish what you can and let that be enough.
  • Make things simple. If you know you have to get something done, you don’t always have to write it down or make sure it gets put into your PDA. Sometimes, the most productive solution is to just do it. For many, letting go of the lists and the calendars can be hard, but it can also help you to break the habit of turning your life into a to-do list instead of something you should be enjoying.
  • Time is worth more than money. You might pride yourself on working hard for every dollar that you earn, but at the end of the day those dollars don’t mean much if you don’t have guilt-free time away from work to enjoy them. Time spent with people you care about or doing things you love is just as valuable as time spent completing lengthy to-do lists. Keep that in mind the next time you’re tempted to make yourself feel bad for not checking off each one of those tasks.

Being productive is great, but when it starts causing you to stress out endlessly, it may be time to take a step back and reevaluate. There will always be more to do, and basing your happiness on getting more done in a day is going to result in disappointment. Make your to-dos manageable, and make time for the things that really matter in life, like family, friends, and enjoying the benefits of all that hard work. In the end, that’s what being truly productive is all about.

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Avoiding Financial Pitfalls During Divorce

Avoiding Financial Pitfalls During Divorce

By Kelly Kilpatrick

Divorce is a devastating time in a person’s life.  Unfortunately, divorce can also wreak havoc on your finances and can leave you without a safety net during a vulnerable time.  But, some good advice can limit financial hardship, which is especially important during a time in your life when you may not be thinking clearly.  Keeping tabs on your finances and credit history can mean the difference between a fresh start and financial ruin.

When you decide it’s time to end your marriage, there are several things you can do immediately to safeguard your finances:

Establish Responsibility

Look at all your bank accounts, mortgage, credit cards, utility bills — everything.  Know who has personal responsibility for each account.  Even if you’ve already decided who gets your property, you still need to establish sole responsibility.

Dissolution

Dissolve ALL joint accounts (mortgage, credit, utility).  If your spouse has access to your account, he/she has access to your money/personal information.  However painful, be sure you do this together with all the proper paperwork in place so everything is legal.   You need to close these accounts and open individual accounts.  Divide any remaining funds evenly.

Sell the House

This is the best and simplest solution for shared real estate holdings.  It is also the most equitable because it enables you to split the proceeds.  You don’t know what the future can hold and if you’re name stays on the deed, you are responsible if anything happens to the house.

Documentation 

This is especially important as you begin divorce proceedings.  Make sure all financial arrangements are made and all paperwork processed and filed.  You may need this information in the future and it’s good to have it ready now and can be used in court.

After you’re divorced, you must be vigilant:

Watch that score

You should already be doing this every year but it’s especially important to monitor your credit score after your divorce.  Your credit score can drop after a divorce.  And, you’ll be able to monitor activity on your accounts to ensure there is no unauthorized activity.

Tell your creditors

To head them off before the collection calls start on accounts no longer yours, call your creditors and tell them you’re divorced.  This may take a while and it’s a good idea to notify them in writing as well as over the phone.

Divorce is a complex and emotionally-charged process.  It can be difficult to “play hardball” when you’re hurt but it’s imperative for your future financial health.  Amicable divorces happen when both partners come to the table prepared, reasonable and rational.

Launched in May 2007, BusinessCreditCards.com provides a resource for any business owner or self-employeed individual who is searching for a better credit card.

Our blog, Bootstrapper, is a resource for any small business owner operating on a shoestring budget, and provides tips on financing, cash flow, low-cost marketing and small business loans.

Posted in Bootstrapping, Business 101, Divorce, Managing MoneyComments (2)



8 Bootstrapping Tips That Will Cut Costs Today

8 Bootstrapping Tips That Will Cut Costs Today

In order to maximize sales and improve marketing tactics, each small business must learn the fine art of bootstrapping. There are many ways to cut costs in order to leverage your assets. Some of these methods are complex and only gradually save money, which is fine if you have the luxury of waiting.

However, many businesses resort to bootstrapping out of urgent necessity and there are certainly ways to cut costs immediately. Below are eight bootstrapping tips that will show you quick results.

  1. Switch to VoIP – Many companies are saving thousands each year by using VoIP (Voice over Internet Protocol) providers like Skype. All phone calls are free between Skype users around the world and Skype-to-landline calls are cheaper than traditional long distance services.
  2. Sell Your Unnecessary Frills – Did you get overexcited when you opened your office and purchase some unnecessary goods? If you need to free up some cash for more important ventures, then you can certainly do without your hip decorations. Sell them on eBay or Craigslist.
  3. Stop Faxing Everything – Are long distance costs rising because of your constant faxing? There are cheaper alternatives, such as scanning documents and emailing them. Most companies will have no problem with receiving a PDF instead of a fax.
  4. Go Easy on the Thermostat – Energy costs are hard on everyone these days, not just small business owners. While you don’t want to create a terrible work environment for your employees, there is nothing wrong with asking them to bundle up a bit in the winter and dress cooler in the summer. That way, you can be a bit more sensible with the thermostat.
  5. Outsource That Open Position – If you are struggling to cut costs, then the last thing you need to do is hire more employees. Outsourcing is a preferred method of saving money for companies both small and large. Sites like Elance and Get a Freelancer are brimming with eager, virtual assistants who will save you time and money.
  6. Buy Secondhand / Refurbished Goods – The fact is, you don’t need a new desk or copy machine. You can find secondhand office furniture at many stores, as well as refurbished electronics. Conduct some research beforehand, however, and make sure you are buying from a reputable source.
  7. Go Open Source – There are numerous open source alternatives to the commercial software you may be considering. In case you haven’t heard, open source = free. Free is good, so find out more about open source software at osalt.com.
  8. Stop Paying for Lunch – Are you the type of boss who likes to buy lunch for everyone several times a week? That ends now if you want to leverage your assets to the max. Yes, even those pizza deliveries are adding up. For those of you who run a one-person operation, the same rule applies. Stop eating out and start packing your own lunch.

Great companies have been built with very little money and efficient bootstrapping skills. Don’t be afraid to start cutting costs on a smaller scale with the above tips. You will be surprised at how much money you will save… money that can be put toward marketing, for example.

[Image from Jeff Belmonte's photostream on flickr]

Posted in Bootstrapping, HighlightsComments (1)



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