LAST REVIEWED Nov 17 2021 7 MIN READ
By The Human Interest Team
It’s no secret: we admire the work of small business owners. Every day we are inspired by the persistence and brilliance of our customers, from consultants to contractors, restaurateurs to retailers. This last year, in particular, we’ve seen small business owners use their ingenuity to navigate lockdowns, pivot to new models, manage costs, and keep their employees, customers, and families safe. Being a small business owner through the past year has been challenging.
Our goal is to make one aspect of running a small business easier: retirement planning. Our retirement plans are designed specifically for small organizations–from sole proprietors to growing companies with hundreds of employees. We’ve thought carefully about how to support owners of these businesses through key stages of their journey.
Below are some ways that Human Interest helps elevate small businesses.
Starting your business
According to the Census Bureau, applications for new businesses surged in 2020. Entrepreneurship is alive and well. But that doesn’t mean the decision to hang out your own shingle is easy. New owners often sacrifice a stable income, take on debt, or put their own homes on the line. The return, they hope, will be a valuable business that represents a nest egg to see them through retirement. But the proverb about putting all your eggs in one basket is true.
Studies show that 12 million business owners nearing retirement entered the market looking to sell their business. However, many worry they might not be able to sell for the asking price, forcing business owners to sell at a discount or close and find employment elsewhere.
We believe no owner should have to choose between starting their business or saving for their retirement. That’s why we make sure our retirement plans are affordable for businesses of all sizes.
We do this by automating the administrative processes involved in managing a 401(k) plan and passing the resulting savings to our customers in the form of low and transparent fees, as well as by offering lower-cost investments. In fact, last year we went even further and eliminated all 401(k) transaction fees (over 20 in total) from our plans, further cementing our plans’ position as among the most affordable in the industry.
Hiring your team
That moment you hire your first employee is like no other. It’s exciting (you’re growing!) but also frightening (now you’re responsible for someone else’s livelihood…). And as you add to your team you need to address their needs. Attracting and retaining talent as a small business is not for the fainthearted. You’re competing against larger companies with fancy benefits and deep pockets. Naturally, you want–and need–to offer your staff the same financial security. Our approach is to offer flexibility.
For example, you could begin by offering employees access to a 401(k) with no employer match. 54% of our customers do this and it allows them to offer staff the opportunity to save, at a lower cost to the business. As you grow, your ability to offer a match may change, too. Luckily, there are different ways to offer an employer match. With our plans you can easily add or increase the match you offer at any time (or decrease it if needed).
Another option might be to offer a vesting schedule, which allows longer-serving employees to receive a match. The point is, we know that your needs will change as your team grows, and we’re there to make it as easy as possible to adapt. We even help you communicate with your employees about the plan, and we include features to encourage them to participate, like auto-enrollment and easy onboarding.
Handling growing pains
Growth is great, but it also means inevitable long hours and plenty of headaches. Most small business owners are so busy during the day on their core business that the administrative work is left to evenings and weekends. Tax returns, PPP applications, invoicing, credit card reconciliations, contracts–many of them happen outside the 9 to 5. That’s a key reason why many small businesses delay a 401(k) plan.
We empathize with late nights and dark circles under the eyes. That’s why we resolved to make our plans so simple they can be set up in 15 minutes. Our plans automatically sync with 100+ payroll providers, handle most compliance requirements, and produce reports so you can see performance and participation at a glance. We even make it easy to choose your investments, for example, by offering a professionally curated line-up of 30 low-cost index funds that focus on long-term growth.
Saluting small businesses
Whether you’re just starting out or already have an established venture, owning a small business is a bit like a rollercoaster—there are highs and lows, moments of exhilaration, and anxiety.
This month, as many small businesses turn their attention to recovery, we want to acknowledge their journeys. We’ll be sharing stories of small business owners’ challenging moments and how they rose to them–both here and on Facebook. Join us throughout the month in saluting the achievements of small business owners.
The Human Interest Team
We believe that everyone deserves access to a secure financial future, which is why we make it easy to provide a 401(k) to your employees. Human Interest offers a low-cost 401(k) with automated administration, built-in investment education, and integration with leading payroll providers.