The company directory includes more than one name. So now it's time to think about the kind of benefits to offer employees.
Experts say one perk not to skimp on is a retirement-savings plan.
Here's how to do it without short-changing your own retirement:
Be a good employer
A retirement plan is less expensive than health care coverage and can engender a lot of good will among employees. "The responsibility for seeing that the American public retires with some sense of security is on the shoulders of small businesses," says Joseph Birkofer, CFP, a principal at Legacy Asset Management in Houston.
"The fact is, the average employee saves only $3,000 a year. You can't retire on $3,000 a year. People don't realize they need about $1 million to retire." While you can't retire people on any of these plans, you can certainly make them think twice about saving for the future. For example, where else can someone with only $5,000 in retirement savings get some expert advice? To offset the plan's costs, build the expense into the price of your products or services.Beat the competition
If altruism doesn't appeal to you, how about your bank account? Experts say that a retirement-savings plan will help in the recruitment and retention of valued employees. One company recently hired Birkofer to set up a plan similar to that of a big oil company because its aim was to hire away those employees. "If you are in the game, you have to have a retirement plan," he says.
Keep it simple
If you can afford it, offer a pension plan. But for many small businesses, a 401(k) "is the only game in town," says Birkofer. Still, don't be afraid to ask if your business qualifies for other products like a super 401(k) (a mix of retirement and profit sharing), a Roth IRA (tax-free money when cashed out), even a solo IRA where your employees are treated as independent contractors, says Todd Rustman, CFA, CFP, president and wealth manager at GR Capital Asset Management LLC.