Pensions for small business owners

Whilst owning your own business is great many small business owners forget that one day they may wish to retire. The reason why pensions aren't normally a consideration for a startup is because start up businesses tend to be cash poor and focus on reinvesting all cash in the business. However, this behaviour can inevitably become habit resulting in the individual never putting into a pension.

In the UK the government has sought to try to find a solution to this problem. As of April 2016 small businesses with even just the one employee are required by law to provide a pension. This means that even for those small businesses when the owner is the only employee they are required to put into a pension. Unfortunately, small business owners are allowed to formally opt out of this requirement. As you can imagine, most do opt out. This is an understandable action but doesn't help the business owners in retirement.

Small businesses forty years down the line

Let's say that you ran your own small business from your 20s right up until you could claim the state pension. After forty years of business you're ready to retire and you haven't got a penny saved in a pension pot. Yes, you've paid off the mortgage on the property that you live in and have some savings but not enough should you live well into your 80s. What are your options?


You could downsize your property. Sell your current home, release the equity, go and live someone cheaper and smaller and use the excess profit to live off in retirement. This strategy is a bit of a gamble as you may not necessarily have enough.

Business property

Perhaps the business owns property that you could sell. No brainer really!

Sale of the business

Have you considered that you may be able to sell the business? If this is an option for your retirement plan then you need to be thinking today how a would-be buyer might view the Company. You need to ensure that all the accounts are accurate and in order demonstarting a long history of growth and cash production. 

In addition you need to be thinking about what a prospective buyer might be looking for. Consider that you have a consulting business. The business relies solely on the intellectual property of the consultant, so what on earth could the consultant do to make the Company worth buying. They could create documents and templates of best practice, they could create a customer list and a supplier list and a list of key contacts, they could create a brand presence for the business, or else they could produce a product to actually sell to customers today along with the advice. All of these things give the Company a value that a would-be buyer may actually be interested in.

Licencing or sub-contracting

You could keep the business running but subcontract or licence out the word. Easier written than actually done. This would require years of building up a reputation to ensure the work keeps coming in. It would also require a transition period where you could start to pass on some of the work that comes in to reliable subcontractors. Finally, it would require quality control checks, training and admin for those to whom you subcontract.

Dividend strategy

Finally, rather than selling the business you may consider keeping the business running. Hire I a manager to continue the business. They would continue the business and potentially even grow it and you could remain the shareholder and collect your dividends well into retirement. Obviously this strategy is quite dependent on the type of business you have. A consulting business could not simply be run by a manager for example.

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Revealed: Health & Safety Is The Secret To A Brilliant Business

The following post has been contributed. Please note that the following post may contain affiliate links:

There are many business secrets that not a lot of people know about. These are things that happen behind the scenes of a company. Things that you’ll only know about if you’ve had the experience of running a business before. Or, if you speak to business experts, and gain that knowledge from them.

I’ve spoken to many different people about what makes a company tick. Most of the time, they give me the same generic answers. So, I ask them to dig a little deeper and tell me something that I haven’t heard before. And, you’ll be surprised at what they say. Many experts will claim that health and safety in the workplace are the backbones of a successful business. I know, it sounds a tad far-fetched, right? How on earth are health and safety relevant to a business?

Most new entrepreneurs barely give it a second thought. Sure, they ensure their workplace is safe, but that’s about as far as they go. Well, in this piece, I’m going to talk about some reasons why health & safety is so important. And, I’ll give some tips on how you can up your health & safety game.

Healthy Employees Are Good Workers

Let me ask you something, have you ever tried working when you’re sick? Have you ever gone down to your place of work and tried to do your usual routine in bad health? If you have, then you’ll know that it’s hard. It’s impossible to perform at your peak when your health is bad. Bearing that in mind, a business that doesn’t care for the health of its employees will suffer. If your staff are all in poor health, then they won’t work as well as they can.

And, it’s important to note that their mental health needs to be taken into account too. Employees that are stressed or depressed won’t be able to perform to the standards you need. As such, your business suffers, and you lack efficiency. To counter this, you need measures in place to ensure your staff are healthy. One idea is employee assistance programmes; they can help your staff cope with various health problems. If they suffer mental stress, then they can get the assistance to get over it. Another thing that’s popular in Japan is exercise in the office before work. They spend some time in the morning doing yoga or stretching. This helps employees release tension and ensure they’re physically in good health. Healthy workers are good workers, so don’t overlook this!

Accidents Are Costly

Having an accident in the workplace can be costly on multiple levels. For one, the accident can cause an employee to be injured. As a result, they may need lots of time off work. So, you’re left with two choices, both of which will cost you. Firstly, you pay them sick pay and hire a temporary replacement. This now means more money is leaving your business, as you have another employee to pay. Secondly, you can pay them sick pay and try to get on with things without them. You won’t need to spend more money, but productivity will suffer. With your new lack of productivity, you may earn less money in their absence. Either way, you’re going to lose money.

Also, someone can sue you in the event of an accident. An employee or customer can sue you if they get hurt in your place of work. If they’re successful, then you may have to fork out lots of cash. Even if they’re not, the lawsuit can take up a lot of time and resources. To avoid all of this hassle, you need to make your workplace safe. Take safety as seriously as you can; it helps you save money and stay out of trouble. It doesn’t take much to create a safe working environment. You’ll have fewer disruptions, and your company can carry on being as productive as possible.

Now you can see the impact health & safety has on business. It sounded a little bit strange at first, but the evidence is clear. There’s no arguing that healthy employees are better than non-healthy ones. The problem is, a lot of your staff are in poor health because of their job. Sitting at a desk all day, or standing at a cash register, is not good for them. It can cause all sorts of stiffness and aches and pains. Similarly, an unsafe work environment can be very disruptive. It’s hard to drive a business forward when you keep having disruptions.

To sum up, you must make health & safety a top priority if you want your company to be the best it can be.

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Here Are the Ways Your Employees Are Losing You Money

The following post has been contributed. Please note that the following post may contain affiliate links:

Every business owner is concerned about the money their business is making. The highest cost of most businesses, of course, is in employment. So you need to make sure you’re not overspending here. Is that possible? Just check out this article for the biggest costs involved in employment.

Being recruited in the first place

It’s a truth, but it’s a harsh one. Business owners often hire full-time employees that they don’t really need. You need to consider the fact that the costs of recruiting an employee in the first place aren’t negligible. The average company will spend thousands of dollars recruiting a single employee, even if they’re not fully aware of it at the time.

You may have thought that your startup needed a full-time financial controller, or an IT expert on-site at all times. But this is true for very few companies. If your office only has, say, less than fifty employees and deals mainly in small-scale projects? Then it’s highly unlikely you need such positions to be filled five days a week. This is why you should consider looking into outsourcing instead of full-on employment. You can get the job done as and when you need it. Otherwise, you may have employees who can’t do anything but twiddle their thumbs for most of the week.

Too high a salary

Woah, there! This is a controversial area if ever there was one. But let’s face it: we’ve all met people, often people who work in the same office as us, who are paid way too much for what they do. Of course, you don’t want to go cutting everyone’s salaries just because you want to make a few extra dollars. You can’t just cut an employee’s earnings because you’ve suddenly come to the conclusion that you’re paying them too much. You have to provide a reason, and if that’s your only reason, they’re might be eligible to take legal action against you.

Really, it depends how high “high” really is. The chances are that this particular problem won’t affect you very much. The kinds of businesses that really need to deal with this problem are the massive, multi-billion dollar companies. The ones who pay their executives millions a year. If that’s not you, I’d suggest tackling your problem another way.

Not even turning up

In a perfect world, employees would never get sick. Heck, in a perfect world, no-one would ever get sick. Actually, now that I think about it, I’m pretty sure no-one would ever actually have to work in a perfect world. So let’s dispense with the hypothetical utopias and leave it at this: sometimes, employees simply can’t be at work. That’s not great, but it’s something employers will just have to deal with.

But that doesn’t mean you can’t worry about the costs that you incur when employees aren’t at their desk. Even if you pay your employees in accordance to attendance, a missing employee can still cost you revenue. (Paying according to attendance would be in contrast to, say, a fixed salary. This technically costs you more because you’re still paying the employee despite their absence!) Of course, people won’t turn up to work for several reasons. Sickness, family emergencies, inclement weather. Whatever the reason, you should be tracking absence and incurred costs via absence management.

Unhappiness and stress

When we think about employees “costing us money”, we often sound accusatory. We speak about the problems that could be avoided by the employee, or as though the employee is the problem just because they exist. Basically, we tend to shift blame towards them. But the things that really cost your business are the costs that go unnoticed. They’re the costs that come with a loss in productivity. And I’m not talking about obvious losses in productivity. I’m talking about the fact that employees are rarely working at their full potential. Why? Because so many employees, in pretty much every industry, are unhappy and stressed out.

Many business owners choose not to tackle these problems. They see unhappiness and stress as simply part of the working life. After all, we can’t pretend that every employee in our company is working for us out of sheer passion. Most of them are there because they need the paycheck. With that in mind, aren’t unhappiness and stress inevitable? Why try to fight them?

Fact: a happy worker is a productive worker. A given employee doesn’t have to be in love with the job itself in order to enjoy coming to work. A business owner should always be working towards making the workplace an enjoyable and less stressful place to be. I’m not saying you should turn the office into a play park, or into some Zen-like modern area. But there’s always something you can do to improve things here.

Do you like what you've read? Tell your friends by sharing it with one of the buttons below. Please post this to Facebook or Tweet it to help your friends and family. Feel free to send me an email (, find me on twitter @millionairer0ad or comment. Whether good or bad, I want to hear from you all.


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