“There is a tendency in our industry to ignore the small ones, but I think that’s a mistake,” she said. Although initial compensation is very low relative to the level of service required to open a small plan, she said, “You’re at the place where both the business and the employer need your advice desperately and long term.”
And because these plans generate many referrals and “such an expansion of your sphere of influence within your community,” she said, “they’re exquisitely important to take on.”
Most of her small-plan business has stemmed from conversations with business owners while evaluating their savings and business tax returns. “You’re introducing it usually in a situation where someone has come to you and said, ‘I’m working 70, 80 hours a week and I’m not able to save much and it’s not because I don’t want to—I don’t know how,’” she said. In response, she explains they can put away more for themselves and their employees and also reduce their business’s tax liability.
Owens has also reached out to some local businesses after hearing them voice frustrations at chamber meetings. She’s considered advertising, but for now the referrals keep coming, she said.
It often takes six months or more between meeting a client and getting a plan in place, said Owen, who added that coaching is required for plan sponsors. “The best value we bring to the table is we act as the quarterback to get all the members of their professional team on the same page,” she said.
The first step is ensuring a business is operating under the correct entity—half the time they’re not, she said—because that dictates what type of plan can be used. Getting it right initially “will save time, money and frustration,” she said, because changing an entity later can create challenges for a plan.
The second step is figuring out the best plan design based on such considerations as employee turnover, key-employee retention and cash flow, she said. Businesses seeking long-term success must be able to keep their most important employees, so Owens said she talks to their long-term and key employees about their total compensation.
Nonprofits need to be able to fund plans with variable contributions, she said.