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Looking for some new businesses to start may seem risky at first. But if you have the extra cash or access to cash, you may be able to start one that gives you better returns in the long run. Why do people start their own businesses? There are many reasons but primarily it is to make money. In most cases, people decide whether to put their money in the bank to earn interest or to invest in a new business to earn money. There is what you call a hurdle rate which is the rate of interest in the bank. If the bank is offering you 5% return annually on your money, then when you start a business, you should be able to make more than 5% annually for it to be worth your while. Otherwise, it is better to leave your money in the bank and just let it earn the interest, at no extra hassle to you. Still, there are deeper reasons for people starting their own businesses. Perhaps it is the desire to change careers. After a long stint in the corporate life, there are some folks who want a change and would want to venture on their own. Another reason is the presence of an opportunity. Working with an industry sometimes presents an opportunity for people to take, especially since they are privy to some information that may make them earn money. For example, let's say you work in a logistics company and there is a need to service a client that does not need so much warehousing space for their products. If you can source out a smaller warehouse, subdivide it into smaller lots, add roll up garage doors for these entrances, and then resell them to clients who don't need a lot of space, then there is the opportunity to make more money by becoming a specialized logistics company on smaller warehouses. The same can be true in turning an abandoned warehouse into a self storage facility. Again, the space inside can be subdivided, roll up garage doors can be installed into the divided space, and you can lease out or rent out the self storage space. Perhaps the most important personal reason for starting a new business is the passion for the business itself. There are stories of corporate people who give up their jobs and run eco-tourism businesses like river rafting, mountain hiking and exploration; even survival courses because these things are important to them. It is their passion. If you decide to start your own business, it is best to start one that you have passion for and something that you also know. That way, it won't seem like work at all.
They still have mortgages to pay. Lifestyle change Everybody has their own idea of the ultimate lifestyle. bills to pay and children to feed. . Desire for independence After taking orders from your boss for a while. Fulfilling a Purpose in Life There is more to life than waking up going to work for 45 years and then retiring to some secluded old ±age home. they have no other choice but to go out there and make their own money. it could be getting up late. Working for a pay check never guarantees that you will have a better life. never having to work on Friday or having time to train in the morning. 4. what you can or cannot wear and when you can take a holiday. One of the ways to ensure that you have lived your life is to ensure that you have created something that will take care of you and your family for many years to come. You get sick and tired of having your life dictated to by others ± what time you have to be at work. what do you do? Do you relocate and become a migrant worker living your partner and children behind? You need flexibility in your life to make sure that your family is cared for. When they don't find a job immediately. Change in circumstances When your company relocate hundred of kilometres from your home and commuting is impractical. 3. 5. while they still have expenses to pay. People want to know that they have really lived. Quit your job once your business income exceeds your current salary. Others. Before living your current employer it is recommended that you start small. people just don't want to do that any more. and starting your own small business is the way to do that. Necessity People who have lost their jobs. It's difficult to live the lifestyle you dream about if you are working for someone else.WHY PEOPLE START THEIR OWN BUSINESS 1. For some. but running your own business fills that need and gives you a real sense of achievement. People want to be able to make decisions based on what's best for them. it could be the ability to work from anywhere in the world and from their home. putting a few hours a week in the evenings and weekend working on your business. Doing things that they love to do. Sometimes people are forced to start their own business when the living expenses have gone up and they find themselves unable to make a decent living from their salaries. You need to be able to set your own hours especially when your children are still young. 2. often find they have their livelihoods ripped out from underneath them.
7.6. µyou're either making yourself rich. You can leverage other people's skills. They forget that it is even more risky to rely on somebody else.' . Creating true wealth and financial freedom It is difficult to become wealthy working for someone else. unless you have been trained from an early age how to be highly disciplined with your savings and you have learned how to become a good investor. time and build something that you can sell down the line or set it up in such a way that it provides you with passive income for life. Building your own business may not be easy. It is much better to be the captain of your own ship where you always know what the situation is. As the saying goes. Starting your business is next best thing to do. Being in control of their own future People have been conditioned to believe that it is risky to be in business for yourself. but it is the next best thing you can do to multiply your efforts. or you're making somebody else rich.
Avoids traffic and the stresses of commuting during rush hours. it is important to remember that you may be pressured into accepting a salary sacrifice arrangement. This is of particular use for utilities such as mobile phones. competition is fierce for work at home jobs. Reduced consumption of employee commuting time and fuel costs. morning person vs. As an employee. (eg. Further information on salary sacrifice is available in an article elsewhere on this site. if your employer pays for your mobile phone. Through cooperation with your employer. Reduces employee burnout due to overload.WORKIN FOR AN EMPLOYER Many people prefer to work for an employer rather than try to start a business of their own. and life responsibilities conveniently. Finally. plus you often have many benefits not available to the self-employed. and you are happy with the price at which they are being offered (that is. for example. night person). the portion of your salary that you are giving up in return for the benefits). you should be able to negotiate a benefits package that provides a tax advantage. employees experience these benefits: y y y y y y Flexibility to meet family needs. .. and enjoy working. Working for an employer can provide a better sense of "stability" (as stable as possible. if some of the activities or utilities that you would be paying for anyway are available as benefits. you will have a clearer idea of your cashflow situation and will not have to set money aside for these things. if the benefits are attractive then you will have access to useful offerings such as a pension scheme or company car. let your employer know right away. Increased feeling of personal control over schedule and work environment. without having to make these arrangements yourself. You should only agree to this if the benefits being offered are useful. With flexible work schedules. anyways. but remember that you can also find opportunities right in your own back yard! If you are injured on the job or diagnosed with an occupational disease. Employers need to know about injuries and be familiar with the situation when the L&I paperwork arrives so that they can help you plan your return to work Some of the advantages of accepting a benefits scheme for an employee are obvious. feel freshest. in this age of layoffs). Sundries such as this can represent a significant tax saving over the course of a year. tax advantages are extended to employees as well as employers.. In the first instance. Not surprisingly. personal obligations. Furthermore. this is treated as a nontaxable benefit. which can be provided as a non-cash benefit by an employer. There are resources online to help you look for home based work for an employer . Allows people to work when they accomplish most.
wellness programs. and possibly other miscellaneous employee discounts wellness programs. and²when multiple choices exist²first choice of such things as job assignments and vacation scheduling.). medical. transportation benefits. United States Employee benefits in the United States might include relocation assistance. vision and dental plans).). group-term life and long term care insurance plans. retirement benefit plans (addition to Canada Pension Plan (CPP). etc. leisure activities on work time (golf. adoption assistance. movies and theme park tickets. and so on). Employee Assistance Plans (EAP). child care benefits. stationery. Where an employee exchanges (cash) wages for some other form of benefit. prescription. 401(k). tuition reimbursement. vacation (paid and non-paid). retirement benefits. In most countries. group insurance (health. discounted shopping. hotel stays. Canada Employee benefits in Canada might include additional health coverage that are not included in the provincial plan such as (medical. and so on. They may also be given first chance at job promotions when vacancies exist.g. retirement benefit plans (pension. Group Term Life & Accidental Death & Dismemberment. and possibly other miscellaneous employee discounts (e. life etc. hotels and resorts. . most kinds of employee benefits are taxable to at least some degree. health and dependent care flexible spending accounts. perquisites. health and dependent care. disability income protection.sick leave. and long term care insurance plans. profit sharing. hotels and resorts. transportation benefits. allowances for lunch. The term perqs or perks is often used colloquially to refer to those benefits of a more discretionary nature. Group Disability (STD/LTD). and other specialized benefits. social security. discounted shopping. y y The purpose of the benefits is to increase the economic security of employees. Often. legal assistance plans. this is generally referred to as a 'salary sacrifice' arrangement. 403(b)). may decrease external childcare hours and costs. daycare. y y Some of these benefits are: housing (employer-provided or employer-paid). funding of education. free refreshments. perks are given to employees who are doing notably well and/or have seniority. Common perks are take-home vehicles.. prescription.y Depending on the flexible work schedule chosen. legal assistance plans. Employee benefits and (especially in British English) benefits in kind (also called fringe benefits. dental. perqs or perks) are various non-wage compensations provided to employees in addition to their normal wages or salaries. vision and dental plans.
section 119(a) only applies to meals or lodging furnished "in kind. 403(b)'s). therefore. golden handshakeand golden parachute plans). employer provided meals and lodging may be excluded from an employee's gross income. (2) for the employer's convenience. The term "fringe benefits" was coined by the War Labor Board during World War II to describe the various indirect benefits which industry had devised to attract and retain labor when direct wage increases were prohibited. employer provided benefits are tax-deductible to the employer and non-taxable to the employee.000) may be excluded from the employee's gross income and. but employee benefit products provided through insurance contracts are regulated at the state level. Some benefits would still be subject to the FICA tax.Some fringe benefits (for example. In addition. Normally. Employee benefits provided through ERISA are not subject to state-level insurance regulation like most insurance contracts.g. If meals are furnished (1) by the employer. Importantly. accident and health plans. these plans are funded by both the employees and by the employer(s). and contributions to flexible spending accounts are exempt from FICA." Therefore. some life premiums. and (3) provided on the business premises of the employer they may be excluded from the employee's gross income per Section 119(a). If certain conditions are met. lodging furnished by the employer for its convenience on the business premise of the employer (which the employee is required to accept as a condition of employment) is also excluded from gross income. cash allowances for meals or lodging received by an employee are included in gross income . such as 401(k) and 403(b) contributions. United  Kingdom In the UK. The exception to the general rule includes certain executive benefits (e. . are not subject to federal income tax in the United States. These plans would offer a menu and level of benefits for employees to choose from. health premiums. Some function as tax shelters (for example. The portion paid by the employees are deducted from their gross pay before federal and state taxes are applied. These benefit rates are typically calculated using fixed percentages that vary depending on the employee¶s classification and often change from year to year. 401(k)'s. however. Fringe benefits are also thought of as the costs of keeping employees other than salary. American corporations may also offer cafeteria plans to their employees. In most instances. Employee Benefits are categorised by three terms: Flexible Benefits (Flex) and Flexible Benefits Packages. Voluntary Benefits and Core Benefits. and group-term life insurance coverage up to US$50. flexible spending accounts.
They can be run inhouse or arranged by an external employee benefits consultant. Usually the sacrifice is made in return for the employer's agreement to provide them with some form of non-cash benefit. Employee Discount schemes are often setup by employers as a perk of working at the organization. Fideliti. is where employees are allowed to choose how a proportion of their remuneration is paid. Imagine.   Voluntary Benefits is the name given to a collection of benefits that employees choose to opt-in for and pay for personally. Currently around a quarter of UK employers operate such a scheme. with TheChartered Institute of Personnel and Development additionally anticipating a further 12% rise in adoption within 2008/9. Sodexho. In a salary sacrifice arrangement an employee gives up the right to part of the cash remuneration due under their contract of employment. usually called a "Flex Scheme".  This is normally delivered by allowing employees to sacrifice part of their pre-tax pay in exchange for a car. Core Benefits is the term given to benefits which all staff enjoy. a shorter working week or other similar benefits. These tend to be schemes such as the government-backed (and therefore taxefficient) Bike2Work and Childcare Vouchers (Accor Services. This has coincided with increased employee access to the internet and studies suggesting that employee engagement can be boosted by their successful adoption. Adoption of flexible benefits has grown considerably over the five years to 2008. A number of external consultancies exist that enable organizations to manage Flex packages and they centre around the provision of an Intranet or Extranetwebsite where employees can view their current flexible benefit status and make changes to their package. additional holiday. KiddiVouchers. .Flexible Benefits. sick pay and sometimes flexible hours. such as holiday. The most popular types of salary sacrifice benefits include childcare vouchers and pensions. Early Years Vouchers Ltd) and also specially arranged discount schemes for employees such as group ISAs. or give up benefits for additional cash remuneration. Busybees. In recent years many UK companies have used the tax and national insurance savings gained through the implementation of salary sacrifice benefits to fund the implementation of flexible benefits.
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