Small business expert Carol Roth shares her biggest piece of advice for female entrepreneurs and asks a question that’s crucial to business growth.
If you have questions for Carol, please scroll down and ask in the comment below. Carol will do her best to respond.
About Carol Roth
Carol Roth is the creator of the Future File™ legacy planning system, “recovering” investment banker, billion-dollar dealmaker, investor, entrepreneur, national media personality and author of the New York Times bestselling book, The Entrepreneur Equation. She is a judge on the Mark Burnett-produced technology competition show, America’s Greatest Makers and TV host and contributor, including host of Microsoft’s Office Small Business Academy. She is also an advisor to companies ranging from startups to major multi-national corporations and has an action figure made in her own likeness.
Bank of America, N.A. engages with Carol Roth to provide informational materials for your discussion or review purposes only. Carol Roth is a registered trademark, used pursuant to license. The third parties within articles are used under license from Carol Roth. Consult your financial, legal and accounting advisors, as neither Bank of America, its affiliates, nor their employees provide legal, accounting and tax advice.
Inaugural Report Highlights Optimism in 2017 for Hispanic Small Business Owners
Hispanic entrepreneurs are one of the fastest-growing segments of the small business sector, making contributions to the economy and job creation like never before. In order to more acutely understand the unique experiences and perspectives of this group, Bank of America surveyed approximately 300 Hispanic small business owners from across the country about issues ranging from their economic and business outlooks for 2017, to their views on lending and the role that their communities have in the success of their businesses.
When you’re self-employed, investing for retirement is entirely up to you. Here are some ways to put away money for your future.
Start a savings plan. A popular option for the self-employed is a Simplified Employee Pension, or SEP IRA, says Thomas Carter, vice president of Personal Retirement Strategy & Solutions at Merrill Lynch. "These have a much higher contribution limit than traditional IRAs." Generally, a sole proprietor with no employees can make deductible contributions of up to 20% of her earnings from the business, up to the maximum annual limit ($53,000 for 2016). For traditional and Roth IRAs, the maximum is $5,500 ($6,500 for those aged 50 and older). As with traditional IRAs, you contribute pre-tax dollars to a SEP IRA, which won't be taxed until you withdraw the funds in retirement.
Contribute steadily. Freelancers often contribute one lump sum to a retirement plan at year's end, says Carter. "But that means investing a year's worth of savings all at once," he says. Regularly contributing smaller amounts may allow you to capture lower prices as markets fluctuate, depending on the market prices at the time you contribute.
Seek additional income. If your gig doesn't let you sock away enough money for retirement, look for other ways to generate income. "Perhaps you have a spare room to rent out," Carter says. "Or you might consider driving for a ride-sharing company a couple of evenings per week."
3 Questions to Ask Your Advisor
Could a SEP IRA be right for me?
How much can I afford to put towards retirement savings each year?
What are some more ways I can boost my retirement savings?
Keep in mind that dollar cost averaging cannot guarantee a profit or prevent a loss in declining markets. Since such investment plan involves continual investment in securities regardless of fluctuating price levels, you should consider your willingness to continue purchasing during periods of high or low price levels.
NEARLY A CENTURY AFTER JAZZ MUSICIANS of the 1920s coined the term "gig" to describe a temporary engagement at a club or concert hall, it has reentered the workforce lexicon. In today's booming "gig economy," millions of people, empowered by advances in digital technology and often motivated by difficulty finding full-time work, are relying on temporary engagements to earn a living.
While estimates vary, a recent study by prominent labor economists Lawrence F. Katz and Alan B. Krueger reported that 16% of American workers are involved in gig-type "alternative work arrangements," up by half from just a decade earlier.
The prototype could be the ride-share driver, a contract employee who's primed to pick up passengers at the buzz of a smartphone. There's also the recent graduate getting a foot in the door by doing project work at a company. Or a woman easing back into the workforce after raising her family. They're all joining mid-career professionals looking for a more flexible lifestyle, aspiring entrepreneurs, moonlighters and retirees whose talents remain in demand.
"Many retirees aren't quite ready to stop working, so they've created gigs to stay busy and enhance their finances," says Karin Kimbrough, head of Macro and Economic Policy at Bank of America Merrill Lynch.
How to Succeed in the Gig Economy Thriving in the gig economy takes a combination of skills, hustle, good luck and sound advice. Here are three people who are making it work for them.
Just starting out. Matthew Daray, 25, of Palatine, Illinois, studied journalism and creative writing in college and is currently on a six-month contract as a medical writer for a large pharmaceutical firm. "It's not a bad gig—for now," he says. "But full time is definitely the goal."
Daray is making his present situation work by living with his parents and staying on their health-care plan for as long as he's eligible. Meanwhile, he's talking with his family's Merrill Lynch Financial Advisor, Randi Merel, about ways to boost his savings so he'll be prepared for emergencies—not to mention long-term goals such as buying his own home. To bring greater discipline to Daray's savings strategy, "we've set up a regular transfer from his check-ing account to a savings account. We can then withdraw those dollars to invest," Merel says. "That way, he doesn't really miss the money."
Not ready to retire. Another of Merel's clients, 59-year-old Ric Noreen, joined the gig economy at a different stage of his career. Five years ago, he took an early-retirement offer from his job as a senior marketing and strategy executive. "It was an opportune time to start what I call a virtual consulting business," he says.
Thanks to technology, his new Chicago-area business, Waypoint Strategic Solutions, is able to serve a wide variety of clients across the country. And Noreen is loving the challenge. "One of the surprises to me is how transferable my skills are across industries," he says.
Noreen and his wife and business partner, Sarah, are empty nesters; their health insurance is covered by a provision in his early-retirement agreement. Still, with concerns about the uncertainty of their future income, the Noreens have worked with Merel to remove some of the risk from their portfolio. Says Noreen, "When the steady paycheck goes away, asset preservation becomes a bigger part of the strategy."
Jumping back into the job pool. After 15 years devoted to raising four children, Jane MacKeen of Sudbury, Massachusetts, was ready to return to the workforce, but not to her previous career in media sales. Instead, she earned a masters degree in dietetics. Starting in 2014, the former college swimmer began her current gig teaching corporate employees and private clients about wellness.
"Jane and her husband, Mike, did all the right things when she was younger—opening an IRA, putting money in a 401(k), starting to save for her kids' college," says Mary Mullin, MacKeen's Merrill Lynch Financial Advisor. Combining experience in sales with her love of wellness, gig work "has afforded me the opportunity to explore a new field, while still having time with my family as I transition back into the workforce," MacKeen says. And using her gig work as a bridge, she recently landed a full-time position at a company that uses wellness programs to help employers improve the well-being of their employees while reducing health-care costs.
Working Without a Net Whether you're making the move by necessity or choice, supporting yourself without such traditional benefits as paid vacations and employer-sponsored health-care and retirement plans requires careful planning and a clear sense of what's ahead. Here are some basics to consider if you're contemplating diving into the gig economy.
The health-care puzzle. Rising health-care costs are especially challenging for self-employed people if there's no employer chipping in. For some, the answer may be joining the plan from a spouse's job. Others may find coverage through HealthCare.gov, or through professional organizations that offer plans for freelancers. "You can also try to negotiate health care with some of your gig employers, perhaps in exchange for a lower salary," Mullin suggests.
An emergency fund. Keep in mind that in the gig economy your main client can cut payments, extend payout periods or even go out of business with little notice. "You'll need an emergency fund to be able to withstand those unexpected gaps between gigs and checks," says Thomas Carter, vice president of Personal Retirement Strategy & Solutions at Merrill Lynch. Finally, don't underestimate your regular expenses. Most of them, from your computer to your business car to tech support, will now fall on your shoulders.
Attention to taxes. "When you're working gigs, there's no automatic withholding," notes Carter. Instead, you'll likely be paying quarterly estimated taxes. This requires a greater degree of control over your spending, so that you have enough to cover taxes when they're due. Work with a tax professional who can help you set a strategy for paying taxes, taking advantage of any appropriate deductions.
Equally important advice, once you've gotten all your financial ducks in a row, is to enjoy being your own boss. As Ric Noreen puts it, "I am working harder, making more, and am more satisfied than I ever was. And my pedal is still to the metal—maybe even with a little bit more resolve."
The best way to get ahead in 2017 is to review what worked in 2016. But how should you go about it? Taking you step-by-step through the process, our new infographic will help you discover past trends and reveal challenges that you can prepare for now, as well as help you move forward with momentum into the new year.
Bank of America Survey Finds Family, Friends and Community Core to Small Business Success
Small Business Owners Remain Lukewarm on the Economy, Growth, Hiring
Small business owners are getting by with a little help from their friends, family and community, with 83 percent reporting they receive financial, operational and/or emotional assistance from their family, according the fall 2016 Bank of America Small Business Owner Report. For an overview of the insights of the nation’s small business owners, see the national infographic below. For additional insights, download the fall 2016 Bank of America Small Business Owner Report here.
Small business advocate Carol Roth and an expert panel, including the Small Business Administration’s Nick Maduros, the Small Business Majority’s Rhett Buttle and Georgetown Cupcake’s CEO, Stephen LaMontagne engage in a resources briefing and discussion on the latest news, trends and policies relevant to small businesses. Ealier in the video, Bank of America Head of Small Business Sharon Miller also provides an overview of the Spring 2016 Small Business Owner Report research.
Finding time to take a vacation can be difficult for many small business owners. But statistics show that time off can make you happier and healthier, as well as help you achieve a better work/life balance. In our new infographic, we have some helpful tips on how to run a business and find the time you need to take a break from the office.
May is Small Business Month at Bank of America, highlighted by the release of our spring Small Business Owner Report, a semi-annual study that explores the concerns, aspirations and perspectives of small business owners throughout the U.S.
Citing their anxiety over government leaders and the upcoming election, small business owners’ confidence in the national economy has been tempered, according to Bank of America’s spring 2016 Small Business Owner Report (PDF). Bank of America conducts this survey of small business owners twice a year, releasing its spring report to coincide with National Small Business Week, which began this past Sunday.
This year’s spring report found that small business owners’ confidence in the national economy has fallen 19 percentage points over the last year, from 48% in spring 2015 to 29% now, while confidence in their local economies is down 11 percentage points, from 49% in spring 2015 to 38% in spring 2016.
Despite some concerns, anxiety over economy trends down
The biggest factors leading to this downturn in optimism are the concerns small business owners harbor about the effectiveness of U.S. government leaders, health care costs and the stock market. Nearly four-fifths of small business owners expressed concern that the effectiveness of U.S. government leaders will impact their business, a 10 percentage-point increase from spring 2015.
In fact, small business owners expect the presidential and congressional elections to impact them, and are taking their business into account when voting:
67% report that this year’s presidential election will affect their business “a lot” or “somewhat”
53% report that the upcoming congressional elections will affect their business “a lot” or “somewhat”
Health care costs are also a big concern with almost three of every four small business owners concerned about the impact on their business. Small business owners are also watching the U.S. and global stock markets, with more than half fearing an impact on their business.
However, the news isn’t entirely pessimistic as small business owner anxiety about other economic factors declined since spring 2015. For example, their concerns dropped by double digits on consumer spending, interest rates and credit availability. There was also a downward shift in concern over commodities prices, corporate tax rates and strength of the U.S. dollar.
“Small business owners are taking a wait-and-see approach before making plans for expansion and growth,” said Robb Hilson, Small Business executive. “Interestingly, while anxiety over the U.S. and global stock market has increased since last year, concern over the other economic factors we surveyed has declined.”
Small business owners revise hiring, growth plans
As Robb indicated, small business owners are not aggressively planning for growth, but they also don’t anticipate downsizing. This wait-and-see approach most likely stems from the pending outcome of the presidential election and policy questions that hang in the balance.
Small business owners are less bullish on revenue growth and expansion plans, with only half expecting a revenue increase over the next 12 months, while 40% say they expect their revenue to remain flat over that same time period. While 55% of small business owners still plan to grow their business over the next five years, the number of those who anticipate doing so is down from previous years.
“The small business owners we surveyed indicated their revised revenue and growth projections also affect the plans they had to add more employees,” Robb said. “In fact, the majority of small business owners we surveyed this spring plan to keep the same number of employees over the next 12 months, perhaps suggesting they are waiting until after the election to reassess hiring plans.”
Small business owners prefer to hire Gen-Xers
When they are hiring, small business owners indicated a strong preference for Generation X candidates. Nearly half report that skill level is the single most important factor in hiring, followed by a candidate’s fit with company culture. Small business owners reported that other factors, such as previous work experience and education, were less critical in hiring decisions.
In general, small business owners favor candidates who are trustworthy, hardworking and experienced. They are less concerned with sales ability and tech savviness — or even a college degree — when evaluating prospective hires.
They are finding those qualifications most in job candidates who are between 35 and 50 years old. Nearly half (47%) say they would choose to hire Gen-Xers, while 26% prefer Millennials, and 8% gravitate toward Baby Boomer candidates.
That’s why we’d like to thank you for everything you do, and we look forward to helping your business grow even stronger. Check out our infographic to learn how small businesses across the country are making a difference every day.
Military veterans are finding robust careers as small business owners. According to the Small Business Administration, veterans are 45 percent more likely than non-vets to be self-employed. The same traits that drive entrepreneurship—discipline, focus, and a can-do attitude—are found in many veterans, making small business ownership a natural career move.
Take a look at some of the other ways vets are succeeding as small business owners.
Every owner’s story is different. But as a group, there are five common and positive characteristics that help shape their approach to life and wealth. Find out what these shared traits are – and the opportunities and challenges that come with them – in our new report, “Five Attributes of Today’s Business Owners.”
Advice and insight from entrepreneurs who successfully sold or transferred their businesses to family members.
We feature the first-hand experiences of eight entrepreneurs from diverse industries who have tackled this critical transition. We are indebted to the Eugene Lang Entrepreneurship Center at Columbia Business School for collaborating with us on this project. And we are deeply grateful to the entrepreneurs who shared their stories with candor and graciousness.
As the following case studies attest, entrepreneurs encounter distinctive issues with every exit. Each situation is unique, reflecting the diversity of business owners and enterprises. One theme recurs, however: the magnitude of this transition. Selling or transferring a business has critical ramifications for an entrepreneur, his or her family, employees, and community. Entrepreneur Charles Scheidt aptly reflects, "building and nurturing a fascinating business is immensely demanding and ultimately satisfying. Letting go of it, selling it, is both a very difficult decision and a stressful process."
The most successful transitions require entrepreneurs to orchestrate finely tuned exits. But in a lifestyle that is already supercharged with responsibilities and deadlines, taking the time to initiate the planning process early is often neglected, a situation that can greatly affect the choices available and the ultimate value of a life's work. Without this planning, "business owners are often forced to exit on other people's terms."
Most of the time, you just want to find content that has a particular phrase. Here are the easiest ways to find the content you want.
Enclose your search phrase in quotes. Search will try to find content with those words in the order you enclosed them. A search for "marketing advice" is going to return content with the phrase "marketing advice".
Search for content that has certain words, but not necessarily all of the words in order. This is the most basic search. Simply enter your search terms. For example: accept credit cards This will search for documents containing the words accept, credit, and cards
Using OR. The OR operator links two terms and finds a matching document if either of the terms exist in a document. To search for documents that contain either "web design" or just "online marketing" use the query: "web design" OR "online marketing"
Using AND. The AND operator says that the search should return content in which all of the search terms are present. To search for documents that contain both "web design" and just "online marketing" use a search like this: "web design" AND "online marketing"
We would appreciate having your voice in the Small Business Community. You can participate in a number of ways.
Start a discussion in our member-to-member forums. By participating in the Small Business Community, our members gain knowledge and connections that give them a competitive advantage in building a successful business. Take advantage of the collective experience and expertise of the community to get small business ideas and help with a specific question or business challenge.
To post your question in our community, in the “Ask the community” section, from the drop-down, select the category that you’d like to post to, then click the “Start a Discussion” button. If you simply want to introduce yourself to the community, please select the “Introduce Yourself” category.
Note: you must be a logged-in member of the community to post a discussion. Please login or become a member to participate.
Share your small business story. Do you have an interesting story to tell related to your small business? Have some advice for other entrepreneurs to help them avoid some of the pitfalls of small business ownership? We invite you to share your story with the Small Business Community. Click the “Share Your Story” link and simply answer the questions in our Share Your Story template.
Answer a question. Are you an expert in a particular area of running and growing a successful small business? Would you like to help other small business entrepreneurs by answering their questions? We would appreciate your expertise in the Small Business Community. Please click the “Answer a Question” link to see a list of the open questions asked by members of the community.