With all that is going on in the economy many people are asking themselves this question. There are challenges with this economy, but becoming your own boss also offers many advantages. Jobs are hard to find right now and starting a business can put some of that control into your own hands and allow you to create a job for yourself. The other thing I look at is opportunity cost– in a down-turned economy sometimes opportunity costs are less.
If you have been downsized, or are unemployed, starting a business brings very little downside in terms of opportunity cost on that other than what you actually invest in terms of money and time. What is your time worth? If I am retired and I am playing golf, starting a business means my opportunity cost for time is a round of golf or lunch with my friends. I may be very willing to give that up and invest that time in a business. In a down-turned economy certain costs are lower, rental space is cheaper and the cost of hiring people can be a little lower. In some economic situations, you can actually benefit from lower cost depending on the type of business that you are starting.
One of the main causes of failure is under capitalization, these are businesses that may have eventually been successful, but they could not afford to stay afloat long enough. But this is true for starting a business at any age. I also think businesses that don’t meet a market place need and are not selling what people are asking for could also lead to failure.
Whether you’re a start-up or purchasing an existing business, consider using your IRA or 401(k) to finance the business. You hit the ground running with a debt free enterprise and you can do it legally.
Here’s how to use your retirement funds to purchase a new business or franchise tax free and without penalty! And, it’s 100% IRS compliant.
The Employee Retirement Income Security Act of 1974 (otherwise known as ERISA) and the Internal Revenue Code firmly establish that retirement funds may be used to acquire or invest in a new or existing business as long as the transaction complies with IRS and ERISA rules and regulations. Because the IRS has stressed the importance of one-hundred percent compliance with these rules, it is crucial to work with a company that is operated by a team of in-house tax and ERISA such as those at IRA Financial Group to ensure the structure is fully compliant with IRS and ERISA rules. While their competitors were promoting this type of structure, which in many cases failed from a compliance standpoint, the IRA Financial Group’s in-house tax attorneys spent the last two years reviewing IRS materials in order to develop the Business Acquisition Compliance and Support Structure (“BACSS”). BACSS was designed as an IRS and ERISA compliant structure for using retirement funds to acquire or invest in a business tax free!
The IRA Financial Group’s tax attorneys will work with you directly to develop an IRS and ERISA fully compliant business acquisition or funding solution customized to your individual business, financial, and retirement needs.