Case Study Bob's Red Mill

I would not recommend Bob’s Red Mill to acquire the Employee Stock Ownership Plan as this is a Small business and they may not have the capital necessary to implement such plan. Instead I would recommend for them to establish a Profit Sharing plan for its employees. A Profit Sharing plan can be a powerful tool in promoting financial security in retirement. The plan accepts discretionary employer contributions. There is no set amount that the law requires the owner to contribute. If they implement this plan they can have other retirement plans and it would be good for them as any business of any size can use it. Some of its pros and cons include: flexible contributions, good plan if cash flow is an issue, administrative costs may be higher than
under more basic arrangements and need to test that benefits do not discriminate in favor of the highly compensated employees (“Choosing a Retirement”, 2015).