The key difference, however, is that you can add a 401(k) allowing employee contributions to a profit-sharing plan, but not to a SEP.

FORBES: Investment Guide: Self-Employment

For example, Adobe Systems Inc. in San Jose posts its employee benefits online, including deductibles for medical and dental insurance, payroll deductions for optional coverage and details about its sabbatical programs, 401(k) plan, profit sharing and employee stock purchase plans.

CNN: Does your Web site reveal too much?

For those in Mr. Davis's shoes, other possible solutions include establishing a profit-sharing or defined-benefit pension plan, or staying on the job as a salaried employee, consultant or paid chairman.

WSJ: Family Value: A Big Break for Family Businesses