Size, and administration are two things to consider.

401k offer maximum flexablity and plan design, but require more
andministration and typically cost more.

SIMPLEs are for small, less than 100, employers, and are easier to
aministrate than 401ks, but have lower employee deferral limits: $10k
vs. $14k in a 401k.

A SIMPLE has to have at least a 3 month plan year so if you want to
make contributions in 2005 your plan has to be set up by Oct .

Dennis,
Have you also taken either a SEP IRA or a Safe Harbor 401(k) into
consideration?

Between all qualified plans its a matter of purpose, size of
company(employees), and cost.

How many employees do you have/ do you think would participate?
Are you using this primarily for employee benefit or as a tax deduction
for the business?
What are you willing to spend on the retirement plan?

I'd be glad to help but I need a little more info.

-Justin

What are the guidelines/thresholds/rules of thumb that would help an
employer to determine when a Simple IRA or a 401K is the better way to
go.

Thank you.

Dennis