When Alicea Castellanos, thirty-seven, looks back, she has a hard time believing that she’s come so far. The co-owner of the successful accounting firm International Wealth Tax Advisors, Castellanos remembers the first two years after they launched as a blur. “Sometimes I don’t know how we did it,” she said. “I felt like I was just working, working, working all the time. It was like I was on autopilot.”
Despite this, Castellanos wouldn’t change a thing. She is proud of herself and how much she’s accomplished; and while she thinks it’s important that people who are considering starting their own businesses know how hard it can be, she doesn’t say this to discourage them—but rather to prepare them to do what they need to do to be successful.
Castellanos always dreamed of owning her own business, but it wasn’t until three years ago—when her then-boss, Jack Brister, asked her if she wanted to start an international tax planning firm with him—that she finally felt ready to take the leap.
“We had talked for years about potentially starting a company together,” she said, “but it had never really felt right.” At the time, they were both working at a large accounting firm, and going out on their own was a risk. “It was a little scary,” she said. “It felt like a big jump because we were used to being backed up by a big firm, and we were going to be on our own.”
Setting Up the Business
“Getting the business started became a job in itself,” she said. “There’s a lot to think about when you’re starting your own business. You have to think about space, furniture, technology, insurance, employees—everything.”
That led to a lot of long hours because they were doing the work to get the company set up while also serving existing clients and trying to find new ones. “I was continuously working during that period,” Castellanos remembered. “I’d work until I went to bed and then wake up in the morning with things to add to my to-do list. I think I was even working in my sleep.”
One person that Castellanos credits with making things easier during that time was Nick LLerena, a wealth management advisor at Northwestern Mutual.
Brister and Castellanos knew they wanted to protect their families, their business and their partnership. So they sought help to ensure that if one of them became disabled or died prematurely, the company could move forward and their families would be provided for.
When they met with LLerena, they felt he understood their needs perfectly. “Right after he presented his plan, we just said yes—let’s go with this,” Castellanos said. “We knew what we wanted, and he gave it to us.”
LLerena remembers the partners’ relief once they had their business financial planning in place. “For a company like theirs that depends on the work of the two partners so heavily, things like disability overhead and key person insurance are critical,” he said. “They ensure that the business can survive if something were to happen to either Alicea or Jack.”
They felt, according to Castellanos, confident that they would be able to weather whatever life threw their way.
Worth All the Work
Despite having to make a lot of sacrifices during the first two years, Castellanos has never regretted her decision. “I love owning my own business and being able to serve my clients the way I want to,” she said.
She’s happy that the business is now stable and that they’ve been able to hire more employees. That’s meant that she can work less and spend more time enjoying the fruits of her labor. “I feel proud of where we are now,” she said. “I’m also excited about the future. We’re providing a great service and doing the best for our clients, and we’re growing quickly.”
Staying Focused Is Key
The most important lesson Castellanos has learned is that you have to stay focused on your goal. “There will be things that happen, especially in the beginning, that will discourage you,” she said, “but they’re often just distractions that keep you from focusing on your business. Don’t let those distractions take your focus off creating the solid foundation your business needs.”
Business Planning Basics
Nick LLerena believes that one of the first things new business owners should do is open up a business line of credit. Even if you don’t need it right away, you’ll likely experience cash flow fluctuations or unexpected expenses at some point, and it will come in handy.
Protecting your family and your business in case of disability or death is critical. LLerena makes sure the businesses he works with have the proper personal and business coverage.
If you’re starting your business with a partner, LLerena suggests you talk annually about the business’ valuation in case one of you needs to buy the other out in the event of death, disability or the breakdown of the partnership. Buy-sell insurance can help finance this purchase in the first two circumstances.
Finally, LLerena believes it’s important to plan for your personal future while working to grow your business. He advises his clients not to forget to put money away for their retirement even while growing their businesses.
Northwestern Mutual is the marketing name for The Northwestern Mutual Life Insurance Company, Milwaukee, WI (NM) (life and disability insurance, annuities, and life insurance with long-term care benefits) and its subsidiaries. Nicholas A. LLerena is a Representative of Northwestern Mutual Wealth Management Company® (NMWMC), Milwaukee, WI (fiduciary and fee-based financial planning services), a subsidiary of NM and federal savings bank; an Insurance Agent of NM; and a Registered Representative of Northwestern Mutual Investment Services, LLC (NMIS) (securities), a subsidiary of NM, broker-
dealer, registered investment adviser and member FINRA and SIPC.