From Startup to Succession: Wealth Planning for Entrepreneurs with Nelisha Firestone

Episode Description:

In this episode, host Elizabeth Ledoux is joined by Nelisha Firestone, who helps people in the financial world stay healthy and whole. A wealth advisor and the founder of Firestone Financial Group, Nelisha works with owners through all stages of their business. Tap or click the play button below to listen to: From Startup to Succession: Wealth Planning for Entrepreneurs with Nelisha Firestone.

Nelisha and Elizabeth delve into the intricacies of financial planning and estate management for business owners. Nelisha shares personal anecdotes, stressing the importance of establishing trust and relationships with financial advisors early on. She also emphasizes the need for business owners to diversify their wealth beyond their primary business to mitigate over-reliance on a single income source. The conversation also explores building a team for business succession and retirement planning, emphasizing the role of successors for smooth business transitions.

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From Startup to Succession: Wealth Planning for Entrepreneurs with Nelisha Firestone Transcript

Nelisha Firestone: I think if you’re considering, you know, going into partnership with somebody, partnerships are hard, you know, because everybody’s coming to the table with baggage, if you will, you know, meaning you know, how they operate, you know how they move in the world, that kind of thing. So, when you’re setting a partner, everybody’s on their best behavior, it’s kind of like dating, you know, so they’re going to show you their best side, I think the most important thing when you’re considering making a change with your business is number one, you know, obviously, don’t take it lightly, but try to find out what they’re not telling you. You know. And fortunately, so many of us live our lives online anymore. So there’s a lot you can find out by checking out somebody’s Insta profile, Twitter, Facebook, LinkedIn, you know, where do they how do they move in the world? What do they put out there for others to digest? You know, is it all self promotion? Or is it valuable? Kind of look under the hood a little bit more?

Elizabeth Ledoux: Welcome to the business transition roadmap. My name is Elizabeth Ledoux. And through my years, I have seen how communities thrive. When business succession and transition are done. Well, me and my team at the transition strategists have been helping business owners develop and implement transition strategies for over 30 years. And on this show, we want to help you by giving you the roadmap to a healthy business transition. Let’s get started. Hi, everybody, and welcome back to our business transition roadmap. Today we are I’m honored to have Alicia Firestone with us, she and I have known each other for gosh, so many, many years. And I’ve always thought so highly of her with the work that she does with people, helping them in their financial world to make sure that they’re healthy and whole. So anyway, Alicia, welcome to our business transition roadmap podcast. And let’s start out with you just telling us a little bit about you, and maybe even your journey of how you got to where you are today.

Nelisha Firestone: Well, thanks for having me, Elizabeth. This is a real a real thrill. And I’m very excited to be live with you today. Yeah, I mean, I’ve been in the financial services industry now for 20 years this year. So it’s been a journey. Funny enough, I did not set out as a young person to be in finance. I actually graduated from Kansas State University with a communications degree. So I worked in television news, that was my previous career to this four, oh, gosh, probably, I don’t know, 1015 years before I sort of transitioned into finance. And the funny thing is, is when I think about my life today, I think about what I really love to college, econ 101 was one of my favorite courses. And it’s just kind of funny how it all came full circle. And you know, I ended up doing what I do for a living, it just kind of took me a little bit to get here.

Elizabeth Ledoux: That’s great. That’s great. I did not know that about you that you were in news. So that’s funny. Yeah. Pretty impressive.

Nelisha Firestone: So it was it was fun. 20s jobs or what I call it?

Elizabeth Ledoux: Yeah, I would think that that would be true, are just fabulous to do that. Yeah. So yeah. Anyway, let’s um, so in your, in your experience, you’ve got just lots of experience over the last 20 years with people and helping them to not only live great lives from a financial aspect, but also seeing them in a lot of different life events and things like that. And I’m sure that you’ve worked with many, many, many business owners, because that’s really one of your focuses, as I know, what have you seen that has really worked for people as you’ve gone through those years? What did they do that you go? Yeah, that was really smart.

Nelisha Firestone: Yeah, I mean, well, let me kind of explain why I’m passionate about working with business owners. My dad was a business owner. And his story is, you know, he started he went to college, got out, started working as a salesperson in the pharma industry, and, through his own journey, decided that working for himself was really where he wanted to go. So he left corporate America opened up his own business in the mid 80s. And really, it’s a rags to riches story. It was he built it from the ground up 20 years into it, he sold it for seven figures. And I learned about all the complexities and the needs of business owners through watching my dad, build his business and grow over the years and then eventually exit. So one of the reasons I’m passionate about working with business owners is I feel like they have so much complexity Due to their situation, and their highly underserved community,

Elizabeth Ledoux: yeah, yeah, they, they do. I think that people in general, but I think business owners themselves underestimate some of the complexity that they have in their, in their world, kind of believe that everybody has that kind of complexity, which is not true. So yeah, I can see where it’s underserved for sure. Yeah. And that’s

Nelisha Firestone: why they’re, they’re an expert in what they do. But they’re not necessarily an expert in you can’t be an expert in everything, right. That’s why we all do different things for a living, you know, different strokes for different folks. So yeah, I love to work with business owners at all stages, you know, just to kind of be that partner on their journey to help them make smart choices with their money. Yeah,

Elizabeth Ledoux: yeah. So one of the things and one of the reasons why I asked you to come on on to this podcast with me, is because when I’ve been out there in the world, and working with these business owners, they are very focused on their business, they’re very focused in reinvesting in their business. And that’s, you know, literally how the businesses grow. And I can’t tell you how many times I’ve found business owners who take for whatever tax purposes, reinvestment purposes, etc, they take really very little money personally out of their companies to live on, it’s not, you know, not the norm for them to do that, to take a lot out, so they usually don’t have a lot of diversification. And most of their money’s tied up in this beautiful and also relatively illiquid company. So yeah, when you have seen owners walk through this, how do you help them to understand what it means to be able to do both build and diversify?

Nelisha Firestone: Good question. And you’re and you’re spot on. I mean, you hit the nail on the head there. And my dad was a perfect example of that, you know, he, he always talked about building his equity, which is great. But to your point, you have to diversify at some point, especially after you get past the survival mode, right? When you go from survive to thrive, and you’ve got a profitable, profitable business, it makes sense to start diversifying your wealth. You know, one thing I noticed with a lot of business owners is they’re so laser focused on taxes, you know, and you can understand why, right. But to your point, the problem is, is is there’s such tunnel vision there, I think, and what a lot of business owners don’t understand is, you’ve got to kind of step back and look at the bigger picture. Because, you know, one example of that is, yeah, if you’re so focused on taxes, and you’re not paying yourself a fair salary, you know, as let’s say, you’re an escort. And the tax rule, the IRS rule is you should pay yourself a fair salary, you know, w two for what you do for a living, what you can put into a retirement plan is tied to what you pay yourself through w two. So if you’re all focused on just saving taxes, and you’re paying yourself very little through the company, that’s going to have a ripple effect into other things that you’re able to do in ways of diversifying your wealth for later. And depending on what industry you’re in, you know, that’s putting all your eggs in one basket is never a good idea, right? I mean, look at Blockbuster look at I mean, life changes and industries become obsolete. And my goodness, I would hate to see a business owner with all the blood, sweat and tears over the years, you know, throw other eggs in that one basket, and then something changes, and all of a sudden, the value is not there anymore.

Elizabeth Ledoux: Right? Right. Yeah, I can in that’s an external, you know, when I think about just strategic planning, that’s an external thing that happens, it’s not internal, that you can control. And those things do happen. Even with the best of intent and the best decision making, those things do happen. So one of the, you know, I’m Tiger 21 chair and have been doing that for no, gosh, almost five years. And one of the things that I’ve also found is that when in Tiger 21 is a peer learning organization, by the way, for those of you you can, you can look it up if you’d like it’s a great organization. One of the things that I’ve found is that owners are very good at investing into their own company, they know what to do there. So if you’re in real estate, you know real estate if you’re in you know, technology, you know, technology. So you keep investing there why because you know it and in order to diversify, you have to learn another industry or learn to trust somebody else who knows that or knows how to do the investments. And getting that trust is tough or getting In that time to do that. So how do how do people learn to trust other people to invest for them? And actually get that diversification going?

Nelisha Firestone: Well, again, I’ll go back to my dad’s story, I think one of the biggest mistakes he made as a business owner, and he’s a very smart man, I don’t think he he failed in that very area. I don’t think that number one, he realized that he needed to surround himself with sort of a team, if you will, a team of other professionals. And when I talk about a team, I’m talking about, you know, estate planning attorney, CPA and financial advisor, right. I mean, you know, your business, you don’t know our business. So I think it’s important for business owners, once they get past that, once they get past the survive into the Thrive, situation for their business, it’s important to start building that team early, right. Because once you have been in business for 1520 25 years, 30 years, and you’re ready to unwind that equity, then you’ve already built that trust, you know, so I think it’s important to vet those professionals early on, develop those relationships, so that when it counts, you’ve got the team in place that you rely on and trust. Trust takes time, you know,

Elizabeth Ledoux: it does take time, and it’s, you know, it’s about the relationships that we build, and and how you do that. And I think the first step in that, though, also is having the understanding and the vision to say I need money outside of my company, in order to transition well. And yeah,

Nelisha Firestone: I think I think one of the biggest things that business owners can do is, you know, kind of like a Colorado Real Estate, let’s just use that as an example. I mean, you go out, you look on, people have a really good idea of what they want to sell their house for. But maybe that’s not what the market will pay. Right. And so I feel like business owners are the same. They’ve Blood Sweat, you know, they’ve put all of their all of their energy and efforts into building this, this thing that it’s their baby, right? They’ve taken it from cradle to grave, essentially. And there’s a lot of emotion tied up into that. And so you think you have a number in mind, but is that what the market will pay for your business? And what is the need? So one of the biggest things that businesses can do to prepare to sell is do a gap analysis, which means go through the financial planning process, aggregate all of your personal assets into a cash flow plan, current income, future income against taxes, inflation, and back into that number, right. So just because you have an idea, in your mind, is that going to be enough to carry you through retirement to provide the income that you need through retirement? And, you know, I think the gap analysis plan is very powerful. It answers a lot of questions for business owners, but very few of them do it, to be quite honest with you.

Elizabeth Ledoux: Yeah. And what do you think is the reason why they don’t do it?

Nelisha Firestone: Because I don’t, if no one’s ever been through the planning process, they don’t know what they don’t know, right? So it’s a very, it’s a very powerful exercise to go through. But if you’ve never been through it, you don’t know what you’re gonna get on the other side, and not all financial professionals provide this service. So it’s kind of a unique service in our realm. And so just because you have a financial professional, maybe you’ve been working with them for a long time on the investment management side, it doesn’t mean that they have the skill set to provide this type of planning.

Elizabeth Ledoux: Right, because this type, the type of planning, I think, that you’re talking about, has to do with looking at the business as well. So it’s not just a you know, investing money and that kind of thing, but it’s actually looking at the business looking about looking at how they want to live their lives with maybe even without the business right businesses gone. And then how does that look and you know, one of the things that it’s I think that it’s sort of like going and you know, doing a full a full analysis like a full health analysis or something like that. It’s a little frightening to go in and you know, have your all your assets looked at and all of your all of your hard work looked at and you don’t know if you’re gonna find out wow, I’m in good shape here, right? Or you don’t know I’m thinking of a medical you know, you don’t know if you go in and it’s like, yeah, you’re on top of it. You’re in good shape working out, everything’s great. Or you go in and you go Yeah, you know, lose 20 pounds, change everything in your life.

Nelisha Firestone: When you’re factor there for sure. It’s like getting on the scale, like, oh my gosh, do I really want to know, you know, I mean, if you’re five years out, and you’re set on that date, and then you go through this process, and you realize, oh, I really can’t do this, then yeah, I, I would imagine Fear Factor holds a lot of people back too. But, you know, at the end of the day, you got to rip the band aid off, right? I mean, it’s knowledge is power. And eventually, if you want to get to the finish line, you got to benchmark where you’re at today. And that’s the best way to do it.

Elizabeth Ledoux: That’s exactly right. And I have a belief in that too, because knowing then you can make the changes. And I always say that, you know, people say, well, when should I start planning, or start thinking about transitioning, and there’s so many pieces to it. And it is so complicated, that knowing where you are today, every decision that you’re making today, helps you with your transition. The other thing that that we’ve seen is when a business owner has some diverse assets, so when when they don’t have 80 90% of their investment money in their companies, they actually the transition strategies, they have more of them available to themselves. They’re easier to go through, and they just have, it’s just an easier situation, because they’re not as financially dependent on the business. Because there’s a, there’s a dual dependency that happens, where the business is financially dependent on the owner, because there it’s dependent on the owners investment money being in that business. So absolutely, the business is dependent on the owner, if the owner can relieve some of his or her dependency on the business so that they’re not personally as dependent on the income. It makes the transition options, much more vast, they have a lot more options to deal with.

Nelisha Firestone: Yeah, and having you’re absolutely right. I mean, having options is is always fabulous, right? We all want to have as many options as possible. So yeah, building that team early, building that trust over time, so that when you do really get ready to exit, you trust the people that you’ve got on the bus, you can rely on their advice. And hopefully, if you’ve built that team early, to your point, those professionals have helped them set up the a proper estate planning helped them diversify outside the business so that when you get to that stage, yeah, you want to have as many choices as possible to diversify your income in retirement, diversify your tax structure, all of those things.

Elizabeth Ledoux: Yeah, yeah. So what are what are the big things that you see are either missing or confusing? Let’s go outside of the financial world, right? We spend a lot of time in there. You’ve got a lot of experience with business owners. What have you seen that they’ve done that is either missing or confusing that if they could have seen it ahead of time, it would have helped them?

Nelisha Firestone: I think the biggest thing business owners need to think about before they sell their business is what’s the plan on the other side, you know, like to be mentally prepared for, you know, retirement, or whatever you want to call that. You know, my dad, for instance, going back to his story, he retired early, he sold his business at 55. But on the other side of that, I think he realized he’s not the type of personality that could just sit around. And so if he was being super honest, I think he would say that he would have kept the business probably for another five to 10 years. So I think it’s really important that people start to think about, okay, what type of person a person am I? What’s my plan on the other side of selling my business, you know, if you’ve been a business owner, and you’ve built this thing, that’s where all your time and energy and focus has been, you know, where what you’re playing on the other side. And I think that’s important to develop to make sure that you don’t just sell it sail off into the sunset, and then you know, you’re depressed.

Elizabeth Ledoux: That’s right. That’s right. Yeah. So that happens pretty often where people sell or transition, and then they don’t know what to do. And then it’s difficult because they, you know, they have this belief of that they want us to take care of payroll, and they want to have the risk and they want to have all of the stuff, right, that pressure will be released. And then they sometimes forget, because the transition has many puzzle pieces that go with it. They forget that they are going to potentially lose their reason for getting out of bed every day. That their relationship with their spouse is potentially going to change and shift pretty significantly because they’re around more. I’ve even Yeah, had a belief in her this often. It’s like hey, I am finally going to get all this time with my kids. It’s going to be awesome. We’re going to be able to be together and go do things together. And then they find out that the kids are like, so why are you here? And we’re like, I don’t know what to do with you. And by the way, I have a life.

Nelisha Firestone: Yeah, sorry. This was not part of my plan, Dad.

Elizabeth Ledoux: You didn’t You didn’t prep me for this one. And I do have friends. So yeah, so there’s so many other pieces that I think owners don’t take into consideration that play a big role in their happiness. And they get this vision of what it’s going to be like that isn’t sometimes vetted with others.

Nelisha Firestone: Yeah, and there’s no, you know, there’s no one right answer, because we’re all different. Right. And so I think there has to be some self reflection and some hard questions asked, you know, sometimes we get into those discussions in my office, especially for been working with somebody for a long time. And it’s interesting what you hear, you know, I mean, there is no cookie cutter answer. They’re all different.

Elizabeth Ledoux: That’s right. That’s right. Yeah. And yeah, I love that Leisha, up to this time, we’ve talked mostly about your experience with your clients. And I know that in your industry, and in your experience, you’ve also had experience being a successor in a way coming in to your firm. You’ve also had the opportunity to see others leave and for you to make some transition also, along the way, so can you tell us just from your own experience, what was that, like?

Nelisha Firestone: me transitioning over the last 20 years and two different partnerships and things? Yes, well, I have to say, I’ve been really blessed in my career, to have met and been mentored by so many great people. You know, when I joined this industry in 2004, there weren’t a lot of women, you know, women were not really prevalent in the financial services industry. You know, it was kind of coined as the old boys club, you know, good old, good old boys club. That’s changed a lot. So I’ve been happy to see that sort of shift over the last 20 years. In fact, kind of a funny story. I had a potentially new client in not too long ago, and I was kind of going over introducing her to our team. And we are currently an all female team. Not purposely, but that’s just how it kind of happened. And she asked me, she’s like, so do you guys have a plan to hire a man? And I thought that was so funny. It struck me as funny because, you know, 10/20 years ago, it would have been known Do you guys have any plans to hire a woman?

Elizabeth Ledoux: Yeah, exactly. Exactly. 

Nelisha Firestone: So I thought that was I thought that was really cool. But yeah, we it’s not that we, you know, don’t love the boys I’m happily married for it’ll be 16 years this year. It’s just kind of the way. Thank you. But a lot of my mentors in this industry over the years have been men. And yeah, I mean, I have had a lot of different iterations of myself over the last 20 years. For the most part, I’ve had great experiences, and you know, some not so great experiences. And I guess the one thing I was trying to think about this, like, what can I share, from my personal experience that would help your audience and I think if you’re considering, you know, going into partnership with somebody, partnerships are hard, you know, because everybody’s coming to the table with baggage, if you will, you know, meaning you know, how they operate, you know, how they move in the world, that kind of thing. So, when you’re setting a partner, everybody’s on their best behavior, it’s kind of like dating, you know, so they’re going to show you their best side, I think the most important thing when you’re considering making a change with your business is number one, you know, obviously, don’t take it lightly. But try to find out what they’re not telling you. You know, and fortunately, so many of us live our lives online anymore. So there’s a lot you can find out by checking out somebody’s Insta profile, Twitter, Facebook, LinkedIn, you know, where do they how do they move in the world? What do they put out there for others to digest? You know, is it all self promotion? Or is it valuable? Kind of look under the hood a little bit more? How do they communicate where do they spend their energy? does it align with your own value system? So I guess the one thing I would say is partnering is great, but you really have to know what you’re getting in bed with right and and so, you know, do your homework, look under the hood a little bit more. See if there’s see what they’re not telling You I think that speaks louder than what they do tell you.

Elizabeth Ledoux: Yeah. And that’s great advice. I love that. And it’s great advice, not only for the person who’s transitioning out, but it’s also great advice for the successor coming in. Because, you know, a lot of times the person transitioning, they’re the ones that you’re focusing on, of course, right. And they’re focusing on themselves. But what’s, who’s this successor going to be partners with because in, in our world, the inside transitions, not the third party, but the internal transitions. Those tend to be a great road, but they also tend to be sometimes a harder road. And the reason why they’re harder is because of the partner situation, right? You’re bringing somebody in, you’re mentoring, you’re teaching, you’re shifting your skill set, from being the builder, grower decision maker to being the mentor teacher, helping them to make great decisions, and teaching. And that. So the successor coming in, who were they getting in bed with? Right? And because that’s their next adventure is to take over the transition, or are you going to be able to go through that, that learning opportunity together?

Nelisha Firestone: Yeah. Yeah. I mean, it’s, it’s a lot, you know, and if you’ve built your business, and you’re getting ready to hand it over to somebody else, I mean, obviously, we all want to have, you know, an easy transition, and make sure we’re handing off our clients to someone that’s going to be a good steward of what you’ve built. Right. So yeah, I just think that there’s a lot you can find out about people outside of just the dialogue that you have. And I think it’s important to make sure that you’re aligned on all fronts to make sure everything goes as smoothly as possible.

Elizabeth Ledoux: Absolutely. Yeah. And to have some really deep open communication, too. I think that that’s important to take the time not to say, oh, yeah, I’ve worked with this person for a long time. And so of course, they’re great. Because sometimes you don’t look at them from that aspect. They’re, you know, your boss or your employee. You’ve worked together, but this is a different relationship. And it’s a little bit deeper. It’s kind of like, yeah, yeah, like, we’re really getting married.

Nelisha Firestone: Partnerships are like me, I was just gonna say that partnerships are like a marriage, you know? And, yeah, you got to ask the hard questions. And, you know, the vetting process cannot be rushed, you know, and you really need to take time with it and ask the hard questions. And like I said, you know, look under the hood, if they had previous business partners, talk to them, you know, like, there’s so many. I hate to say it, but be like a pie. You know, that’s a good look on the hill, under the couch cushions, you know, you really had to gather as much information as possible to be able to make sure you’re making the right decision.

Elizabeth Ledoux: Well, and I think that that’s great, too, because to encourage whoever your other partner is your successor, to do the same about you, right to look under your hood. And and it’s kind of a two way street there where you’re really, you know, understanding each other at a deeper level before you say yes, yes. Yeah, absolutely.

Nelisha Firestone: And it is so much like a marriage. It’s just, you know, the dating is less fun. Yeah.

Elizabeth Ledoux: That is so true. So true. So, at the end of our session, I always ask the question, what one thing would you leave with our audience that you think would be most beneficial for them?

Nelisha Firestone: Yeah, it wasn’t, I think, I think we talked a lot about this in the podcast. But I think building that team early, so that you have that sort of circle of trust around you so that when you do get to the point where you’re going to transition out of your business, you’ve got the team in place that you know, and trust are going to help you make the right decisions with your money to set you up for success in retirement.

Elizabeth Ledoux: Awesome. Awesome. Well, gosh, yeah, Alicia, I just worry. We are at our time now. And I just want to thank you for just coming on and spending this time and being so open and transparent with your stories. You’re just such a terrific lady. And you know how much I appreciate you. So yeah, thank you.

Nelisha Firestone: I appreciate you inviting me. It’s been really fun. And you know, it’s good to see your face. All right.

Elizabeth Ledoux: Thank you for listening to this episode of the business. This transition roadmap. If you are listening to this and you find yourself wanting to go deeper into these topics and start the process of putting together your transition strategy, I’d love to offer you a free initial strategy session with my team, where we’ll help you to explore the future transition of your business. Head over to To schedule a call. Thank you again for listening, and I’ll see you on the next episode of the business transition roadmap.

The Business Transition Roadmap with Elizabeth Ledoux

How do communities thrive? When businesses experience healthy growth and transition. Join CEO of The Transition Strategists, Elizabeth Ledoux as she and her guests identify what makes a successful business transition roadmap. If you know you want to transition or exit your business “one day”, today is the right day to start planning. This show will give you the roadmap.

If you’ve enjoyed this podcast, you can check out other episodes here: Podcasts – The Transition Strategists
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