When it comes to entrepreneurship, we tend to think that there’s only one way to start: The founder comes up with an idea and launches.
But today you’re going to meet a woman who took a different approach.
Deborah Sweeney used to work for Intuit where she spotted an opportunity to buy one its brands. As a result, today she owns and runs MyCorporation, an online legal and business filing service, focusing on entrepreneurs and the small business community.
Deborah Sweeney, MyCorporation
Deborah Sweeney is the founder of MyCorporation, an online legal and business filing service focusing on entrepreneurs and the small business community.
Andrew: Hey there, freedom fighters. My name is Andrew Warner. I am the founder of Mixergy.com. Oh, oh, the ambitious upstart! And when it comes to entrepreneurship, we tend to think that there is one way to get started. The founder comes up with a great idea, launches, and business continues to grow, but today you are going to meet a woman who took a different approach.
Deborah Sweeney used to work for Intuit where she spotted an opportunity to buy one of Intuit’s brands. As a result, today she owns and runs MyCorporation, which is an online legal and business filing service focusing on entrepreneurs and the small business community.
What that means is if you are starting a company and you are not sure whether to get an LLC or a corporation, mycorporation.com will help you figure it out, then they will help you file your incorporation papers, then they will help you keep your corporation going. That is just a small part of what they do, but it will give you a good sense of it.
This interview is sponsored by Scott Edward Walker of Walker Corporate Law. He is the entrepreneur’s lawyer and I will tell you more about him later, but now I have got to say hello to Deborah. Deborah, thank you for doing this interview.
Deborah: Hi there, Mixergy.
Andrew: If this business was so good, why did Intuit want to let it go?
Deborah: It was 2009 when I ran a division, for a few years, under Intuit. Around 2009 there were a lot of changes, as you probably know, in the economy and smaller divisions at Intuit where having lack of stability, changing in structure and funding changes. Basically, we were in a situation where I thought what if they decide to divest our division? Do I want to just sit back and watch that happen as I had seen other divisions at Intuit get divested? Or can I offer to maybe purchase it myself?
I, sort of whimsically, joined the conversation with a couple of other leadership members. I said, “If you ever think of selling it, think of me first”. They actually didn’t come back to me and say, okay, we are thinking of you but they came back and said tell us more about your idea and then present to us the whole big picture.
I was generally general manager of the division so I had to look out for the best interest of the financials of the company. I said, “Well, there are other options. There are competitors. There’s closing the business down and then there is me maintaining the stability and you know me.” So, ultimately, it didn’t work quickly but nine months later the deal was done.
Andrew: Oh, wow. So within nine months you were able to do this. You just floated the idea. I was looking at your background to get a sense of whether you’re the kind of person who bought companies before or whether you are so entrepreneurial that this just seemed in your blood. But, you weren’t growing up….
Andrew: …. really, right?
Deborah: No. No. More…
Andrew: What was your passion?
Deborah: … my family. I was a lawyer before I went in house, so my passion was in intellectual property: trademarks; copyrights; business law and small businesses. I represented, as a lawyer, many small businesses that needed legal advice from an external standpoint, so I was outside counsel before I went in house for the company.
For my corporation, that I now own, it really was not in my blood. It was sort of a stretch for me but my husband actually is an entrepreneur so I had it in the family. I had, of course, his support but also… It was sort of like, I know how to run it. I am running it as a lawyer. I am very into it. I think I can probably do this on my own. And funnily enough Intuit asked me the same question. What do you think you can do better than we can do? I don’t know if they thought I was a little sassy when I answered them but it worked out.
Andrew: What was your sassy response to them?
Deborah: I basically said I won’t spend as much money as you spend. I’ll spend it on the right things. I’ll spend it… I won’t be having people travel to Europe to look at another business division. I’ll call them on Skype. I’ll make better financial decisions. Instead of, having me joke that our office is the Taj Mahal, we had barista serving us coffee. I will ask people to get their own coffee.
Andrew: You know what? I was laughing, in a weird laugh, because I know where this story is going and what you will be able to do. But I didn’t realize that you first of all said that to them directly, and second that you would have baristas at the office bringing coffee to people who worked at mycorporation.com.
Deborah: Well, there was a coffee service and so they served everybody in the whole Intuit division so you wanted coffee. You wanted everything it was made for you. There was much included, you could go workout during your breaks, you could go get free this and free that and all the travel that we did. It was expensive. A lot of it was attributed to our small division, in terms of allocated expenses across all business divisions. I said, if we didn’t have these allocations for these insane phone systems or whatever it was….
Deborah: … gold plated elevators. Instead, we moved into a 6,000 square foot office in Calabasas which is nice but it is still just regular. It’s an everyday office. It’s not crazy. We don’t have to have I badge to get in and out. We just open the door and we come in. So, all of those expenses were expenses that were attributed to our division that now we’re in a place where we can be more profitable.
Andrew: If you didn’t have… well, was MyCorporation profitable within Intuit with all those expenses? No, I see.
Andrew: Okay. So if you include the barista and the gold plated, literally gold plated elevators?
Deborah: Oh, I don’t know about that. They looked gold.
Andrew: Okay. And the rest, with that, it wasn’t profitable. When you had to negotiate a buyout, was it easy to negotiate with a major company like Intuit?
Deborah: Well, Intuit knew me for years and so it wasn’t hard core negotiation. I did have to hire, under their requirements, my own legal counsel to represent me in the deal because they didn’t want me representing myself both as an employee and then also as a potential owner- buyer.
So I did have outside counsel. But, often I joked that that ruined the deal because I had a good relationship with them and we all kind of wanted this to work, so it wasn’t hard core. But, there were times when we had crunch- up points or things that we, you know, disputed.
And a lot of times I was the one who gave because I thought, wait, I know this business pretty much better than the leadership at Intuit in many ways and I felt like I can make this successful. I just need a chance. And I didn’t want to over negotiate the deal to the point where I lost the deal altogether.
Andrew: What’s one area that you could’ve negotiated hard on but you said “Eh, I’ll just give it to them because we’re…”?
Deborah: Pre-existing liability as employees and customers. So, for example, most buyers would say I want every single piece of [???] and warranty saying there’s no liability, there’s no risks, there’s no issues. And I knew there were some, but not anything that would preclude me from owning the business or wanting to run the business.
So yeah, there’s probably an occasional customer who would come back and say you didn’t do something right or an occasional employee who said I would have to wait until you handle this or that. But I kind of felt that, as a lawyer, those are things I could probably respond to or hire the right counsel and get enough business insurance to protect myself.
I could imagine some other buyer would say, well you know, I’m out. I don’t want to risk this. I don’t know what the risks are, so forget it. And for me, I was able to say alright, I can handle that, I know it’s not that big of a risk, and I can deal with the consequences.
Andrew: You also negotiated with them… actually, how much did you pay for the company?
Deborah: It’s a non-disclosure. I’m not allowed to tell. They’re a publically traded company and I had to sign of course an NDA on that issue.
Andrew: But you didn’t have the money to pay up front. You asked them to pay over how long?
Deborah: So basically, over the course of the last few years, I had to hold lines of credit and all these things, and gradually pay off the deal. So once it was paid off it, it wasn’t over a certain period of time. It was over. Once it was done, it was done.
Andrew: Oh, I see. They just said, hey, Deborah, take some time, pay us for this company over time, but you don’t have a ticking clock.
Deborah: As a percentage of profits, right. So, it depends upon how we were doing.
Andrew: Whoa. That’s an interesting idea that I hadn’t thought of. So, a percentage of profits goes to them until you hit whatever amount you owe them.
Andrew: Gotcha. And then you also said that you had to take out a line of credit. Is that because you had to borrow money in order to pay them?
Deborah: Well basically. Partially, but I also needed, under our deal, to protect myself in the event that say, one month we weren’t successful, they wanted to make sure I had a certain amount to protect my employees and also protect them. I pretty much took all of the employees that were with us at Intuit, out. And Intuit is incredible.
They really focused on the consumer, the employees, and the shareholders. And so not just as part of Intuit, but then also after the fact and I think that was important to them that something didn’t go wrong, or that I spent money in the wrong place and that all of their, just all the customers, all the former employees were now in a really bad decision.
Andrew: I see. So they said maintain a certain amount in the bank at all times so that we know you can cover it.
Deborah: You got it.
Andrew: I see. All right. You also had to pay a little bit up front, right?
Deborah: That’s a non-disclosure thing.
Andrew: Oh I see.
Deborah: I don’t have to be secretive, but yeah I don’t want to get in trouble either down the road.
Andrew: Okay, but what I’m getting at is that you still needed to take out a home equity line of credit, right?
Andrew: You still needed to put up your own savings. What was it like to take a risk like this when…?
Deborah: First, yeah, I didn’t know that I was. I thought for sure you go in and you say you need a line of credit and maybe here is part of my naivete, not being a former entrepreneur, I thought you just go to the bank and you say look I have this home, I need a line of credit here’s what I need to do and they say okay, here you go. I had no idea, because the day the bank came out and gave us the …
My husband and I were sitting there and they said okay here’s your line of credit. And we were applauding and I couldn’t… everyone was going on. And basically, they were saying that they had not given a line of credit to basically anyone in years. Because again, we’re talking about 2009. And in hindsight I think, what was I just going in there thinking, of course, I’m going to get all this money, and I’m just going to ask, and it’s going to be no problem,” but it evidently was a big deal.
And we had to go through all sorts of hoops without me realizing that this wasn’t just standard stuff. And so yea, it was crazy, and when everybody pointed out how crazy it was and made me think it was even more of a big deal, but it’s something I look back on and say, when people ask me about–
They’re coming out of law school, for example, wanting to become lawyers, and starting their own law firm, or starting their own businesses, I get asked a lot, and I always say that having a really good credit history is critically important to entrepreneurship in many ways.
People don’t think about it, and they think, “Well, when I need the money, I’ll get it,” and really it really serves me well to have a history of paying debt and paying off my student loans, and doing all of those things that people just sort of flippantly do or don’t do, and it served me very well, and my husband having strong credit scores that the bank was willing to take a risk in us.
Andrew: You know it’s interesting that you said that. After I sold my previous company, I decided I don’t need any credit ever again, and I had, before that, I had $75,000 roughly in credit card and other related debt, and I said, “No more.” So I went for years without it, and then I said “I might want to borrow some money at some point, I should get a credit card to make sure that I could,” and I got rejected for the credit card. It was unreal, for, like, a couple thousand bucks.
Andrew: And so, it’s because I didn’t have credit history for years.
Deborah: Right. Well, it’s so funny because people don’t think about it, until it comes to be the issue. And even just silly little things like not paying an occasional thing on time, people don’t think it’s a big deal, but then they realize that–
Deborah: –actively doing that, and being attentive shows character in many ways. And a lot of times, as you know, for entrepreneurs, banks and investors are looking at whether or not you have character, and the wherewithal to get it done, and whether you’re trustworthy. Are they going to invest in you, and you disappear with their money?
And there’s so many things that you don’t think about in anticipation, that you actually have to do years in advance before it actually becomes something that is important to you. And so I look back when people ask “What was it that you did?” And I say “You know, I had good credit, and, what do you know, it served me really, really well, and continues to this day for anything I need from the bank, or other things, it’s still a relationship. I get better deals because I have really strong credit. People want to work with people and companies that do right by making their payments.
Andrew: The odd thing is that in some ways college actually undoes that because, college campuses allow credit cards to solicit new customers there, because they encourage you to take on debt for paying for school, and many entrepreneurs, when they leave then don’t have good credit. And so they have a hard time doing what you did, which is getting a loan from the bank.
Andrew: So you got the loan. You saw some easy wins. Like location, you don’t have to pay for high end space, you can pay for smaller space. You don’t have to pay for a barista, people can get their own coffee. What are some other wins that you as an independent entrepreneur could put up on the board that a bigger company wasn’t able to accomplish?
Deborah: My one big focus from a marketing standpoint was on return on investment. Under Intuit, the goal was to grow, and a lot of divisions within Intuit, the goal is to grow. And that’s all that matters.
Andrew: Growth over profitability.
Deborah: Absolutely. And not with all divisions, but with smaller divisions they can afford to be a little bit more like “Hey, we just want to grow, and we’ll figure out profitability later, we’ll optimize.” And so [??] that was critically important. So much of what even our primary competitor spends a ton of marketing on radio and television ads, but it’s not necessarily profitable spend.
And so I was trying to focus on search engine marketing, SEO, developing networks from a social media standpoint, creating incredible content, recurring revenue, focused on those things where the RRI was the highest.
Andrew: I do see SEO very quickly become a part of the site. So before you acquired them, a lot of text on the site was about– Well there was some Intuit, a Quickbooks logo on the site, of course that helps out. Soon afterwards, I suddenly see, on the very bottom of the site, business structures, N Corporation with a hyperlink, C Corporation with a hyperlink, S Corporation with a hyperlink.
You’re really starting to think about the structure of the site. You’re really starting to think about the way you’re linking and identifying the pages on the site. Where did you learn to do that?
Deborah: So a lot of it was about just things I knew before running the business, or Intuit had what was called Centers of Excellence, so there were truly, truly excellent people who knew what needed to be done, and who knew how to advise you on it. But there was a big gap between information and execution at Intuit. And it’s because there were so many big ships going at Intuit’s– Flying around Intuit and dealing with all of the issues that had to be dealt with, but ours was so small. And the whole [??] doesn’t get very much attention.
And so, once I have my team and all of them were saying, they were looking at me and saying: “What should we do next?” and I said: “Okay, you need to do this, you need to do that”, and then you get some experts on your team, we got an outside advisor, for SEO, for a short period of time, to give us recommendations. And then, virtually, execution, execution, execution.
Andrew: So after you bought it, you still brought in an SEO expert, you hired a consultant, who advise you, I see, but the reason you knew to do that and you had a sense of what would work is because, internally ad into it, you’ve got advice in what to do, there just wasn’t enough time to implement any warranty resources allocated to my corporation at the time.
Deborah: You got it, you got it.
Andrew: I see, wow! Okay. The other thing that I notice is, so first of all, before I Intuit bought my corporation, I saw a site with the text animation scroll on the screen, that looks very early 2000.
Andrew: Then Intuit comes in, buys it out and I see the reassuring logo, Quickbooks into it and very little, nicer design, but very little added to the site.
Andrew: You come in and almost like that, the site starts to look very professional. The site starts to speak directly to a community of people. We’re used to say MyCorporation, Quickbooks Company or something like that and somebody says MyCorporation entrepreneur is welcome.
So this was part of your plan. Can you help me understand what was going on on the inside, to help me see how you ended up with this?
Deborah: I love that you’re saying all this. I rarely have people ask these awesome questions! Yeah, I saw it: “Who are we talking to?” We are talking entrepreneurs and on our site it looks like it’s corporate and very [??] almost, with very little information, with very little education and so much of entrepreneurs that we knew after tons of research, previews, that the time for a consumer, looking at our site, to converting on our site, [??] 6 days, so it’s not the same day almost ever, to six month.
So they were really looking for content and education and information that ultimately would have the advantage to trust and when they converted, to convert with us. And it was also part of my idea that the long-term value of the costumer was what was going to differentiate us from a lot of our competitors and Vigo [??] was one of our primary competitors.
Their focus is very transactional – lots and lots and lots of costumers in and out the door, in and out the door, more, more, more, and ours is about a whole lifestyle of the costumer business: how teach them and them get them in our fold and then keep them throughout the [??] cycles. So registered agent services and new reports, all of the document storage, all of the annual business [??] that needs to be done, and one [??] corporation grows, than they need to qualify for in foreign states: foreign qualifications and business sites.
The list goes on and so, my prospective was, we need to educate and we need to help them understand that we are not just about one transaction in and out. We’re about [??] in a relationship and that’s where all that …[??]…
Andrew: I see that.
Deborah: Entrepreneur is welcome kind of [??]
Andrew: I see that and then there was a section called “The Learning Section”? “Learning Center?” What I don’t see those, how did you maintain them? I could understand someone finding your site because you are so well structured. I think even to this day you’re really good organic traffic. I can understand that.
I can understand them wanting to take some time to figure things out, but how did you have them remember that the place that would help them figure things out, after they searched for it on Google, was mycorporation.com and they should come back to MyCorporation?
Deborah: We worked really hard on the basic things, like getting them sign up for our newsletter and then call them or paging with them from the customer service circle. We don’t wait for them to call us, we call them back, we engage them in a full [??] type of way. But also, there is retargeting. Retargeting on the internet is so critically important.
If they come to our site once we make a really best effort, because we know if they’re been there once, they probably find us to be informative and helpful, not too overly pushy and ultimately to be an incredible resource for an entrepreneur, so we retarget to them, we joke about, it, we follow them around the web, which, I mean, it happens to everybody, but it’s been really beneficial to us, in terms of maintaining the long-term engagement.
Andrew: I see.
Deborah: So just because I don’t see a clear way of staying connected to the customer, I do see an email newsletter at the top. It doesn’t mean though, that we are not connecting with them again later on and retargeting this way for that.
And if someone even comes to our site and enters their name or email address, we are able to reconnect with them, the assistant that we have internally, to follow up and say: “Hey, we noticed you came, you entered your name”, and we were able to link that to them and send them an email and …[??]…
Andrew: What is the system you use for that?
Deborah: It’s an outside provider called V-Tech, and basically they link all the pieces together for us, and then send us the data. And you do a miniature revenue share with them, but it’s very, very successful.
Andrew: With V-Tech?
Andrew: Okay. So they give you the software, you pay them as a revenue share.
Deborah: It’s kind of like an affiliate relationship.
Andrew: It seems like that.
Andrew: Wow. So I said earlier that you still get great organic traffic, the keyword corporate seal, for example, sends traffic to you. Of course you’ve got your own name, MyCorporation, but, as I was looking at that, one of the things that stuck out was you don’t just get traffic from Google, you get traffic from Duck Duck Go. What are you doing that makes Duck Duck Go effective?
Deborah: We have good affiliate relationships, we’ve always, prior to even becoming a part of Intuit, and then during Intuit’s reign. We work with Commission Junction, and other affiliate providers to kind of generate– If you have a site that talks to entrepreneurs, or business owners, then we can work with you to issue commission checks back to you for referring customers to us.
We also have a very sound partnership base. Intuit’s a partner, Vistaprint, GoDaddy. And so, those are people who talk to entrepreneurs and small business owners, and then they’re also engaging them back with us, as we are engaging customers to their products.
Andrew: I see. And so, where we might just create an affiliate program, and put it up on our site, and hope some small mom and pop sites, or frankly it’s not mom and pop, it’s some teenager often, who will send traffic over and get a commission, you’re thinking about the bigger partners, the Intuit’s of the world, I see. Vista print. Okay.
Let me do a quick plug here for my sponsor, and, actually, I should ask you this question. So my sponsor is Scott Edward Walker, of Walker Corporate Law. He is the entrepreneur’s lawyer. And I’ll ask you, in a world where someone could come to my corporation, and incorporate on their own, what is the advantage of having a lawyer?
Deborah: Lawyers are very beneficial in helping entrepreneurs determine entity type, or make decisions on by sale agreements, operating agreements, anything related to the ongoing maintenance or sale or purchase of the business, even [??] I’m an attorney so I recommend talk to a lawyer, talk to your accountant.
Often when you have all these inputs, you’re able to, in a better informed way, make decisions about your ongoing business structure, and how you manage it. But, with that said, a lot of lawyers and CPAs use this on the back end, so they say “Yes you should incorporate, I can do it for you,” and then they leverage a service like ours, because we have great relationships with Secretaries of State in all 50 states, and we would welcome providers.
So a lawyer in California may not be able to do a Texas filing, or even a lawyer in California doesn’t want to wait in the queue at the County of Norwalk, to deal with the filing, so we do the legwork for them, and it ends up being a pretty cost effective service.
So a lot of people say “Oh, do lawyers despise your service?” And I think for the most part, they like us because we are able to make them look good. We get the documents filed, we send them back to them, and they’re able to provide them to their clients.
Andrew: And then there are some agreements, like the buy/sell agreement, like the partnership agreement, or well I guess they wouldn’t be partnership agreements, but how do you break up a company between two partners? What happens if one of them leaves? All those kinds of agreements.
How do you raise money? How do you sell your company? All those kinds of agreements. You need a lawyer in order to think them through, and to structure them, and at that point you can either get an average lawyer online, maybe you go to Yelp and you find some local lawyer.
Maybe you find a cut rate lawyer, or if you’re an entrepreneur listening to me, and you want a lawyer who actually understands the startup community, who maybe is a Mixer– not maybe, who definitely is a Mixergy fan, so he understands the kinds of things that you’re going to be going through down the line, if you want to get started with a lawyer like that, I recommend you check out walkercorporatelaw.com. And if you have any questions contact Scott, just email Scott directly. email@example.com.
The partnerships with lawyers, it’s interesting, because I can see for you, Deborah, that a lawyer would refer people to you, and so you would want that agreement, or that relationship, but finding all those lawyers is really tough. I’ve had designers in my audience say they wanted to work with lawyers, and I see how hard it is for them to get one lawyer at a time to do their website, one lawyer. How do you get them?
Deborah: We do a lot of outreach at conventions. I lot of lawyers have to go for their continuing education credits. We also do trade shows. And then, honestly we build relationships almost one by one with lawyers, and it does take effort. Even CPS Financial Advisers, a lot of them we correspond– Our sales team sends out ten emails a day to who we perceive to be financial advisers, or CPAs that might be engaged in our service, so that we now can incorporate businesses.
And so, you just sort of talk to them and talk to them. You can imagine, the network grows quickly. And eventually they’re telling their friends, ‘Oh I used My Corporation. They were great. They’re better than just a document filer. They’re actually a service. You can talk to people there.’ And so it’s just a lot of word of mouth too. And once you do well with a certain industry it sort of flourishes in the regard.
Andrew: So you told us about how many extra expenses there were because MyCorporation was part of an Intuit. I imagine then it would be like a snap. We’re separated so we get cheaper office space. Everything is cheap and easy to do. And then I took a look at April Dykeman’s notes from your pre-interview with her.
And she asked you what was the biggest challenge as an entrepreneur as a CEO of this company. And one of the big challenges you told her was right sizing the expenses. So what was so hard about cutting expenses?
Deborah: You don’t know. I didn’t know at the time, of all the pieces, what was working and what was not.
Deborah: And so I took piece by piece by piece. Is it radio? Is it my sales team? Is it my commission structure? Is it my tech team? There’s so many pieces. It took a long time because sometimes I made wrong decisions like, “It’s definitely that I have to cut back my FCM [SP]”‘ And then we had no traffic. [Laughs] So I think well that’s a problem. So redo that.
Or I cut back, for example, one of my sales team members who didn’t love working in a small entrepreneur environment, was better fit for a large cooperate environment. We agreed that it didn’t make sense. And then it took a hit on our revenue. So really focusing on who are the right people, what are the right strategies, I think that was a big stress point for me because it took a long time to go through each of these avenues and strategically make decisions.
And as you know, with an entrepreneur, you have so many other things going on that it’s hard to just focus on that item that you’re trying to evaluate. So I think that was it, a huge opportunity . . . [laughs]
Andrew: I see so you can’t just go in and say, ‘We’re going to get rid of everything that looks like it’s excessive,’ because there are many things that aren’t as obvious. And there are some that seem to be excesses that obviously are not, in retrospect.
Deborah: Exactly. Exactly.
Andrew: What about employees? Is it easy to go into a culture that followed you out of Intuit and say, “Some of you just aren’t going to work out here and we’re going to have to let some of you go?” Or does that create a big problem with the people who even stay?
Deborah: Most of the people who are her have been almost lifers, so the majority of the people knew what they were getting into and have almost been a part of the company before we were acquired by Intuit. But you’re 100% right. There are definitely people who were not a fit.
For example, developers, in a corporate environment they have their H1BVs [SP] that compensated. And they’re traveling a month overseas to be with their family. And all these are variables that are expected in a corporate environment and especially one like Intuit that really has incredible benefits. But for a small business owner like myself, that just wasn’t practical, having three employees disappear for a month each was horrible.
And then the expectations of salary increases, benefits and those types of things. The one good thing is we were able to keep as much the same as possible, but there definitively people and rules that were not ultimately necessary. A good example is we had a lawyer who was our in-house decision maker and document management person. I could do that myself. So I’m thinking, ‘Wait I’m paying someone X amount of dollars.
This is something that probably would take an hour a day of my time.’ Those were decisions that entrepreneurs make. I could probably just do it and save all this money and put us in a better financial position. But I also didn’t want to just lay people off willy-nilly . . .
Deborah: . . . so it’s about a dialogue, maybe about a good severance package, about all of these things which I know they’re costing us, but in the long run, saving us money.
Andrew: What about the attitude, someone who went to work for Intuit, went to work there for a reason, went because there’s a certain personality that they have. Now you’re taking them into an entrepreneurial environment which takes a different kind of personality. How did that work out?
Deborah: It’s taken five years.
Andrew: Five years?
Deborah: [laughs] I’m still doing it. Everyday I’m trying to say, “Look it, this is the big picture. Here’s where we’re headed.” We print on board saying, “Here’s our goal for the month. We’re all in this together,” sales matters, customer service matters and technology matters. It is literally every single day, something I think about that’s entrepreneurial whereas when we were into it, we had this monthly meeting.
Basically they said, “Here’s our numbers and here’s how we did.” And everyone said, “Great” or “Oh gosh.” And they we just moved on. There wasn’t buy-in so it has been literally part of my everyday thinking, “How do I engage my team? How do I get them realizing that the more we are successful, the more we are all successful?” And also it takes the person that [??] when we see success, I issue better return to them or commission or party or an event. Half the time, honestly, they’d love to go out for a lunch I order and that does it for them. But it’s figuring out what those dynamics are that take a long time.
Andrew: I see. And so you’re constantly communicating where the growth is, how well the company is doing and then celebrating, even with a lunch. Even if its, I see.
Deborah: Starbucks, anything.
Andrew: Is there ever a sense that, well if we really do especially well than Deborah is going to make out and we can only benefit so much but she has unlimited upside?
Deborah: I don’t think they say, or they’ve never said it to me.
Deborah: I don’t think they think that about me. It’s possible, but I am really open in my communication. Here’s our revenue, here’s our expenses, here’s where things are going. We just had a meeting right before this call and I was telling my processing team, those are the people who literally produce the documents, we don’t perceive the members as specific, they’re not as a type of [??] they’re very attentive [??] but they’re just sort of processing documents all day long.
And so I was trying to say here’s the big picture, here’s where we’re headed. So it’s always about engagement and I think I want them to know, yes, we’ve grown another 15% month over month and year over year 20%, but our expenses growing this way and here’s how we’re going to play out at the end of the month.
Here’s how we’re going to play out at the end of the year if things keep going. So I think through communication I believe, with my family, with my kids, with my team here on the floor, I say, if we’re communicating and we’re honest with each other, I think they trust me and I don’t think they think I’m, you know, going crazy and having this incredible life and the rest of them are just working day to day for, you know, minimum wage.
Andrew: I used to be able to do that with certain people at my company but not with developers and I almost wanted to have like a number on the developer’s desk to say because of what you coded here’s how much revenue you’re bringing in but I couldn’t come up with a way to do it. How do you show someone who’s not directly related to the revenue how her contribution is impacting the overall revenue?
Deborah: Sure, it is a challenge every day and fortunately my development team is really hyper engaged from an entrepreneurial standpoint. They, I would venture to say, although they’re paid very well, that they love what they do just because. We have meetings and I go through things and they’re more excited about it than I am and about the revenue growth than I am.
And they don’t really need to see anything to know about it so if there are [??] people who get the intellectual component of being an entrepreneur and the upside potential and they say things like I’m in it for the long haul or I love this entrepreneurial environment and they also see the other perspective. They worked 16 hours a day at [??] and here they work nine. [??] you get the life balance component of it.
Andrew: Oh you can reduce the number of hours they work?
Deborah: Yes, because I personally think it’s diminishing returns at some point. Believe me, I believe in hard work and coming from a law firm environment and you know everybody worked crazy hours but I think there’s something to be said about us being understanding of each other’s balance and we all started working, the majority of us started in our late 30s. And when we all started working together we were all in our 20s and we’ve all gone through, people are getting married and having children and really feeling like gosh, I need to come in late today because my kid has something.
And that’s more of a priority to me than making more money and if it takes an extra three weeks to do a release for something, I think I’ve learned that that’s okay. It’s an extra three weeks, we’re doing very well, let’s just keep plugging along. We know these releases will happen, and so I’ve structured it in a way I think everyone can always say that the work-life balance is so critically important to our success that it’s just become a hallmark of who we are.
Andrew: I found that in a smaller company you become really insanely dependent on certain people because the whole company goes down if they happen not to be there. What did you do to deal with a situation like that to avoid having too much on one person’s shoulders?
Deborah: So I panicked today, it’s funny you ask this question, because my operations manager who when our [??] pretty much running every single thing day to day and I was so overwhelmed with the employees and time off and sick days and vacation and where they were going and what happened to their [??].
I was about to lose it and so she came in and literally took over that whole piece and she’s pregnant and will be leaving on maternity leave in two weeks and I’m flipping out so I’ve been working hard and it’s become a really big thing for our team to write our final a year ago to make sure we were multi-level trained.
Not just one person knows payroll. Now just one person knows our insurance products and our 401(k). It’s the critical components that make our business run. But a few of us are engaged on those pieces. That’s been critically important.
It’s even down to our customer service person. If we had one person who does what we call “confirmation emails” which is after an order goes out we tell them “We hope we did everything for you guys. If there’s anything else we can do, let us know” and if that person’s not here we need to have someone else doing that. We don’t just let the job go, and I think historically in the corporate world it was very one sided. What was your role? And then that was it, and if you were out you’d maybe make it up the next day.
No longer are we that way. I think you’re right. It’s so important when you hire someone to do something, you become very focused. Maybe by necessity in finding backups for roles that we know are critical.
Andrew: If it’s someone that’s not necessarily directly related with — I don’t know — some aspect of payroll, you might introduce them to that aspect and say, “If we need to do it, you need to understand this and get up to speed.
Deborah: Right, right. And I was trained on some things. I let go of doing payroll years ago myself. And so I told her, “I feel like I don’t know how to do it. If you were not to come in on the day that you did the payroll … Everyone was freaking out on me, first of all. I need to make sure that I know. Of course, I know if push came to shove I could do it. It’s so critically important to make sure that we have backup.
Andrew: One of the first things I see on the site when I go there now and even back — let me see — pretty much as soon as you bought. So before you bought the phone number was small on the very bottom of the site, an 800 number available from seven to five Pacific time. After you bought it the phone number went right to the top of the site, top right, in big, over the search bar.
I can see that you want to be engaged with your customers. You talked a lot about following up with customers after they buy. Can you give me a few tips on what you do to show customers you care before they buy and stay connect with them throughout.
Deborah: Sure. So whenever a customer ever calls and places an order without any information we call them back. We need them right away, but we try not to be too pushy because I think we don’t want to be a hard sell type offering. And then literally if they want to go directly through our site. Of course, they get the confirmation and all of the other emails that you would expect.
We literally give every customer a call because when you’re operating a business it’s a big deal to these people. All people inquire. It’s at the tip of the tongue. This is what happens, blah, blah, blah.
And you need to be calm and patient with every single person because these are the people that are going to be our life blood. In fact, years from now when they’re still placing orders or they’re serial entrepreneurs or they need us to do their [??] filings, it’s critically important that we call them back and we tell them what to expect.
Also, as you may know, the [??] take forever to get documents filed. It’s still the government that we’re working with. So we have this large variable. We do it in 24 hours, but the state may take three weeks to get documents back to us. Of course, there is nothing we can do about it. So there is this little component where we can upsell. We can continue to rush it. We can have someone walk it in, and a lot of people do do that. So there’s a financial benefit, of course.
And they’re is that benefit of education where the customer knows, okay, I going to expect three weeks, but when it comes in three weeks they’re thrilled that it was what we told them. If you don’t tell them three weeks and it comes in three weeks they’re thinking, well, my corporation I thought it was formed three weeks ago.
So I think all of it is about communication, not to mention our final email where we literally say and we send it to all of the customers every time we get a response, like you guys are incredible. We went to this company before. And we feel like it just generates a feel good with our customers. They confirm it in writing that we’ve done it, and we often do highlights of the businesses.
We put them in our newsletter. We want to cross promote our customers back because they’re starting their businesses. And so we kind of create a relationship where they continue to engage with us.
Andrew: And so, also, in addition to looking for all the good stuff and where your traffic was coming from, I did a search. The Better Business Bureau couldn’t find anything.
Andrew: Then I went to the Rip-off Report. I only found one thing that was clearly an anomaly. Someone who said, “I stopped working with them, and they still called me one time.” I thought, all right, that a mistake that could happen, but it’s not ongoing. It’s just amazing that you would do this and keep it all organized. It seems like it’s the software that you were telling me about earlier that is what helps you, your CRM. Is that right?
Deborah: Well, in terms of keeping everything organized, we have an internal CRM set up.
Andrew: Your own custom made, custom created.
Andrew: Okay. I feel like that keeps us virtually robotic in our cost [??]. We have awesome people who really know their stuff, and it’s been like a long time. And actually I believe passionate about it. And so our customers I feel get that, and we do make mistakes absolutely. But we fix it, and we do right by our customers when we do, especially when you have thousands of filings on a weekly basis.
Even if we don’t make the mistake, and maybe the state files it or says “your name ‘XYZ’ is available,” and then we file and they say it’s no longer available, of course the customer is mad at us. But we fix it, and we come back with alternative choices. So it is partially our CLN, partly that we’re automated (in a really nice fashion), but also that we have such heated engagement and we do right by our customers.
Universally, people come in when there’s an issue and say “Hey, Deborah! Should we give a refund? Or should we do this?” And I still just give a refund. Let’s fix this problem and let’s solve it and then let’s offer when they need their next [??]. If we need to give a refund, fine. But let’s also be really engaged and not just like “Okay, we’ll give you your money back,” because often, that’s not what people want. They actually want their documents filed.
Andrew: A solution.
Andrew: So calling customers after they buy, I see the value of that. Do you have a couple of other things? I’ll give you an example. I somehow got it in my head that I was going to send cards to some customers.
You know, whenever there’s an issue or if we talk and have an interesting conversation, I have some cards right here. I mail them out, and I’ve seen people even tweeting. They’ll take a picture and they’ll put it up online, and I wouldn’t have thought of that. Looking for other ideas like that. What else has worked for you? Calling customers? What else?
Deborah: We send a little package, a bundle. A pen, and a mouse pad, and a T-shirt, of all bizarre things-
Deborah: -to customers. It’s not necessarily your standard, everyday type of thing, but we send a little “Thanks for doing business,” especially to a repeat customer. If they’ve come back to us, or they’re someone who’s referred another customer, we send it to them.
My finance manager, my operations manager, and I packaged the packages this morning, because we’re thinking this is special, and it’s different, and it gets people engaged. We send See’s Candy to people on the east coast because they don’t have See’s Candy. They love it!
Andrew: You said what?
Deborah: See’s Candy.
Andrew: Oh, See’s Candy! They don’t have that on the East Coast? I didn’t know that.
Deborah: I guess not. So we sent one and they’re like “We’ve never had this before,” so now that’s our hallmark.
Andrew: See’s Candy.
Andrew: So you have it in the office on a regular basis, and when there’s something that you want to say thank you for, you just put it in a box, you have your whole process, and you mail it out.
Deborah: You got it.
Andrew: I need that, too. Having it handy is so helpful.
Deborah: I know! Because that’s just the [??] I’d say.
Andrew: You wouldn’t think. So I think I’ve got something right now. I got this. Let me just do that to bring the color back in the camera. I think I know who this came from, but let’s open it up and see together. Make sure I don’t cut myself with it. Yeah, there it is.
So this is from Wistia. I referred a customer to them, so they sent me their T-shirt, to say thank you to them. I want to wear the T-shirt. Stinkingness [SP] is what it would be. Wistia, by the way, does my video hosting. I used to have trouble with YouTube and other services. Wistia came to the rescue, so I use them.
Andrew: Yeah, actually.
Deborah: It’s nice.
Andrew: There, nice logo. Do you do anything like that to thank people who referred you or to encourage referrals?
Deborah: Absolutely. To virtually everyone who sends us referrals, we send a [??] T-Shirt, a visor, or a hat. And, honestly, we have these funny lunch boxes, which we get so much good feedback on–these little insulated lunchboxes. So we send a ton of stuff, always.
Andrew: Why? Why a lunchbox?
Deborah: I use it! So I always say to my team “I love this lunchbox.” You know, every day, you feel like you’re re-using it. It has our little logo on it, of course. But really, it’s just a token. I think it could be anything.
In practice today, we were discussing using up all the items we have and trying something new next time–you know, mugs, cups, pens, and the traditional stuff. But sometimes something a little different makes people think “Oh, that’s clever!” And the other day, I got this on the [??] out of [??]. It’s a bottle opener that’s from a vineyard.
Andrew: Yeah, I see it.
Deborah: It’s a lawyer that we work with. He met with us and said I always get him his documents on time and sent this to me. And I thought that was really clever. Maybe we should get away from the standard T-shirts and hats and just do something very different. Everyone comes into my office and asks “What is that thing?” I think it’s just fun to get creative and memorable, actually.
Andrew: There’s something about getting something in the mail that you can touch, that you can use, and in some cases that you can eat. I’m going revenue. What is it that it’s called? For some reason I’m blanking on it so I figured I’d just bring it up instead of Googling it, the company of record or something that we need.
Deborah: Registered agent, registered agent.
Andrew: Registered agent. What does that cost on an annual basis?
Deborah: Well usually it’s about $169 annually, and we have hundreds of thousands of customers that do it.
Andrew: Hundreds of thousands of customers who pay you 150 or so dollars. Unreal, okay. But it’s still even not a huge price, and so for less than $200 a year that you might get from a typical customer, you’re able to do all this customer support. You’re able to pay for all the things that you send out to them. Is that right?
Deborah: Yep, and there’s pretty low overhead on something on that, you know it’s not extensive costs, so the best thing is on a renewal we’re getting this kind of service. Of course, we send out their documents if they get sent to us and those types of things, but the majority of customers really don’t get a whole lot of service and process their documentation and so it ends up being a pretty profitable venture for us.
Andrew: And once you get a company to do that, you just stick with them, we stick with you.
Andrew: So, here’s something else that I noticed. I don’t even know if you noticed about the site. At one point, maybe even still now you’re sending people to a popup from Hpylrg.com. I don’t even know if you know it. Was there a virus on your site that caused that to go up, or were you using popups on the site for a few weeks?
Deborah: I don’t know.
Andrew: I can’t trace it.
Deborah: [??] I’ll ask [??]
Andrew: You know what. Let me give you a list, including. I’m going to send this directly to you. A list of all these things, all these popup services that are sending out… That you’re sending traffic to. I’m going to put it right here, and I’m also going to include a couple of articles if I can find them, about what this could be.
It’s either an ad or it’s maybe malware or something. Here, I’ve included a Google search results so that you can see it. I don’t think it’s on your site anymore, but, I still think it’s worth showing you. Here, I’ll put it in Skype-Chat for you.
Deborah: Okay, thank you.
Deborah: Got it. I’ll ask him.
Andrew: I just find myself digging around and making sure… You know why, Deborah, because I can see that you’ve got a… I think you’ve got a successful business. When we met I thought, maybe it’s good. But I always worried that one of these guys who is only good at self-promotion is going to snow me, and so I tell my team. Research people, find out if they’re the real thing.
I do not want to be embarrassed by having someone come on here who says that they built this great company, and then find out later on a dinner someone comes to my house and says, you know what, I know that person. She’s really good at [??] games, trying to get publicity and to use you. I don’t want to take advantage of my customers that way.
Deborah: I hope I’m not.
Andrew: You’re not. I did my research as you can see. I’m finding out all kinds of stuff. I can see that Corporate Seal like I said is a big organic keyword for you. I can see you do paid search, paid keyword search for companies, for words like DBA in California, Intuit register S-Corp. DBA registration, I’ve got all kinds of research.
Andrew: You’re the real deal. What kind of revenue are you generating with this business?
Deborah: Just over eight and a half million a year.
Andrew: Over eight and a half million? I didn’t see that, wow?
Deborah: I’m only telling you.
Andrew: Wow, thank you. How long did it take you to turn a profit with the business?
Deborah: We were profitable by the second year. But the profit wasn’t marginal. We went profitable quickly. I couldn’t as an individual afford to be losing millions a year. So it went fast, and we remain profitable. We continue to optimize our profit. Certainly we found certain ventures when we spend more we make more [??] were not as profitable.
So we constantly are focused on what’s making the most for us, and truth be told I think it’s [??] a lot, sometimes it’s seasonal, sometimes Google changes their algorithms, or our search engine marketing team has as strategy that doesn’t work, or spent a ton on social media. I’ve traveled a ton to try to generate business or relationships that may not be successful, or sometimes they’re incredibly successful, so it just depends.
Andrew: We asked you if you could recommend a book to the audience, what would it be. Do you remember what you said?
Deborah: I said, “Onward”, by Charles Schultz, right?
Andrew: Yeah, why?
Deborah: I love that book. I feel like it’s not just a happy, happy story, right, because there’s also this big [??] where the business is not going in the direction. And big changes are afoot, even just saying things like did the smell of the cooking of the sandwiches disrupt the actual aroma of the coffee beans, and was it compromising the integrity of the entire business.
I don’t know why it just resonated with me in a way… Plus I saw him speak and I think that helped too. I just felt like, it just resonated in a way that not all things stay the same and you always have to be on your toes. And even at huge companies like Starbucks, and we’re not, obviously, even in that ballpark. And I don’t even know if I’d want us to be. I feel like right now.
Things are so good and maybe it doesn’t have to be 800 million. Maybe eight and a half million is a happy number and we’re all successful and everything’s marvelous. But staying on your toes is critically important even to maintain that amount of success.
Andrew: I don’t know why I hadn’t read that book, but I did read his first book, “Pour Your Heart into It”. And what you are talking about, the smell of the sandwiches. I remember him obsessing about little things like that. In the book, he talked about how someone wanted skim milk or light milk and he said, “Well that’s not the way they do it in Italy. Should we do this?” It was like a personal crisis. He sat down, he tried it, he experimented. And then he finally gave in because it made sense. But that attention to detail is something that I forget he has.
I think we’ve got a lot in this interview. I am going to suggest to people that if they want to check out the site that we’ve been talking about that they just log on to, just go to MyCorporation.com and sign up. I vetted her. I vetted the company. I’m proud to have them on here. I take this stuff so seriously.
Deborah: I love it. That’s great.
Andrew: Thank you. You know what? Here, let me see if I could — well, where was that? It’ll take me too long. I just got another email from someone in the audience who said, “Andrew, I know you keep worrying about whether you are having any kind of an impact. I built my business while listening to Mixergy and it helped me so much”. And I feel like that is the mission right here.
Deborah: Yeah. Let us do a promotion of you on our newsletter, too. That will be fun.
Andrew: I would love it. Do you want to send out this link to this interview when it’s up?
Andrew: Awesome, this is terrific. Thank you so much for doing this. Thank you so much for telling your audience about it and I hope we will get to meet in person.
Deborah: Absolutely, it was my pleasure. It was nice talking to you.
Andrew: Same here, and thank you all for being a part of it. If you got anything of value from this, please find a way to tell Deborah. Find a way to say thank you. It’s such a good way to start a conversation or relationship with someone. And I can see in my notes here that she is a relationship person to the hilt. So if you find a way to say thank you, I think that it’s going to go a long way.
Thank you for being a part of it. I’ll say it to you first. Bye guys.