Entrepreneurship Podcast post

Entity Formation with Chad Sakonchick

admin November 19, 2021

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Entity Formation with Chad Sakonchick

LifeBlood: We talked about entity formation, how automation and technology is making it easier and bringing costs down, how the legal industry is trying to hold onto old practices and what the future holds with Chad Sakonchick, Creator and Founder of BetterLegal, a one-stop-shop for business and entity formation in all 50 states. 

Listen to learn why you just need to get started with whatever you’re thinking about doing!

For the Difference Making Tip, scan ahead to 16:51!

You can learn more about Chad at BetterLegal.com, Twitter and LinkedIn.

Thanks, as always for listening!  If you got some value and enjoyed the show, please leave us a review wherever you listen and subscribe as well. 

You can learn more about us at MoneyAlignmentAcademy.com, Twitter, LinkedIn, Instagram, Pinterest, YouTube and Facebook or you’d like to be a guest on the show, contact George at Contact@GeorgeGrombacher.com.

You can find her newest book, The Hope Driven Leader, here.

Please subscribe to the show however you’re listening, leave a review and share it with someone who appreciates good ideas.  You can learn more about the show at GeorgeGrombacher.com, or contact George by clicking here.

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Our Guests

George Grombacher

Chad Sakonchick

Episode Transcript

george grombacher 0:00
Come on. One Life lead. This is George G. And the time is right welcome today’s guest strong and powerful chats a conscious chat. Are you ready to do this?

Chad Sakonchick 0:19
I am excellent.

george grombacher 0:21
let’s let’s let’s go. Chad is the creator and founder of better legal, they are a one stop shop for business and entity formation in all 50 states. Chad, tell us a little about your personal life some more about your work and why you do what you do.

Chad Sakonchick 0:37
So both my grandparents and my father were all entrepreneurs. So I think it’s just kind of in my blood. I’ve been trying to be an entrepreneur since college. So I was trying to do kind of the indie hacker thing back in 2005. You know, I started with the with a site called renta coder.com, which has now been bought three times is now part of Upwork. So I’ve just always been interested in you know, creating businesses, mainly because I’m lazy. Like, I’ve got to do something more than once. I want to automate it. So if someone asked me to do something, once, I’ll be originally do it the second time, it’s like, Okay, how do I get out of doing this a third time. So I’ve always been interested in automation or building tools, instead of having to do things manually. So that’s kind of follow me through my entire career. I, you know, I graduate from college, I worked at Dell for a year, then I tried to do a kind of like a Squarespace competitor back in 2005. Then I worked for an integration company for about seven years that integrated Salesforce and QuickBooks, which is a huge, huge thing, a lot of small businesses that were getting on to Salesforce, but with their first CRM, you know, over a decade ago, we’re coming with QuickBooks. And so you know, we migrate the QuickBooks data into Salesforce, which is a huge win. And so that, that stint at the integration companies really, I think, what really got me into automation, and to the point where the CEO would call everything I did chat, imation, because I was trying to constantly just

work myself out of a job. So I’d automate everything I did. And then I kind of just level up and I just had all these processes working underneath me. And so with better legal, I had a buddy who was an attorney, or is an attorney, I should say it my dad’s an attorney. So you know, we always kind of had a lot of, you know, discourse about, you know, what lawyers do, and how legal industry works and whatnot. So my buddy, what went off solo, as a solo practitioner, left his law firm. And he was trying to drum up any business he had, you know, he said, he had a seven month runway, and that didn’t mean that he had $70,000 saved up, it means that he had $70,000 in credit card debt available to him. So he was just trying to drum up business on avo, upcounsel, all that jazz. And he was struggling with business formations. It’s an easy way to drum up business for an attorney, people would call and say, Hey, I need an LLC, how much does it cost? And he’d say, you know, 15 $100, and say, why does it cost so much, I can get it from LegalZoom for 600. He’s like, but I’m a, I’m a real boy, I’m a real attorney, you can come to my office, and we can talk about exactly what your legal document should say. And, and he was just losing all of his business. And the best way for an attorney to build their, their user base or their client base is to have is the form the new businesses, because eventually those people are gonna have more contracts are going to need to have looked at disputes in the future. And so this is a great opportunity for him. And he just was losing all of this new business because he was charging so much. I said, you know, why are you charging so much? And he said, Well, you know, the state of Texas charges $300 for their state filing fee, so I can’t do anything about that. But then the other, you know, 12 $100, that’s, you know, it takes me four hours to put together these legal documents. And what he meant by that was, it takes him four hours to go through a boilerplate document that’s about 40 pages long, and manually do data entry state of Texas, you know, manager name is, and so he was doing that manually, and I was like, dude, how are you charging people $300 an hour to do data entry. And so we came up with a system that that really trimmed down the time and to the point where he said, okay, you know, I’ve got one, let’s test it. He’s like, Okay, I’m done. How How long did that take me? And I was like, nine minutes, 21 seconds. And he’s like, Oh, my God. So then, so then we kind of just started charging 299 he was like, I I’m gonna make more money per minute than I would by charging people that they’re already kind of pissed off about. And so that’s how it started, we just started doing Texas LLCs. And we’ve been automating everything. So you know, instead of a human going in and filling out a Texas or New York formation on the website, we have a bot do that now. And we have the bot, download the information and verify that it matches what’s in our system before it goes on to the next step. And then once it’s verified, it automatically goes and gets the Ei n. And then as soon as it downloads that, it verifies that that information matches what’s in our system, and then it generates the legal documents, and then it automatically fires off to the customer. So we’re at the point now, where we’ve got about 70% of all of our filings that we do are automated. And so the people that are our filers are people that manage these automations and build these automations. But now that allows us to have kind of less overhead and do less of the redundant every day, just monotonous work, that is the same thing every day. And now we get to spend more time with our clients, because our clients eventually have to do a name change or an address change, or they want to add an owner add another manager operator to the business or or domesticate into another state expand into another state. And because we don’t have automations, on all that stuff yet, that’s the stuff we do manually and those things are onesie twosie. So yeah, so we’ve, we’ve really kind of built kind of a, we’ve taken legal zooms model and just leveled it up. And we have much less overhead and much less people. We’re very heavily automated, but with verifications in, in, in line. And so when someone comes to us to start their LLC or corporation, we provide them all of that service. But then we also help them manage it. So they can go in and they can change their information in the dashboard. And we automatically go and do that.

handle that instead of getting this back and forth. Or someone says, Hey, I want to do a name change, how much does that cost? And then we say, Okay, well, that costs this, and this is how long it’ll take Well, they can actually just go change that in their dashboard, we go look at our database of 1500 filings, and we automatically pop up and say, Hey, this is gonna take two days gonna cost, you know, $99 plus a $25. State fee, do you want to pay for this, now we’ll get going on it. So we’ve really tried to trim down everything that needs to happen. So that the small business owner who’s just trying to bake bread or sell stickers, or, you know, plumber, or carpet, whatever it is, like they should focus on the things that they need to focus on getting clients, making their clients happy doing all this stuff, and not have to worry about all of the administrative tasks that our governments have just burned us with. So we try to make all of that just super smooth and clean.

george grombacher 7:55
Nice. I appreciate that. I always love hearing stories about people recognizing a problem and then coming up with a solution to it and making that into a business.

Chad Sakonchick 8:05
So yes, it’s funny because my dad, my dad tried to bribe me to be an attorney. He really badly wanted me to be an attorney. And so this is I kind of stumbled into, you know, the legal and small business formation area, but grudgingly but you know, I love it. I love every day building and figuring out what are the new problems? And how do we build tools or solutions to help people manage these things?

george grombacher 8:30
So are you actually a law firm?

Chad Sakonchick 8:34
We are not? No, it is a huge distinction is we can’t be and we can provide legal services or anything like that. But what we do is we provide a lot of education. So there’s a lot of facts out there. And so we’ve got a YouTube channel, it’s just if you go to YouTube and search better legal, I post once or twice a week. And I literally just take I’ve got a in discord, we’ve got a discord channel that literally just takes any chat, the first chat that someone writes to us on our website, I see questions, you know, pop up more than once or unique question. That’s interesting. I just make that the topic of a video. And then we kind of refeed that into the chat with using our, you know, ai chat bot, where when someone asks a question that we now have a video about, instead of us kind of getting into trouble by doing what’s called the unlicensed practice of law, we just say hey, this video can kind of add some more context to what you’re asking and give you some answers based on like, what are the facts? So we’re not helping you make a decision? Because, but but here’s what’s also interesting, no lawyer is going to tell you what to do either, because no lawyer wants the liability of giving you an answer. Then you come in back and saying that was the wrong thing. So like, you know, and then sue the lawyer, report them to the state. And so lawyers will now just stray away from giving a direct answer. And they will say, here are your options ABCD. And so if that’s all they’re doing, we can do that as well and just say, Okay, well, here are the facts, here are the options, ABCD, you make your own choice, and you just tell us what you want us to do. And so that’s kind of what we’ve fallen into. So instead of small business, folks, spending three to $500 an hour, we just got a $20,000 legal bill from our attorney. Just doing a simple conversion from an LLC to a corporation may charge us a whopping $20,000. And so being a firm that kind of like, automates a lot of these things, I shouldn’t say firm, being a business that automates these types of things. It’s really frustrating hell legal bill like that, where you’re like, well, at least, this is why we’re doing it, because small business owners that are making maybe, you know, $80,000 a year, you know, that’s a great, you know, sole practitioner, sole proprietor, LLC, single member LLC, if they’re making 80 grand a year, you know, they’re doing great. can they afford like a $5,000? legal bill, that’s insane. Yeah, and doing something that is, you know, kind of run of the mill, and, you know, is a standard very simple thing. But an attorney doesn’t do a change of manager or a change of address with the state every day. So they’ve got to figure out how to do it, or they send a paralegal to do it. But then they build the client, the full rate, to figure out how to do it, execute on it and do that. So it’s just, it’s unnecessary hourly billing. And I think that’s kind of the downfall of, you know, of legal right now, you know, law should not be doing this bottom rung of just very simple, redundant work that is just a lot of kind of just, you know, filling in boilerplate documents and interacting with the state, they should be doing like high level problem solving, dispute resolution, things of that nature.

george grombacher 12:07
Interesting. I don’t know how close you pay attention to like the world of financial services, you look at how robo advisors are coming online, all these new sort of FinTech companies disrupting the way that that financial advice is distributed. And obviously, there are similarities there. Do you think that the legal industry is slower to address this the same speed? How are they thinking about it?

Chad Sakonchick 12:37
Man, they’re really, unfortunately, really slow. Because we’ve developed our service, we have a kind of a white label service. So our goal is, you know, we can’t fight Legal Zoom with ad dollars, you know, we just don’t have the money. They’re a public company, they they’re worth, you know, a couple billion dollars. So our strategy was, you know, well, we can just create an army of clones. And so we’ve got, you know, if, if you have, like, for example, if you want to start referring customers to us, you can go to referrals, dot better legal comm and your friends or your network will get $100 discount, we’ll send you $100 check for everyone. But we also have this white label service that we built for lawyers and accountants. And we’ve been trying to get lawyers to to do this. And they’re like, No, we’ve got our process. It’s fine already. They’re just they they’re so they’re, when they go to law school, they’re so ingrained with the idea of billing hours, and if they’ve ever worked for a law firm that has someone over the age of 60, that is still at that firm at the helm. It is if you think about if you think about a client for five minutes in the shower, you build them 15 minutes. If you if you if you think about them for five minutes in the shower, you build on that 15 minutes in the shower. My dad said like when he worked for, you know, the law firm when he was coming out of law school in the 80s. Like that was ingrained in their heads when he was working for law firms in New York. So unfortunately, that’s just what it is. And I don’t think anybody now we’ve got this problem. We just have too many attorneys law schools are just recruiting people pumping them out. We’ve got too many attorneys, so it’s now top heavy. They’re all trying to get their hourly rate. They’re all trying to make ends meet until they’re all charging us a crazy amount of money. And so I think there’s going to be a disruption at some point it just like FinTech with banks, you know, banks are slow to adapt, and square. And so fi and web three and Ethereum and all this stuff is just going to like flip everything upside down. All these existing banks are going to just be sitting there holding holding the bags being like, wait a minute, what happened? I mean, look at square buying after pay for like $29 billion. There’s a reason why they did that. And it’s because, you know, millennials and Gen Z don’t have credit cards because they don’t they see what their parents are Got into with credit card debt. And so they’re like, yeah, if I can just pay in four payments, I’ll do it. So yeah, I think it’s I think both FinTech and legal services are riding the same rail down the same path.

george grombacher 15:13
Interesting, super smart. So you can essentially be like a back office to a law firm for folks that are open to that. But then also, regular folks can make this a side hustle.

Chad Sakonchick 15:26
Yeah, that’s exactly right. So if you just happen to have a network of people that you know, maybe you’re really popular, your co working space, maybe your coffee shop has a lot of entrepreneurs coming into it. So you can essentially be your own local, better legal, and you can name it, you know, local coffee shop filings.com. Yeah, so if someone goes to partners, dot better or partner dot better legal calm, they can learn about the white label service we have, or they just have some friends and they want to give a coupon code kind of like you do it with like Venmo or, or Uber, or Stitch Fix, we have the referral codes, you can just go to referrals, dot better legal calm and get a little code. Even if you’re not setting up an LLC, maybe you got three or four friends that are all starting their own side hustles for businesses, you can send that to them. And we’ve got tons and tons of educational information. We’ve got a small business guide that that it’s like a little Choose Your Own Adventure comic, which helps you decide should you be a limited partnership or corporation or an LLC or a sole proprietor?

george grombacher 16:37
Yeah. Awesome, smart. You’ve thought of everything, Ted? Not yet. I love it. Well, Chad, the people are ready for that difference making tip? What do you have for them?

Chad Sakonchick 16:50
The one that I’ve been really addicted to lately is just getting started. You know, my fiance just started a charcuterie board business and so I’m she, you know, she’s she’s gotten her first few orders, you know, she was trying to plan everything upfront. And I was like, just like, throw it out there you know, and she she did she just threw it out there and she’s got like five commissions all of a sudden and she’s posting on Instagram and people are saying hey Thanksgiving that you know, Christmas or I’ve got a party or I just want to have a girls night and so I’d like to have a charcuterie board made for me. And so I think a lot of people think that they have to know a lot to get started and what a lot of people don’t realize is most of us that just get started and become successful know very little going into it they know enough and then as long as you just listen to your customers and kind of adapt to them and make sure that you’re you know covering your your your costs. That’s it just just get started and just stack that knowledge on top of each other one at a time. Build that knowledge tree starting with the trunk and grow with every little thing you learn

george grombacher 18:02
why I think that that is great stuff that definitely gets come up come on. I love it just got to get started. All right, we can absolutely find ourselves in in analysis paralysis and then nothing ever gets done. So get moving. Love it with Chad thank you so much for coming on where can people learn more about you? How can they engage with you

Chad Sakonchick 18:21
so they go to better legal calm to just get an LLC then go to referrals dot better legal calm to get a coupon code that they can send their friends. They can go to partner better legal calm if they think that they actually have a side hustle we’ll give them all the tools to be successful and start their own clone of us. I’m on Twitter all the time. So twitter.com forward slash c s AKO N as in Nancy si se con Yeah,

george grombacher 18:48
love it. If you enjoyed this as much as I did show your appreciation and share today share with a friend who also appreciates good ideas go to better legal calm if you’re interested in forming an entity if you are interested in making a little bit of money go to referrals dot better legal calm and if you want to turn this into a side hustle, go to partner dot better legal.com Thanks. Good chat.

Chad Sakonchick 19:14
Thanks for having me.

george grombacher 19:15
And until next time, keep fighting the good fight. We’re all in this together.

Transcribed by https://otter.ai

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