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Thursday, Feb 22, 2024

Owner Comes Full Circle

When the legal services site MyCorporation.com was acquired by software giant Intuit for $20 million in 2005, the team celebrated. The success and growth potential of the business built over seven years was validated with an acquisition most start-ups dream about. Yet, it didn’t take long for MyCorporation to realize that some small businesses are better off on their own. “Large multi billion dollar conglomerates have a tough time running small businesses, thinking like small business owners,” said Deborah Sweeney, a long-time MyCorporation manager who bought the company back from Intuit in 2009 for less than it was sold for. The move back to its small business roots has already paid off, she said. Breaking away from Intuit- a publicly traded software company whose revenues top $3 billion, while risky, has allowed Sweeney to also break away from a research and development process that she said stymied the small company’s ability to respond quickly to market changes. “It quickly became clear that we needed to part ways,” Sweeney said. “We wanted to be a bit more entrepreneurial, make changes to the business and be nimble. Being part of a large organization wasn’t very conducive to that type of change.” With regained freedom from a strict corporate structure, Sweeney has been able to make structural changes that have reduced expenses and improved the profitability of the online company. Small business roots MyCorporation.com was founded in 1998 by law school friends of Sweeney with the goal of providing affordable and easy legal business documentation services for a fraction of the price that an attorney would charge. MyCorporation provides incorporation and LLC formation assistance for businesses in all 50 states, and is an online resource for business owners on such topics as securing the proper legal business structure, reporting and filing documentation and intellectual property protection. During its inception, Sweeney, who was a partner in a law firm at the time, was brought in to provide outside counsel to MyCorporation. She later became the company’s full-time director of legal affairs. After Intuit acquired the company in 2005 and the original owners left, she was tasked with leading the division within Intuit. “I loved the company and I saw it as a huge opportunity,” she said. “I had gotten good at understanding the customers, at listening, paying attention, and analyzing what it is that they are looking for and I think Intuit saw that in me.” The acquisition by Intuit, the company behind name products such as Quickbooks and Turbotax, validated the growth potential of the business. Demand for online sites like MyCorporation has grown in recent years as more entrepreneurs look to the web to find more affordable ways to start and maintain their business. “MyCorporation has definitely helped a lot of people who could not afford to start their business otherwise,” said Rick Dunaj who initially sought an attorney’s help in establishing his Los Angeles marketing start-up, Dunaj Agency, as an LLC in 2008. The fee he was quoted to file for incorporation, roughly $4,000, was more than he could afford. At MyCorporation.com he paid about $200 to get the job done. “Especially today, small businesses need to be cautious with their money and put all the money they can back into their business. This service helps you stay on top of everything you need to run the business from the legal standpoint; you get everything you would need from a lawyer and more.” Friendly divestiture As a standalone company again MyCorporation, with projected annual revenues of $20 million this year, has maintained a strong partnership with its former parent. Intuit executives could not be reached for comment, but Sweeney described the divestiture as easy and seamless. “Intuit was phenomenally helpful, they got it, and they really wanted to see us succeed,” she said. “Now we have a phenomenal relationship.” MyCorporation’s partnership with Intuit has served as a vehicle for cross promotion. MyCorporation’s clients are referred to Intuit’s Quickbooks and Turbotax and Intuit also helps drive traffic to MyCorporation.com. Since the friendly breakup, Sweeney has been able to implement changes that would have taken a long time to carry out under Intuit’s R&D process. “MyCorporation needed a faster approach especially when tax and corporate structure laws are constantly changing, and necessary updates needed to be made almost immediately,” she said. Sweeney has also adjusted the cost structure of the company and returned to a small business framework. The company left Intuit’s brand new corporate building at Warner Center and moved to a smaller office in Calabasas. Frequent formal meetings are long gone; dialogue is spurred by an open floor plan with no walls or private cubicles where casual attire also drives a more relaxed atmosphere. “I want people to know it’s not corporate anymore; we don’t all hide behind our desks anymore. It was strange at first, people complained it was too loud, but now it’s phenomenal.” Those expenses incurred from frequent trips to Intuit’s headquarters in Mountain View, offsite work retreats and large team building events are also a thing of the past. Once on its own, the company took a deep look at unnecessary spending. “When you start getting the bills directly sent to you instead of the accounting department you start realizing, ‘wow this is something we could save on, we don’t need to do it this way, we could do it this way’,” she said. Sweeney, who calls her 27-member team a family, takes pride in the office culture that has developed at MyCorporation, which is as far removed from “corporate” as she could possibly take it. Of the 27 employees, seven are new hires; the rest have been with MyCorporation since the Intuit days. Focused on growth For now, Sweeney is focused on growing the business and improving margins. The company is offering promotions, including waiving their $149 service fee for all businesses that want to incorporate through their site this year, as a way to introduce clients to their services. These have been successful, especially during the down economy, at drawing in new customers. “People are looking for ways to save, even large companies, big franchises, companies that you wouldn’t expect, are coming to us,” she said. Sweeney plans to continue emphasizing MyCorporation’s “hyperfocus” on businesses; which differentiates it from competitors including LegalZoom. “The difference between LegalZoom and us is that LegalZoom is for legal filings, they do estate plans, wills, trusts, divorces and they’re good at that. We don’t do that, we focus on businesses. We don’t just do your legal filing, we’ll help you with logos, with QuickBooks with TurboTax, with network solutions, your domain name… we want to be more of a business bundle solution with a business focus and less of just being a legal filing business.” Although investors frequently call and she listens, selling again to a larger corporation is not something she’s contemplating. In fact, she jokes that one day her children will take over the business. Still, “no one in their right mind would say no to a phenomenal offer but I’m not searching for it,” she said.

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