Your Legal Edge: Stan Padgett's Guide to Entrepreneurial Success | OM026

We recently had conversation with rich Goldstein right? recent episode, which is will be posted in the show notes here want to make sure you're always referring to different notes, different episodes. And we're talking about IP legalities, right, making sure that you structure yourself well. And that's great episode but opened the door to just legal conversations. Now, I'm not a lawyer, and I do not play one on TV. And I do have some well connected very intelligent friends and colleagues that are in the legal field that have immense amount of knowledge. And one of them bringing to you today in this interview, and he's share a few legal insights. But this is not about the legalities. It's more about the wisdom behind the decisions that are being made. And I want you to be able to, to grab that and really lean in and soak this up. Because Stan is the sands of good man, Stan Padgett. He has been practicing law for 40 years, he's very successful in his business thrives financially. And it is a wealth of wisdom and knowledge and insight for growing entrepreneurs. And, you know, I've gotten to know him over the last year or so in a mastermind environment that we're a part of. And every time he speaks wisdom falls, he understands people understands relationships, and understands how business grows, and how business is sustained. And he's always got a lot of great things to say about it and always comes from the heart. You never hear anything from him or hear him saying anything, where you don't believe it 100% Because you know, he's saying it to you and for you and for your benefit. You're not to share knowledge to sound like an expert, like many of us do at times. So I'm very honored to be able to bring Mr. Stan Padgett to you. And I want to encourage you to just open up your heart, open up your mind, open up your ears, and enjoy this episode. So opportunity makers here you all are and you just heard the bio on Mr. Stanley Padgett and all the formal stuff. But now let's hear from the man himself. Stan, what makes you a viable person? What makes it what's your story? How did you get here? And how are you a relevant person in this conversation?

Well, I came from a family where my dad was the first person in his family to graduate from college. And he went to the Air Force, like 17 years old and went into went to Korea during the Korean conflict came out, went to college on the GI Bill became a civil engineer. And so, you know, education was very important in our family. And I was fortunate enough to go to college, go to law school, get out. I initially intended to go to college to get both an engineering degree and a law degree. And my dad gave me some advice. He said, Son, go to law school, hire an engineer. Okay, Dad, after my first college math class, I concluded he was absolutely correct. But I went, I've been practicing business law for 40 years, I've represented businesses of virtually every size up to an including fortune 100 companies. Over the course of 40 years, I do a lot with entrepreneurs now. And it's, it's fun to do business with them. Because I try to be a resource and say, some of these entrepreneurs are weren't born, when I've been practicing for 10 years. So I say look, let me just kind of tell you what it looks like to me from the perspective of 40 years of doing this, here's what I think's gonna happen if you follow this path, that you take your own path, you chart your own course. But I've seen business owners do this, this this multiple times. And here are the range of outcomes. So you want and that's kind of the background how to get where I am today. But with respect to your, your, your opportunity makers, it's to me it's that true entrepreneurs really never have a scarcity mentality. Right? They look at things and say, hey, you know, in the in the seeds of every adversity is, are in the in every adversity of the seeds of a greater triumph. You go back to 2008 to the real estate crash. People with cash went out and bought up real estate at rock bottom prices. That's now producing either great income or tremendous returns when they when they dispose of those assets. So was that a hard time? Yeah. Was it an opportunity? Yes. I think if you pick any pretty much any event in history, say the same thing. World War Two is a terrible thing. millions millions people die. industries were created. You know, the America went from having a navy of almost nothing to 1000 send ships in two or three or four years. So we put Americans to work we created industry we we built ridiculous numbers of ships, airplanes, tanks, arms, we put a million plus men in uniform in a very short period of time. So the bigger the challenge, the bigger the opportunity.

Amen to that bigger the challenge, the bigger the opportunity, I can't agree more. What are some of the things that you see happening in the marketplace right now that are just simple opportunities for people that might be going unnoticed?

I think the one of the big ones would be to follow up on the Amazon model, I think you've seen Walmart get into the delivering groceries, you've seen delivery, you know, when you and I were kids, if you could get a pizza delivered, that was a big deal. You know, the idea that you could buy groceries or you know, I actually just got a book today, I ordered it on Amazon last night, it was delivered to my home today. So I think the concept of retail shopping has been changed forever. And that's going to continue. If you can figure out a useful thing to do with commercial real estate, strip centers, even Class A real estate in metropolitan areas. It's interesting, I said, 2008, when the when the housing market crashed, I told a bunch of people I said, that's not the big shoe. The big shoe to drop is the commercial real estate problem that's coming didn't really happen until the pandemic, when people went home. And employers thought they were going to come back, they're not going back. Just read an article yesterday or the day before that San Francisco's occupancy rate or vacancy rate for class, a downtown real estate is in the mid 20s. And at least one person said that's way low, it's really in the mid 40s. Who's going to take that space, nobody, because you can't get employees to come into metropolitan areas to work. And if you think about it from a business perspective, you guys have a very limited talent pool where you live. But if your employees can all work remotely, your talent pool just magnified to 330 million people in the US alone. Right. So I think it's people who are going to figure out how to make those types of things work for them, they're gonna find solutions for problems had people have today, they didn't have three years ago.

Yeah, and you know, you'll have to, it's just it's going where the problem is, and finding the resources that work. You know, because one of the things we're working on is our opportunity cities model, which is building call centers, Opportunity Centers, for ex cons and aged out teens, which is a market of is a segment of the market, the employee pool, that they need a physical place to go, they can't, you know, they're not, they're not they haven't been designed to thrive in this virtual world that we live in. And they need more encouragement and human connection and support. So it gives us the opportunity to take advantage of underpriced commercial real estate that we can get access to, and people who need to be in a physical location in a downtown environment where they can take a bus and get to work. And then we can, you know, we're training them on sales skills and giving them purpose and meaning and mission and, and opportunities to change their life. Because our mission is to flip the recidivism rate so that people are staying out when they come out instead of hitting the revolving door in the prison. But that just comes from that part of that mission. And like God's got this, you know, tapped in this is what, you know, this is what the calling that he's got for it for me. But there's also, again, I could you know, why why? Why train up a whole new group of people who don't want to work in a physical location, right, put it go to a place where people actually do want to be in a physical location instead of trying to convince people who are remote, you know, take advantage of what's available currently. You know, and I think sometimes it's just, I believe we have a tendency to overcomplicate things. And you see that I mean, how many, how many times do people ended up in a courtroom or in a lawsuit simply because it is at the root of it, how much of it what percentage of it is simply because it was just too complicated and people didn't know how to how to how to execute without messing it up.

Jim, as you were talking, I was thinking of a couple of areas that I think are huge opportunities. If you can figure out how to make how to productively In profitably use malls, you're gonna make an incredible fortune because my own belief is that no, there will never be another mall retail mall built in the United States. And they are going to be abandoned. You know, as as the big box retailers go under the little side shops are not what drives malls, the big boxes are intended to bring the foot traffic to allow the smaller businesses to to survive. That model is not working there were already closing malls, if you could figure out how to do that. That's one area that I think is a creative person's nirvana. The other one for me is if you can figure out how to reimagine education. We've got, you know, a huge cultural divide in the country over public education versus homeschooling versus indoctrination versus parental control of what goes on in the schools or to what level they should have and all that, I think that you are going to see a massive movement away from public education, to either homeschooling or some other model. You know, I really hoped that the pandemic when we closed schools for six or eight months, would give the opportunity to reimagine education America. You know, why did Amazon Why is Amazon kicking the pants off Walmart, because Amazon has, you know, 24 locations versus Walmart's 5000. You know, they can create economies of scale, okay, there's still got to be a way to do that with education as well. Think about how many schools we're building the cost of those schools, the cost of the buses, the cost of the fuel, the ongoing maintenance, there's got to be a better model. Right? I think if you took out all of those costs, you could give a teacher, a dozen or 24 students instead of 240 students, and say, I want you to work with these students for the next nine months. And I want here's the outcomes we want. You go figure it out, you'd eliminate massive layers of bureaucracy and busy work paperwork the teachers do, it would become about the students and about learning. There's just there's got to be better ways.

Like that? Well, that's the theme, right? That's the whole deal is like, there's always a better way. There's always a way and and that's what opportunities are all about. And, you know, if you listen to this podcast, you know, obviously, the word opportunity comes up an awful lot. It is part of my lexicon, but it's just I want it to be in your DNA, I want you to just be thinking that opportunities are literally like bird seed on the ground like raindrops like manna from heaven, they're just there. And the only time they're not is when we start trying to make it be something specific instead of taking advantage of what's existing. And, you know, what are some of the key challenges that you see those that that are holding people back from really stepping into some of these great opportunities that exist? I

think one of them really is that the education system in general is designed by and for people who are risk averse. Think about for a moment, there are people there magnificent teachers who view that as their life's calling their life's mission, and bless them, because we need a whole lot more of them. But a lot of people chose being a teacher, because it's nine months of the year, you got a long vacation, you got a steady paycheck, if you think about it, they take zero entrepreneurial risk, unless they have a side hustle. So what you have is a group of non risk takers, educating our children. They can't teach our children to be entrepreneurs, because that's not how they think. If we could figure out a way to add at the kindergarten level that the you know, the the LM the fourth grade, that you know, the kid, the old fashioned thing was the lemonade stand, right? Right. We got cost of goods, we got labor, we got materials, we got pride, we can do this. If you train people to begin to see those opportunities, and instead of kind of drawing it all themselves and getting really anxious and fearful, in a difficult environment and say, Hey, man, I want to be the little kid looking for the pony in the pile of manure under the Christmas tree. Right.

Right. Well, so what is uh, you know, you deal with a lot of entrepreneurs, a lot of business, you see a lot of things happening. And, you know, what are some of the mistakes that people are making in today's marketplace that that you think are easily avoidable? If we just look differently?

One of the easiest one is when they set up a business they very often have, you'll have a young aggressive person who will say I've got a great idea Jim Stan, you're older, you'll be more established, how about you put up some capital, I'll put up the sweat, let's do a deal together. The challenge with that is that they very rarely lay the foundation correctly. It's a little bit like building your house on on balsa wood as a foundation, right? Because at some point, your interests are going to change, you're even if the business is wildly successful, if you've got a 25 year old and a 65 year old, who are doing something together, at 75, that person says, I don't care how good the business is, I want my money out, I want to go to Tahiti for the rest of whatever I got. And the third that person then now you have the other one who says, Wait a minute, I'm 35, out of rock this thing to a billion dollars, I can do that in the next 20 partners is wherever I will be here in 20. I don't care. So how do you create a circumstance where they can exit one or the other of them can exit the business on a fair, reasonable objective basis, that doesn't destroy the business. One of the things I do a lot of times I spent a lot of time litigating, essentially business dissolutions, often their family disputes. So I would say get your foundation Bill, you know, you don't have to do all that stuff, the day you open. But if you looks like you're going to be successful, you got to get a lot of that put in place early.

I've heard you say, at one of the mastermind retreats that we were at was you were talking about setting up an exit for a partnership right from the beginning, because it's easy to get it's easy to create a partnership. It's not so easy to pull it apart.

Well, yeah, not only that, it's every business ought to be set up with an egg with the idea that it's going to be sold, you want to have the exit in mind when you get in? How am I going to structure this so that somebody else would want to invest in it or buy it? It's just as important as how am I going to create a product or service that somebody else wants to have and will pay me enough money that I can turn a profit doing it?

So what else? Is there a couple of others simple tips, obviously, you don't want to give out a bunch of legal advice here, not knowing what's the situation people are in, or what are the some of the simple things that you know that for every single case, this is true, they just they need to be thinking smart, if they're gonna be taken advantage of opportunities in the marketplace right now.

Any of the if you're going to have a business, you want to create an entity to do it. In my view, generally, that ought to be a limited liability company and LLC. If you're doing it with someone else, you probably ought to have it taxed as a partnership, initially, a lot of that stuff can be changed, you can you know, you can fix all that later. If you decide you're going to be really big and some private equity funds as well, you need to be a Delaware corporation for us to invest fine we and fix that in two weeks. That's no big deal. But you want to get set up in a way that helps. The other one is simply make sure that your roles and goals is owners match your skill sets. Think about that for just a second. Just because you're both owners, doesn't mean that you're both good at everything. There are people who love numbers, our friend, Pam Jordan falls into that category. There are people who don't know anything about numbers, that's most of the rest of us. So why would you have me are you doing numbers, and Pam Jordan doing marketing. That's crazy. The whole idea between putting people together to business is you want to add one in one and get six. And you do that there's a great book that I would recommend for every entrepreneur to read. It's called The Big Leap by gay Hendrick s. Spectacular book. But it talks about every single one of us should work in our zone of genius. And we should hire everything else.

Agreed. Agreed. And you know, I mean, that is something to think about here. You know, we have a pretty, you know, a big sales organization and that a lot of contractors and when you're dealing with remote work, what are the things that people should be concerned about paying attention to hiring people who are working from home, possibly in another state to cover yourself legally.

There's some really interesting issues of this that you don't think about very often to hear much about yet. There are Americans with Disabilities Act issues related to even people working in their own homes. Those are, it's very counterintuitive. The idea that if you as a business owner, hire somebody to work in their own home, that you may have some responsibility for the physical conditions in their home under the Americans with Disabilities Act. It's counterintuitive. It's also very difficult to manage. You have issues of of privacy right With respect to company emails, company computers, you need to make sure that people understand anything that you do on a company computer company account, we have the right to read. And that it's, you have zero expectation of privacy, in anything you do on a company, computer company email account. But that's also something you should be teaching the employees teach, as an owner, realize, you want to make sure that your stuff, you have controls, I have actually seen a an employer had a situation where they had all their sales data in the system, they had a disaffected agent, copy it all down to a flash drive, and then delete it off their system. Wow. So you've got to maintain control of your data, control of your administrative rights. One of the easy ones really is making sure you own the web domains that you're you're going to use. You know, if your partner sets up the web domain for the business, and they put it under their name, technically, that web domain does not belong to the business. Unless and until there's a written transfer an assignment of that web domain to the business. That's a big one. Because people say, Oh, let me run out, let me Hey, I got this great idea, I'm gonna get blankety blank.com, then later me and you we're gonna set up a business on it. But unless we transfer that web domain to the business, I still own it, you don't? Yeah, there's so many.

There are so many things to think about. And being a business owner that you just, you're always learning. You know, that's why I spend my time with with people that are thinking and doing, you know, playing bigger games that makes it, I want to be around people that are always thinking that have already thought of the thing that I haven't even experienced yet. So, on that note, I want to dive I want to pivot here and talk a little bit more personal and family as men of God. And, you know, what are the things that we're doing in our business? And how do you how do you encourage What is your encouragement for men specifically, but entrepreneurs to bring be encouraged to bring God into their business to share more of what they believe as a means to doing business? But before I dive into that, I want to make sure we you know, do you have any any resources or anything that you that people can get access to that can just help them start thinking a little bit smarter legally about their business setup?

I have US Small Business Administration has some basic stuff on its website, such as I think it's sba.gov. There's a lot of basic information out there, when you talking about how do you bring God into your business carefully is the answer in one respect from the legal side. But from the personal respect for me, it's very different. I believe that, that in order for any of us to be productive and effective, and to have the influence that we want to have, we have to be congruent, we have to be the same person, at home, at work, at church at the gym, you can't have a different approach personna set of standards for your business than the ones that you have personal. And I think if you live congruent and peep, you let people know that you're a person of faith, over time, what they see is the fruit. And they will ask questions when they want to know. And if you make decisions based upon Christian principles, your religious principles, they will see that and they'll see that your decisions are the same whether you're dealing with them as employees, then as contractors, your cup, your customers, your vendors, that you're always dealing from a position of integrity, they will respect that even if they don't agree with your views or believe your views. You don't have to. But you do have to be careful from a legal perspective about you can't create a sort of a religious litmus test for working in your business. But you can have a values and standards that are part of a lot of company mission statements. You know, we value honesty, integrity, collaboration, you can state the principles. You can't say I need to be I need you to be Catholic, Protestant, Muslim, whatever, in order to work here, or I don't want you if you're not that if you know, you'd be a customer, whatever. So it's to me it's about your actions, your actions being consistent with your beliefs.

Yeah, agreed. And that that's been something that we've been in a big, a big focus transition. And we've always seen ourselves as you know, as as quick believers as Christians who are in business And then, in recent years, we've been focusing on making sure people know that we run a business, according to our biblical beliefs. And so we have people in our company that are not Christian. And we don't, we don't, you know, it's not our mission to make them you know, surrendered to Christ or believe we believe they just understand that this is who we are, this is who they're dealing with, so that they choose. And in general, Whether you believe or whatever you believe, if you're dealing with a person of faith, you're typically going to be dealing with somebody who's going to make your life a little bit easier, because they tend to do things a little bit more aboveboard. A little bit more integrity, like you said, and congruent. And most people tend to be okay with that, as long as you're not out, you know, trying to be some sort of extremist of some kind.

Well, you're not proselyting in your business, you're simply living your faith. Right? Now, you know, we have a great example in society of that being a challenge with the Chick fil A franchise, right near professed Christian beliefs. They are not open on Sundays, and you get their attack. Without any while you discriminate. No, we don't discriminate against anybody, they never bring up a point of saying they didn't serve this person because of whatever their beliefs were, or they did they discriminated against the employee. It's none of that. So, you know, I think anytime you discuss any, we're almost to the point in society, where it has become acceptable to a large part of society to attack anyone who doesn't agree with them. Are you just gonna have to be prepared for that? Yeah, I

believe that we're entering a phase of the business world, that with all the decentralization that's happening in technology, in infrastructures, I think people are going to be in more businesses or more business, they're gonna be more on an island. And so your business is really an extension of you. And so it's whether religious beliefs or anything else, you're more you can show up and really infuse the things that you want, and desire and the experience for you. And for people, it's much more about what you want, because people have a billion other choices, and they don't have to, you don't have to conform to what used to be because a lot of Main Street is rolling up his carpets, because they're, you know, the business is viable, you know. And so you have, you have the opportunity to create kind of create your own fiefdom, so to speak, as long as you do it wisely. So it's not about serving me, it still always has to be about serving them. But with your own personal spin,

we have this, there's two things that that triggers for me when I'm listening to you. And that is, we have to somehow a lot of our youth have the idea that I gotta be 18 I gotta be out of college before I can start a business. Number one that is just flat wrong. You got eight, nine year old 10 year olds who have businesses that, that obviously they get some help setting them up, but they can be very successful entrepreneurs there. We ought to be teaching our youth that the the internet and the the connectivity of the society gives you the opportunity to essentially create permanent financial independence before you're 18 years old. Oh, yes. And the other one is, technology allows a small business to compete with the big boys on a pretty much level playing field. And in fact, you have advantages because you can pivot, you can change you can you make a decision, that decision is implemented, it doesn't have to go through six layers review and four committees. So being nimble, being quick, there's so many advantages for the modern entrepreneur, check to make people understand it, and want to participate.

Amen, our oldest grandson is going to be five this summer. And we now have, but we now have four grandkids and one more coming. So we'll have five and two months. They I we absolutely have every intention of them being business owners of the fall, you know, by the time they hit high school, I mean, they're going to be, they're going to be very, very well ahead of the game at every intention. I mean, there's no reason not to be we certainly can't count on the government or society and take care of them. We need to make sure that they are well prepared and structured so that they can leverage the environments and the opportunity that around them, even when they're in school. I mean, I did it. I just didn't do it with I didn't have an organized structural business, but I was an entrepreneur when I was in fifth grade and younger.

Well, you know, and for parents and grandparents who are entrepreneurs, you want to be hiring your children. It'd be putting, you know, hiring them having an empty waste baskets, you know, shredding paper and doing stuff, because you can pay them and then you take the money and you put it in a Roth IRA for them. You know, you put 235 Whatever that you know, a couple 1000 bucks a year in a Roth IRA for 10 years. 12 years, 15 years time they're 18 years old. You can all also take that those funds and put them in alternative investments where I can't remember which guy which company it is. But he put a bunch of, of stock in a brand new company in a Roth IRA, and the company is now worth in excess of a billion dollars, that stock is worth more than a billion. And he can sell it and take it out with no tax ever.

Yeah, that's crazy. That's smart that to somebody who's who's taking the steps ahead of time, you know, we're, we're doing what we are doing right now is we're putting together an organization in LLC that we were trying to figure out the name of it right now, whether it's gonna be the grandkids, or la familia, something. But we want to start with Christmas tree lots where you get a Christmas tree lot, make some revenue, and that kicks off the grandkids fun so that it'll be something that feeds all of that will grow for all of them together, initially, until we start breaking off into single but I want them to see you know, they're gonna work anyone went sit, they're gonna help, you know, sweep, lat, low trees and cars, whatever, as they're, as they're old enough to do. But I want them to understand that they, there's opportunity everywhere, and they get to contribute to creating the outcome. To pre plan, super excited for that. So what else? What do you what do you want to share what's on your heart today, and anything you want to share this to get to make people feel a little bit more encouraged about life as I see it today?

I think it would be that you gotta get your priorities in order. If you're a person of faith, you got each relationship with your maker in order. But the other one is, I think the seeds of all happiness are sown in your your interest, your intimate relationships, your intimate relationship with your spouse or partner, get that right. If you get that, right, you can fix anything in your business, and you can still be happy doing it. I don't care how much money you make in business. If you're miserable in your intimate relationship, you are miserable, period. You know how many rich people do you know who are just depressed, angry, miserable, can't keep you know, can't stay married. And yet, there are people who live in grass huts with dirt floors who have literally nothing economically, and there's joy in their home. If you have joy in your relationship and joy in your home, your business will work itself out. Amen.

I think that's a great place to wrap this up. So I appreciate that. And I know you have recently kicked off a podcast that you want to you want to talk about that so people can find it? Well,

mine is it's called cracking the relationship code. It's on all of the standard channels. It's about specifically relationships, because what you'll find is the principles that apply in your intimate relationships. If you apply those same principles in your relationships with your children, your business relationships, your relationships, your customers, your vendors. In there, it changes your life and your perspective tremendously. I want to help people stay married because I I found a woman who's put up with me for almost 47 years and I hope to persuade her to continue that. That to me is sort of that's my passion project. Jim. I just want to help people understand that happiness is a choice. i It saddens me to see so many particularly of our young people struggling with anxieties and identity issues and mental health issues. They need hope they need it. They need some tools to help them take control of their lives to go from being victims to victors. And I want to help them do that.

Man and I hopefully you got it, you got a chance to see just a small snippet into who Stan Padgett is, and I can testify to being in his you know, in His presence been blessed to call him a mentor and a friend as a man of God and in business, but that he's got a heart for you and your family and for your success and for your growth and for you doing things well for your, for your soul, right? And so, tune in to the podcast Coaching Questions me cracking the relationship code, because you're going to hear some wisdom from a man who's got a lot of life experience, a lot of business experience a lot of great patient experience and who tremendously cares about you. So who better to speak to you about where you go into make your life better. So find it there and make sure You connect and let him know what's going on and let him know you found him here found him here on the opportunity makers podcast, where you know, this is all about you stepping up to step into opportunities to change the life of for the people around you and for yourself. And that's what opportunity makers do on a daily basis. We seek problems to become solutions so that people can find you you become that beacon, the light starts shining you become the city on the hill so that people can see you and know that safety is there, because you've got the cure for what ails them. So thanks so much for being here. Stan, I appreciate you always. And you guys go make some lives we'll make some lives better and create some opportunities and find some revenue so that your life is no longer in question. Your future is locked solid. Right we'll see you on the next episode.