Reduce Padding Around Text in WinForms Button

You don't have to draw the whole button yourself. Just leave Text property empty and assign your text to OwnerDrawText

public class NoPaddingButton : Button
{
    private string ownerDrawText;
    public string OwnerDrawText
    {
        get { return ownerDrawText; }
        set { ownerDrawText = value; Invalidate(); }
    }

    protected override void OnPaint(PaintEventArgs e)
    {
        base.OnPaint(e);

        if (string.IsNullOrEmpty(Text) && !string.IsNullOrEmpty(ownerDrawText))
        {
            StringFormat stringFormat = new StringFormat();
            stringFormat.Alignment = StringAlignment.Center;
            stringFormat.LineAlignment = StringAlignment.Center;

            e.Graphics.DrawString(ownerDrawText, Font, new SolidBrush(ForeColor), ClientRectangle, stringFormat);
        }
    }
}

You also simply override the OnPaint() method of the Button control from which you're inheriting, and omit to call base.OnPaint(), and replace it with your own draw code.

    protected override void OnPaint(PaintEventArgs pevent)
    {
        //omit base.OnPaint completely...

        //base.OnPaint(pevent); 

        using (Pen p = new Pen(BackColor))
        {
            pevent.Graphics.FillRectangle(p.Brush, ClientRectangle);
        }

        //add code here to draw borders...

        using (Pen p = new Pen(ForeColor))
        {
            pevent.Graphics.DrawString("Hello World!", Font, p.Brush, new PointF(0, 0));
        }
    }

I have created a successful radio automation application back then in '98 using MFC. First thing we did is that we created whole new set of GUI controls for it, since for example, pressing the button on the screen with the finger obscures it, and standard buttons aren't so fancy for it.

My advice would be not to go with deriving your button from standard WinForms button, but from the Control and do the drawing yourself. If it is the simple button like one you presented, you won't have much to do, just DrawString, and if it is somewhat more complicated, you'll have complete control over it.