How to Start a Business and Make Money Online | Tom Bilyeu for Goalcast


– This is how you build a massive online business with little to no money. I’m Tom Bilyeu for Goalcast. I co-founded the billion
dollar company Quest Nutrition, which was named by Inc.
magazine as the second fastest growing private company in America in our fourth year in business. In our first three years alone we grew by 57000% and it all started
as a small online business that we launched from
our living room floors. All right, grab something
to take notes with, because I’m gonna give
you the step-by-step instructions on how to
build an online business. Step number one, start with why. The days of building a
company on the back of a weak product perfectly marketed
are thankfully over. In the era of social media,
you’re gonna live and die by A, your product
quality, and B, what you and your product mean in the
minds of the consumers. The product quality is
gonna speak for itself. It either will work and be better than what else is on the market, or it won’t. But what you mean to your customers, that requires a mission. People need to know why
you’re selling this product, why you, what does it mean to you? Is it just about money, or
is there something more? Millennials and Gen Z are
fanatical about the intentions of the companies they
support with their dollars. One of the most important
marketing vehicles is going to be your story, your why. At Quest, for instance, our why was to end metabolic disease. That was the thing that drove
all of our decision-making. I’d grown up in a morbidly
obese family, so for me it wasn’t just about wanting
to make a lot of money, it was about wanting to
help people like my family. And that mission, that why,
not only was our North Star, it was a powerful marketing vehicle. It let our consumers connect
with us authentically, and it allowed us to tell them who we are. Because of that, they could
feel good about supporting us and recommending us to other people. The other reason that
starting with your why is so important is that you’re
going to need something other than money, I promise you, to see you through the hard times. Most entrepreneurs don’t
fail because they don’t understand business,
they fail because they don’t love what they’re
doing enough to push through the mountain of
boredom and suffering that are inevitably going to be faced as they get their company off the ground. I have a plaque that
reads, “Find something you “would die for, and live for it.” When you believe in something that much, then you’re gonna have the energy to fight through all of the hard times. Two, decide if you’re gonna
make a physical product, and I’ll include software
here, an information product, or simply market someone
else’s physical or information product as an affiliate marketer. Creating a physical
product, including software, is the most expensive
of the three and will require the most startup capital, but also usually reaps
the largest rewards. But startup capital,
which is really just a fancy way for saying the
money you’re gonna need to create the product and
get the company started, is a determining factor
for a lot of people. If you can’t afford the development or prototyping phase of a business, then you’re gonna have to
decide if you wanna raise capital or if you wanna
create a business around information or become
a reseller or affiliate marketer for someone else’s products. All are perfectly acceptable and can be strong and profitable businesses, but you need to be realistic about what fits your personality,
your desired income, and your access to capital. For the scope of this video, though, I’m just going to assume that
you wanna launch a business that you can start quickly
and with virtually no cash. To that end, most people
will end up being a reseller or becoming
an affiliate marketer, so I wanna define those two
a little bit more closely. A reseller is somebody
who buys an already made product at a discount
and sells it at a markup. Think of Amazon. They are a reseller on steroids. In the beginning they didn’t
make any of their own products. They bought products off of other people and sold them on their website. Admittedly, that’s an oversimplification, but to avoid getting bogged down I’ll leave it at that for now. The upside of being a
reseller is that you get to sell a product that
you really believe in that solves a real problem
and that the company is probably is working
hard to promote on their own in addition to your own efforts. The downside is that to get that discount you may have to buy in bulk and you almost certainly have to hold inventory. That means you’re upfronting cash. Also, you’ll have to
fulfill the orders yourself, and that can turn into a real
beast as your sales grow. An affiliate marketer, on the other hand, while it’s a lot like a reseller, you don’t have to buy and hold inventory. You simply do the
marketing and then you send people over to the
manufacturer’s sales team, either via the web or
phone or whatever means the company wants their
leads to come in to them. They do the work of
closing the sale and then they send you a commission
check on every sale that they make from the
leads that you send them. Again, I’m really
simplifying here as there are several flavors of this
including dropshipping, where the customer’s entire experience is with you from beginning to end, but all fulfillment and logistics are handled by the manufacturer. But that at least gives
you guys a couple of the different possible avenues
that you can head down, at least at a really high level. Three, solve a real problem. Whether you decide you want
to create a new product, build an app, or market
someone else’s product, make sure that a huge part of
your decision-making process is whether or not the product
you plan to create or back solves a real problem
that a lot of people have. The easiest way to sell a
product is to show people how it solves a problem that
they already know they have. Part of the reason that
Quest was so successful is that people have to eat every day, and more and more people were waking up to the fact that what they
eat massively impacts their health and overall well-being. But people also want to enjoy their food. At the time that we launched,
most people believed that food was either delicious or healthy, but definitely not both. So our job was to make food
that people could choose based on taste and it
happened to be good for them. Once we had done that, one
of the most powerful growth strategies that we had was
just giving the product away. Once people tried it
and saw that it was both healthy and delicious, then
we had a customer for life. Step four, let’s talk
about sales and marketing. Once you have the product
that you’re going to sell, now the process of no
B.S. execution begins. Remember, only execution matters. Don’t be overly precious about your ideas. Tell anyone and everyone who
will listen what you are up to. You never know who’s going
to be able to help you. As a quick primer, think
of marketing as letting people know that your products exist, what problems it solves,
and how they should feel about themselves if they use your product. We could do a whole master
class on that sentence alone, so for now I’m just
gonna leave it at that. If marketing is awareness and meaning, sales is actually getting
people to pay for the product. Before you can go too far
with sales and marketing, you need to pick a name for your company. Personally, even if I were
merely being a reseller or affiliate marketer, I
would make sure that in the marketing of that product I insert my company’s brand and personality. I would not try to be
an invisible middleman. A big part of the reason for this is that I don’t want to be beholden to just one manufacturer if I can at all avoid it. I want to represent an industry. Take Thrive Market as an example. Their why, their mission,
is to help people find the highest quality healthy foods. If one manufacturer goes away, they simply move on to someone else. Their business isn’t
beholden to any one company. So diversify just like
they do wherever you can. And when you’re picking
your name, make sure it’s something that lets people
know what you’re about. It should be broad enough
to cover the industry that you represent,
but not so generic that no one knows what you do. Thrive Market again is a great example. Their name makes sense with their mission, but it’s not something
hyper-specific like Vegan Market, which is very limiting in its scope. When choosing a name,
make sure it’s something that you can really
own, and by that I mean make sure it’s not too common. You want something that
you’ll be able to get the social handles for and that you can really own from an SEO perspective, and SEO is search engine optimization. Also, pay attention to the associations that people have with the name. Make sure it says something to people that you want it to say. When I was naming our new
company, Impact Theory, which is a media company designed to give people an empowering mindset, I originally wanted to
call it Mission House, but when we ran the name by focus groups, they all said that it made them think of a soup kitchen for homeless people, so we went back to the drawing board. Once you have your name,
step one of marketing in this day and age is social media. Five or six years ago I would’ve said that step one was your website, but now, no question about it, it’s your socials. You need to embrace that if
you’re going to sell today you must become an
effective content creator. And all of your marketing
should be value-add. When we started Quest,
our whole mantra was that the first rule of
Quest marketing was the same as the first rule of fight club. You didn’t talk about Qeust. We just wanted to create
something that was of value. What exactly you’re
selling is gonna determine which platforms you’ll focus on, but no matter what you focus on, you wanna make sure that the content in and of itself is interesting. Now, the most obvious and
universal platforms are, A, Facebook, for all the
drama around Facebook these days it is still
the 800 pound gorilla. Not only does their user
base dwarf everything else, their back-end marketing
tools will help you reach your target market with a
high degree of specificity, which means you’re gonna be able to keep your costs really low. B, Instagram, Insta is
great for establishing the look and feel of
your company and giving people that bite-size content
that they can snack on. It is super visual and super simple to use and interact with people, and they continue to
update the platform to make selling easier and easier. C, Twitter, whether it’s
dying or not is up for debate, but regardless of whether
it lasts another five years, right now it is the platform
for direct conversational contact with your potential customers. It is super real time and a
great place to see what’s on the minds of your customers
right then at that moment. It’s a great place to keep your finger on the pulse of your brand’s sentiment, and paying attention to
that is absolutely critical. D, YouTube, this is the hardest to build, but the one, in my opinion,
with the deepest impact. At Impact Theory, our
average view duration, the amount of time that
people spend watching one of our videos, is about 15 minutes. On Facebook, for the same
video, it’s around five minutes. So the same video gets
three times the amount of engagement just based
on a different platform. Let it go without saying
that to leverage social media you really have to make awesome content. Your content has to add value to people. People should want to watch
your content in and of itself, regardless of whether or not
they wanna buy your product. Masterclass, to me, if you
guys haven’t seen these ads, they’re incredible, they
are the best example of this that I have ever seen. I have never taken one of their courses, but I watch all of their trailers. Even their trailers, just
by themselves, are awesome and I feel like I’m learning something. That is value-add marketing at its finest. And it is the only kind of marketing that works in today’s world. As you’re building out your socials and developing your social strategy, you need to also get your
website up and running. Social channels are way powerful, but you’re renting your
audience from the platform. You don’t own them, and
the platform could go out of business or simply decide that nothing is free anymore,
and that is for sure the direction that
Facebook and IG are going. Your website, and especially
your mailing list, are how you’re going to build something that no one can take away from you. It’s the place where
you get to have a direct relationship with your audience. Make sure that your website
is engaging and sticky, and you do that by creating custom content that they can only get there, and make sure that you have
some amazing free content to entice people to sign
up for your newsletter. The old adage is that it takes seven touches to get a conversion. Your social channels will
do a lot of the heavy lifting for you, but you’re going to find that on social you can’t sell as hard as you can in, say, a newsletter. So for the real sales,
your website and newletter are gonna do a lot of the work for you, so make sure you focus on
making them extraordinary. People have got to want
to engage with them. When creating your website,
use a template, my friends. I cannot stress this one enough. You can customize it all you want, but unless you’re a web
developer you are going to lose an insane amount of
time making a custom website. There are so many options these days for literally buying a website off the shelf, but my advice is the
ever faithful WordPress. It makes your site super easy to create, customize, and manage. As a part of creating your
website you’re going tp want to make sure that
you have a sales funnel. This is just a fancy term
for how you take people from just finding out about
your brand and or product, all the way through to actually buying. Now oftentimes you don’t
go for the sale right away, you want to nurture your
customer by adding value for free, can’t stress
that enough, for free, and then simply making
them aware of your product offerings once they realize
what you’re all about, that you’re all about value creation, and that they can trust you. Because once they trust
you and know that you only offer things that are
of the highest quality, they are way more likely
to do business with you. Once your website is up and running, you want to wire it to
handle transactions. If you’re doing just affiliate marketing, this isn’t necessarily that important, but if you’re actually
going to do the transactions you’re gonna need to
wire yourself for e-com. And assuming that you’re
going to handle your own transactions you’re gonna
wanna use a pre-made e-com solution like Shopify that will plug directly into your website and allow you to process sales immediately. It’s really pretty
remarkable how far this has all come in just the
last five to seven years, there really are no excuses
for setting up an e-com site. It takes very little money. You can get these
solutions off the shelves. It is just absolutely amazing. So make sure that you’re
taking advantage of this stuff by using these solutions rather than trying to do everything custom. Not only is it gonna
save you time and money, but there will be plenty of
people out there that know how to use and or modify
your setup, and as you grow, that is gonna become
increasingly important. But when it’s custom,
finding people that can help you without first having to be trained on your entire system is brutal. Step five, decide if you’re going to register your company and get a tax ID. The legal and tax side of
things is the least fun, at least for me, but
it’s absolutely critical. The only way around this step is to remain a pure play affiliate marketer. And by that I mean that
you’re not handling the sales on your own website, you’re simply passing the lead off to the manufacturer and they’re closing the sale. If you do that, then you can
get away with a simple 1099. But assuming you’re
creating your own product or you’re a reseller,
then you’re going to have to register your company and get a tax ID. The good news is, just
like the e-com solutions and just like the fact
that you can get websites that are templates, these days, even the process of setting
up and incorporating your company comes with a lot of help if you’re using a service like LegalZoom. As of this recording, LegalZoom offers LLC creation packages for
less than a hundred bucks. So setting up a company
has never been easier. Now, beware, because it does vary wildly state to state and country to country, but truly, with all the help that you can get online, it has never been easier. A few Google searches
with terms like register my company or setting up a new business, we’re gonna get you started. Step six, the last thing I’ll say is, don’t let any of the
technical stuff or any of the legal stuff bog you down. The important thing is
that you get started. You can start building your
audience right now today with a simple Facebook
account and a smartphone. It really has never been easier. In fact, we started Impact
Theory just building our social channels and getting people into our newsletter mailing list. And we did that long before
we had anything to sell, but we had tens of thousands of people in our ecosystem before we ever
tried to sell something, which meant that our sales
had a lot of momentum. And momentum matters. Literally, momentum is everything. Not only do I want you to
not worry about getting bogged down in all the technical stuff, I want you to tell
everyone what you’re up to. Try to get people excited about your idea rather than worrying
about people stealing it. Ideas literally are a dime a dozen. The only thing that matters is execution. And while we are on
the topic of execution, my friends, be sure to read the book E-Myth Revisited by Michael E. Gerber. It is one of the best
books on starting and running a small business I have ever read. All right guys, I believe in you. I know you can do this. I know you can build a
successful company online. When I started my entrepreneurial journey I had no idea what I was doing. Literally none. And yet, ultimately, my partners and I build a billion dollar business. All it takes, all it takes, is the commitment to
never-ending learning. Don’t worry about being good today, just be committed to
getting great over time. And nothing, nothing,
teaches more powerfully than action and failure, so
put yourself out there with an open mind and
a willingness to learn, and on a long enough
timeline, you will succeed. This has been Tom Bilyeu for Goalcast. If you want more free
content like this or want to learn more about my
mission to build a media studio to rival Disney,
follow me everywhere at @tombilyeu or visit my
website impactheory.com. If you haven’t already, be
sure to subscribe to Goalcast, and until next time, my
friends, be legendary. Take care. (rousing orchestral music)

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