 Hey, John Crestani here, online marketer and tech entrepreneur. And in this lesson, I'm going to be going over what is a startup and how to create one. So, first I'll be defining what a startup is. And then I'll be going over the 5 main steps you'll need to go through from business plan, funding, selecting the right people, creating a website and getting customers that you need to start your business. So, let's get into it. First off, congratulations. You're considering starting a business which is the best way to build wealth and income and everything. See all of the big things happening in society were created by businesses that were once startups. Like where the very position you may be in or may already be in right now. So, first off, what is a startup? Let's start with that. I got this definition. A startup is a young company founded by one or more entrepreneurs in order to develop a unique product or service. Here it says it typically is done on a shoestring budget. Now, while many startups are done on a shoestring budget or many small businesses, I'd like to differentiate between the word startup and small business. Now, I live in California, right? I live in Malibu, California. You may see some palm trees and stuff blowing around me. It's kind of windy today. But basically, I look at a startup as a tech company or some sort of internet-enabled company that is getting some sort of funding. Some sort of outside funding is what I associate with a startup. Whereas I differentiate that from a small business. Where as a small business, I typically look at as being self-funded or using friends and family or other sources of funding. So, I'm going to really focus a bit more on startup being something that requires funding. And we'll be going into that in just a second here. Now, the 5 different things that you need to understand to create a startup to build one is first off, you need a business plan. Second off, you need funding. Money has to come from somewhere. Third, you need the right people around you. Fourth, you need a website, you know, a place to do business. And fifth, you need customers. And I'm going to be going over each of these items in detail of what you need to do to start your business. So, let's go into the first one, business plan. Now, here is a chart of businesses with a business plan as you see over here. And you see businesses without a business plan right here. Now, what the statistics show is when you start a business with a business plan, you're much more likely to succeed. And I really sum this up talking about goals. Setting a goal from the get-go. I'm just going to write that big and bold right here. Because when you know where you're aiming, when you have a mark, you're more likely to hit it. The problem I've seen with a lot of businesses, I teach tens of thousands of entrepreneurs just to let you know. And I help them start their own internet businesses. So, I see a lot of success and I see a lot of failure. And those who start with a plan, a clear destination of where they're going and they're working towards it, have a much better chance of success. People who are just kind of flying by the seats of their pants are much more likely to fail. Because ultimately, as the winds below, you may change direction and continually change direction. Continuous direction changes. I've seen are just catastrophic for a business because there's no plan. Again, it's much easier to reach your destination if you know what it is in the beginning. And that's why we build a business plan. Now, I'm not going to go too depth into how to write a business plan. You can Google it for more information. But I've given you a summary of what is in a business plan. And I'm also going to give you an example of a business plan that was extremely short but extremely effective. So, first off, this is recommended by the Small Business Administration which is a government entity which funds over half a billion dollars of small businesses every single year. So, if you're looking to start a business, getting a loan from the government is a really easy option. And they give out over 500 million dollars worth of loans a year to just small entrepreneurs that just have a business plan. So, first off, you need an executive summary which is essentially just a summary of what the business is going to be. Number 2 is you need a company description. Number 3 is you do market analysis. So, market analysis is actually getting into why you think you can succeed. It's getting into how many people are in the market, who the competitors are, what market share the competitors have, etc. So, you need to know what market you're in before you write a business plan. Fourth, you need a product or service you're going to be selling. Okay, whatever your product is, let's say you're selling pens. Or if it's a service, a service is you're doing maybe some sort of consulting. Fifth is you need to have a sales and marketing plan. That's a lot of what I teach on this channel. I teach a lot of different methods to do marketing. If you're looking for ways to get traffic to your website, check out my playlist free traffic methods which goes over a lot of ways. You can do marketing on social media. And sixth, you need funding. This section is where you talk about how much funding you need and you give justification for why you need X amount of dollars. And finally, you give the financial projections which should if you are writing a good business plan look like up and to the right. Like every good business plan, you have a lot of charts that are all showing up into the right. That's the little trick. Now, here's an example of a very short but effective business plan. This is from Elon Musk, the founder of Tesla Motors, the founder of Solar City, the founder of PayPal, the founder of SpaceX, multi-multi-billionaire. And this was his plan for Tesla which is an electric car company. If we have any Elon fans in the house, type in the comments, Elon fan. I'm a huge fan of Elon Musk. I think he's a really smart guy. So, his business plan was this. Build sports car. Use that money to build an affordable car. Use that money to build an even more affordable car. And then he said, while doing the above, provide zero emission electric power generation. And then at the end, he says, don't tell anyone. It's kind of a joke. But this is exactly what he did. He wrote this back in 2006. And you can see that from this, he followed through the plan to the T. Now, one of the funny things about the cars Elon built, by the way, I don't know if you've seen them. But he built the Model S. He built the Model 3. He also built the Model X car. And he has the Model Y. I don't know if you can see what that spells. But basically in Leet's speak, it spells sexy. Now, the second thing you need to start a startup is you need some sort of funding. Now, here's the top funding sources for small businesses. Just kind of ranked. You see very predominantly it's the personal savings and credit. Credit cards are a great way to fund your business. And in fact, they're the most common way people fund their business. Friends and family. Getting loans from your friends or your family members. Venture capital, angel investors, banks and crowdfunding. So, there are a lot of options. If you need money to start a business, there's a ton of different options. If you don't have friends or family that have any money, use credit cards. You don't have credit cards or savings. Use venture capitals kind of hard. So, let's just assume you don't live in LA or New York. You can hit up angel investors. They're angel investors in every country in the world. Let's say you just don't like meeting people. You can create a good business plan and go to the banks. And let's say that going to the banks doesn't work. You can pre-sell your product and I'll talk a little bit about that. And you can sell it to people before it's even made through crowdfunding. There are a lot of options available in today's economy to start a business. So, you really have no excuses. If you have a great idea that's going to add value to the world, go out there. Do it. Come on. Help people out. If you really have something to add value to the world, just do it. There's no excuses. There's all these different ways you can get the money to do it. And there's lots of good jobs available all over the world. And the most in-demand skills are actually the cheapest to learn. You know, you can learn a lot about sales and marketing on my channel. There's a lot of places you can learn about programming which is another highly in-demand skill. Just to give you an idea. Now, here's an amount of small business loans that were given out to small businesses. And as you can see, sorry, I said 500 million before. 583 billion dollars of small business loans were given out to businesses that were requesting less than a million dollars. So, even if you're just in the beginning stages and you just need a hundred thousand dollars or fifty thousand dollars or a quarter of a million dollars, you can get it. The government's giving out half a trillion dollars of just loans. Super low interest from the government. If you live in America, go America. But there's a lot of money out there. The government's given out tons of free money basically if you're starting a business. Because it's important to help the world grow. Now, as you see, over 2 trillion dollars were given out to bigger businesses that were requesting more than a million dollars. So, a lot of money is out there. You just need to start somewhere. The third step to creating a successful startup is finding the right people. Surrounding yourself with the right people or consultants or building a team or whatever. I'm a big advocate for partnerships. You know, I have a business partner in my business. And I found that finding two like-minded people that are moving in the same direction, no matter how much success either person's had, it doesn't matter about the success. What it matters is two people with a shared vision moving in the same direction together is a 1 plus 1 equals 3 situation. You can get a lot more done when you're working with good people. And we kind of see that in this chart. As we see, the majority of businesses that succeed or are funded or get acquired have between 3 to 4 people in them. And if we expand it a little further, 2 to 7 people is the sweet spot for building a team. 2 works better than 1 folks. This was PayPal. PayPal had 5 co-founders. Elon Musk, Peter Thiel, a couple other people. That's the sweet spot. So, keeping that in mind, you can certainly start a business with one person. But understanding that having more minds working together in the same direction creates a better situation for you to become successful. Now, the 4th thing you need to do is you need to build a website. Websites don't need to be complicated. Again, I have a video on my channel where I show how to build a website in 5 minutes. And I'll have my editors link to it. But it's very fast and very simple nowadays to build a website. And there's some tools I recommend. One tool I recommend to build websites super fast is ClickFunnels. And I also have a video on ClickFunnels which doesn't require any programming whatsoever. You can literally build a website and make it very advanced without any programming. So, I talk about that in my how to build a website video as well as another video which is specifically about what is ClickFunnels. Now, the 5th and last thing is you need to get customers for your business. Now, getting customers for your business should be easy if you watch my channel. As you know, all I talk about on this channel is about how to get traffic and how to get customers. That's all I focus on in this channel. If you haven't watched this before, like this video and give it a subscribe. If you'd like to see more videos on how to get traffic to your website and how to turn that traffic into customers and to paying customers. That's all I focus on. And as we see here, this is Tesla and Tesla pre-sold 276,000 customers. So, pre-selling your product is another way to actually fund your company as well. So, you could actually just pre-sell or crowd fund your product and get money for a product that you have yet to build or ship. So, that's a great option for funding and it just shows the power of marketing. You could literally get all the money you need. Everything you need. Customers, if you're good at marketing. If you can get customers, you don't need a business plan. You don't need any of the other stuff. You just get customers and you start making money or you build the product or do whatever you like. Now, there's a lot of ways to do marketing. So, here's a chart of ROI for every dollar spent. And as we see here and many of you may have heard about this, email marketing has the highest ROI, right? $40 for every dollar spent. I think this statistic, I've seen this before. I believe this is a bit of a misnomer because the issue with email is you have to build an email list in order to send emails out to people. Email is what we call warm traffic from a marketing perspective. Meaning, you already acquired the email. So, if you have an email list, messaging or email list is a great way to get customers. But if you don't have an email list, doesn't really help you. You can't really do email marketing. So, that's why I like to focus on the rest of the places what we call cold traffic. These methods are all what I call cold traffic. Meaning, you are talking to people who have never heard about you before who haven't signed up for your email list. And in order to grow a business, you're going to have to do cold traffic because nobody knows about you if you're startup. So, that's why I just don't like the email startup. People don't know about you. Now, as we see here, some of the highest ROI places are SEO, search engine optimization. I don't talk about this much on my channel because it takes so much time. And time, if you need customers, is not something you can sit around and hope for. It's also some... It's also a risk because if you spend a lot of time and money doing SEO, you may not ever rank. You know, it could be 6 months down the road and you never show up for those keywords. That being said, I do think in terms of search engine optimization, I think starting a YouTube channel is a great thing. My videos show up for a lot of keywords on Google. So, I think starting a blog or doing a YouTube channel is a good long-term method for getting customers. Now, what I advocate more is I advocate things that are faster. You don't have to worry about time as much. It's more about figuring out the marketing message which is mostly through advertising. And as we see, we get $19 from internet display advertising which is stuff such as Facebook advertising, Pinterest advertising, Snapchat advertising, etc. Google display advertising. We have mobile advertising. You know, just a little lower intent. Again, people's attention spans on their phones are pretty weak. You have keyword ads which is Google advertising at a 17 to 1 return on investment. I've been spending millions of dollars on Google for years. I've been spelling millions of dollars a year on Google. And I can plainly state that search advertising keyword-based ads are great. And they work and it's just an obvious place to start. And if you'd like to learn more about how to advertise on Google, I have a video called how to turn $50 into $500 using Google ads. And you can check that out somewhere in a bubble above my head. And last is banner ads. Still works. Again, if you return $2 for every dollar you spend, it's still not so bad. So, that's how you build a startup in a nutshell. If you have any questions about this, feel free to leave the questions in the comments below. And I'll try to answer some of them. Also, if you are excited, if you're creating a startup, let me know the name of your startup. I'd love to hear about it. Or if you are gung-ho and you say, you're gonna do it, just type in I'm gonna do it in the comments. I'd love to see who's actually going after this. Also, if you want to learn more about marketing and getting traffic to your website and taking that traffic and turning it into customers, subscribe to my channel. Check out some of my other videos. I have a lot of videos on traffic. And also feel free to join our communities. I get about 2 quadrillion messages per day. Or at least it feels that way. I've built communities for everybody to interact. And we have a Discord chat channel for people to chat. We have a subreddit forum. So, you can post up forum topics and reply to things. And we also have our own Facebook group. These are all places where you can interact with people and potentially even meet your startup co-founder, right? So, take these things seriously. And looking forward to seeing you on future videos. Talk to you soon.