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Money Smart | Checklist to starting a business

Uber, Venmo and Airbnb all started during the Great Recession. Starting a business during the recession might not be such a crazy idea. Here’s 5 things to consider.

SAN ANTONIO — Uber, Venmo and Airbnb all started during the Great Recession. Starting a business during the recession might not be such a crazy idea, but here are the things to think about and plan for. 

1. Do you have steady income?

“Is there a way to start this business while you’re still employed?” said Karl Eggerss, senior wealth advisor and partner of Covenant. “Having that paycheck come in steadily, having those benefits are important. Especially, it gives you time to see if this business is going to be successful or not.”

2. Find a mentor

“A good business mentor and I don’t mean a family friend. Somebody who started a business and you’ve seen them successfully start it and maybe even sell it,” Eggerss said. 

3. Come up with a realistic financial forecast

“I often see people give me pro-forma, which is a mock income statement (that) projects over the next few years what they think the business will do,” Eggerss said. “Oftentimes, I look at those numbers and they don’t seem realistic to me.”

4. Consider a test group   

“Maybe 15 to 20 people. Primarily non-family members who aren’t going to tell you everything you want to hear. But really, get some good feedback from people that can look at your product or your service that you’re trying to sell and really poke holes in it,” Eggerss said. 

5. Expect losses

“Are you going to have the funds to keep this going for a few months or even a year? It's very important to think where you're going to get your funding from," Eggerss said. "Is it going to be your personal savings? Is it going to be from investors, which can be complicated. Or is it going to be from a bank? And really think about that."