Your Checklist for Starting a Business in Colorado
If stunning scenery were the only criterion, starting a business in Colorado would be a no-brainer. There’s no doubt that Colorado is a beautiful state. But is opening a small business or franchise in Colorado the right move?
This article will explore Colorado and build a starting-a-business-in-Colorado checklist to help interested investors move in the right direction.
Is Colorado a Business-Friendly State?
Before even considering how to start a business in Colorado, you should ask yourself: is Colorado good for small businesses?
The answer is yes. In a survey1 by USNews.com, Colorado ranks #15 in the U.S. Some of the world’s tallest mountains draw tourists from around the world to create a robust industry that is the backbone of the state’s overall economy.
Additionally, Colorado is becoming an emerging technology hub with a substantial military presence to bolster its #3 ranking economy.
The same survey ranks Colorado’s education at #4 in the country. This category observes not only how good the school systems are but also:
- How many adults in the state have degrees
- How much debt do college graduates incur to achieve their degrees
- Overall scores the students achieve on standardized testing
Overall, the Tax Foundation has Colorado ranked 7th in the nation2 for the corporate tax climate. Currently, Colorado has a 4.4% corporate income tax rate and a 2.9% state sales tax rate, giving the business environment of the state ample opportunity to thrive.
A Guide to Starting a Business in Colorado
For an entrepreneur interested in starting a business in Colorado, here’s a handy guide for keeping on track.
Develop Your Business Idea
Before starting a business in Colorado (or any state), you need a business idea. Every flourishing business begins as an idea for a great product or service.
For example, if you want to open a fantastic Mexican-style restaurant, you could begin by searching in your area to see if one already exists. You could also consider opening a franchise for an already-thriving brand such as Café Mexicali.
Research Your Business Idea
Your next step is to check if starting your business in Colorado will be viable. Does your area support your business’s industry? Will your target audience be easily accessed in your location, or will you need to operate in a different town or suburb? Is your business unique?
Now is a fantastic time to create your business plan, a detailed document providing information about your business’s overall operations, projected revenues, expenses, and potential growth. It’ll become necessary quickly to secure funding at the right moment.
Consider your investment from every angle and determine that you have the best possible idea for starting a business in Colorado.
For example, if your area has plenty of Italian restaurants but only one Mexican-style restaurant, your Café Mexicali location will likely catch your target market’s attention.
Choose Your Business Entity
Are you opening a sole proprietorship, partnership, LLC, or other type of business? Each option provides different legal protections. The most common business filings are LLCs or Corporations because they provide individuals with legal protections for their personal assets.
Filing the Proper Paperwork
The Chamber of Commerce has a checklist3 for filing LLC paperwork in Colorado that includes registering the business name, designating an agent, filing articles of organization, and more.
You’ll also need to obtain an employer Tax ID number, especially if you plan to hire employees to staff your new business. This step sets up your business entity with the IRS and will be the start of filing proper taxes.
Is it free to start a business in Colorado? No. There are fees involved with paperwork filing4, and there will be start-up costs to launch your business, just like in any state.
How much does it cost to get a business license in Colorado? The Department of Regulatory Agencies5 has all the information you need to understand which licenses will be required for your business. The costs will vary by licensing requirements.
Set Up Finances and Banking
During the research phase of starting a business in Colorado, you’ve built a business plan, which you can now use to secure funding for your new business. This may happen in several ways. The most common are:
- Funding the business yourself through savings or investment accounts
- Securing a business loan through banks or entities like the Small Business Administration that support entrepreneurs with promising business ideas
- Partnering with investors who provide funds in return for a certain level of profits
- A combination of the above
Once financing is secured, it’s time to open the business’s bank accounts.
From Location to Launch
Next comes securing a location, obtaining permits and licensing, building out the storefront, hiring staff, creating relationships with vendors, marketing the new entity to spread the word, and launching the business.
Okay, now we’re getting somewhere. But this seems like a lot to do all by yourself, doesn’t it? Is there an easier way? Well, it turns out there is.
Starting a Business in Colorado: An Easier Alternative
Franchising is an easier option for starting a business in Colorado that doesn’t require doing all the hard work by yourself.
For example, Café Mexicali is already a registered brand in Colorado. We have multiple locations operating in the state.
We also have a loyal customer base who know quality Mexican-style food when they spot the Café Mexicali name. Getting the word out about your new business is even easier.
The training to become a Café Mexicali franchise owner is a roadmap that takes the pitfalls and guesswork out of launching a new restaurant business. We’ve been there before with our 18+ year history of opening Café Mexicali locations. We’ve smoothed out the pain points of opening and launching new restaurants.
Our leadership team has more than 65+ years of combined experience developing, operating, and launching new restaurant concepts, and we’ve learned a thing or two about bringing these businesses to life.
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