Besides hosting the largest startup event in the US, Colorado’s startup scene is very welcoming, especially for tech industry ventures. In 2015, Colorado ranked 4th in the nation in real GDP growth. Employment growth in Colorado ranked 8th nationally in September 2016. Colorado has the 8th lowest unemployment rate in the nation at 3.6%. As of 2016, there were 2,891.5 thousand people in the Colorado labor force.
The economy of Colorado is ranked 20th largest in the United States in 2008. According to The Bureau of Economic Analysis, the gross state product estimates for 2008 was $248.6 billion. Colorado‘s per capita personal income in 2003 was $34,561, putting Colorado 8th in the nation
97.6% of businesses in Colorado are small businesses. Colorado small businesses employ 1 million people. Colorado approved $826.7 million worth of SBA loans in 2016. (Colorado SBDC) 97.6% of businesses in Colorado are small businesses, with over 572,546 in total. (SBA) Most small firms in Colorado are in the professional, scientific, and technical services industries. (SBA)
In 2016, 129 Colorado tech companies raised over $780 million in funding. (Built In Colorado) Colorado’s startup growth is at a rate of 74.1% as of 2017. Colorado is ranked 5th best state for startup activity. The city of Denver has 713 startups, making up 8.2% of center city businesses. In 2016, over $514 million in VC funding was raised by Denver-based startups. (Downtown Denver Partnership)
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The most common business structures are sole proprietorship, partnership, limited liability company (LLC), and a few different types of corporations—the standard corporation (often called a C corporation or “C corp”), the small business corporation (often called an S corporation or “S corp”), and the benefit corporation (often called a B corporation or “B corp”).
The most common business structures are:
Happens when you operate your business as yourself. There is no separate legal entity created; the law treats you and your business as one person. You are responsible and personally liable for all business activities or wrongdoing.
The same thing as a Sole Proprietorship, but just with 2 or more people. Like a Sole Proprietorship, a Partnership doesn’t create a separate legal entity and the partners are responsible and personally liable for any business activity or wrongdoing.
A more complex legal structure that requires a board of directors, corporate officers, and shareholders. Corporations don’t usually work for most small business owners since they face double taxation. Corporations can be beneficial to companies that are looking to raise capital investment, take the company public, or have large healthcare expenses for their employees. The most common types of companies that form Corporations are high-growth technology and startup companies.
Unlike a Sole Proprietorship or a Partnership, a Corporation is a separate legal entity from its owners (called shareholders). It provides them with personal liability protection.
A legal entity that combines the benefits of a Corporation and a Sole Proprietorship/Partnership.
An LLC in Colorado is a separate legal entity under the law. And like a Corporation, it provides personal liability protection for the owners. If the LLC is sued, the owner’s personal assets – like their home, cars, and bank accounts – are protected. And like a Sole Proprietorship/Partnership, an LLC has pass-through taxation (so there’s no double taxation).
A Colorado LLC is the most popular option and a good choice for people who want to run a small business for two reasons:
Unlike a Sole Proprietorship (and a Partnership), your Colorado LLC’s assets are separate and distinct from your personal assets. In the event your LLC gets sued, your personal assets are protected.
And unlike a Corporation, your LLC is not subject to double taxation. Instead, your LLC’s profits will “pass-through” to your personal tax return and federal taxes are paid just once.
Choosing a business name is important, you want to make it easier for your customers to remember it, here are some tips:
Depending on the business structure you chose you will need to register your business.
With limited exceptions, most businesses require an Employer Identification Number (EIN), also known as a Tax ID Number. An EIN is used to identify a business in its federal tax filings. Without an EIN, you can’t hire employees or open a business bank account.
– Open a business bank account:
– Get a business credit card:
Now that you’ve registered your business name you need to obtain a business license for your company – this authorizes your company to do business in your city or county. Typically this also involves registering for state taxes and permits (the city may require them as part of the business licensing process).
Here are some links for Colorado Businesses:
Selling products? Check Colorado Resale Permit
Your brand is the image customers have of your business, so it’s important to determine who is your audience and what is the message that you want to project. That way, your company’s image will be what you intend it to be. It should be strategic and intentional.
Creating an optimized website helps you to gain important visibility for the right terms. A website is a powerful sales tool and one that allows you to address your customers’ concerns, give them the information they need to make a decision and create compelling calls to action.
In addition to a website, you should also consider other avenues for promoting your business online: