Colorado is one of the best states to start a business in America. With a higher education rate, a dominance of the younger population, and thriving economies, it is sure one of the States to kick off your new business.
It is worthy of note that some businesses thrive the most in the State. For example, the cannabis market in the country has become one of the major contributors to its GPD. The same can be said of the mining/energy, tourism, and agriculture economies. That notwithstanding, your new business stands a chance to prosper, considering that the workforce and the business ecosystem in the State are booming.
In this article, we talk about some of the factors you need to consider before launching your startup in Colorado.
1. Start with Brainstorming a Business Idea
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What is a business if there is no idea or concept behind it? Your new business first starts as an idea before it can metamorphose into something bigger.
Here are creative ways to come up with a business idea:
Check Existing Markets
As mentioned earlier, certain businesses tend to thrive more than others in the U.S. State of Colorado. Thus, check the existing markets or businesses and see if there is a better way to improve on the existing services offered.
Choose a Business Idea that Aligns with Your Preferences
At the end of the day, you are the owner of the business. You wouldn’t be happy running a business that you don’t have any liking for. This is why the business idea or concept you are considering should fall into any of the following:
- Your natural abilities
- The interests or needs of the market segment (community) you are looking to serve.
- Your personal goals or interests
- The skills or resources you have at your disposal to start the business.
2. Conduct Market Research to Determine the Viability of the Business in Colorado
How acceptable is your new business going to be in Colorado? This is where the need to do market research comes in.
Some of the reasons for conducting the market research are:
- Evaluate your competition and come up with creative angles to promote your new business.
- Figuring out other needs that haven’t been met and see if your new business can offer the solutions.
- Segmenting the market to pick the best region or location to target with your business’ services/solutions.
- Market research also helps you to gauge demand for your business’s product or service in the desired location.
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3. Choose and Register a Business Name
What should your business or brand be called? Choose a business name and get it registered with the Colorado Secretary of State (SOS). Worthy of mentioning is that the business name registration with the SOS is important if you are looking to establish a business/company that wouldn’t be operated under the name of the owner.
Also, there are certain types of business structures that are registrable with the SOS. These are:
- Trade names
- General partnerships
- Sole proprietorship
- Limited Liability Companies (LLCs)
You can use the Name Criteria tool on the Secretary of State’s website to check if your preferred business name is available.
4. Draft Your Business Plan
Create a plan for your business by drafting a document that shows the different steps to be taken from start to establishment of the new business.
The business plan is not limited to the structure of the business. It can also serve as a blueprint or summary of your desired business structure and expectations. This will, in turn, be used when pitching to private or angel investors to commit to fundraising for the business.
The components of a business plan include:
- An executive summary is an overview of what the business intends to achieve in the State.
- A description of the service or product your business is offering to the target market.
- A marketing plan that defines the potential customers/clients for your business, and how to attract them to patronize your brand.
- An appendix – a section for attaching the links to getting important documents, such as the relevant permits and letters of reference for your business.
5. Create a Structure for Your Business
The next step is to decide and create a legally-recognized structure for your business. The most common structures are:
In this case, both you and the business are the same entity, since it is not incorporated. Instead, the profits and losses of the business go to the owner.
This business entity involves collaborating or partnering with one or more persons to pool resources to start a business.
Limited Liability Company (LLC)
This is the combination of sole proprietorship and partnership. It involves a favorable tax treatment, including the flexibility of a partnership/sole proprietorship and the personal asset coverage of a corporation.
You can also register the business as a Non-profit if you are looking to use it to further a cause. The business entity can also be registered as a corporation, meaning that its operations are manned by the shareholders.
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6. Apply for Permits and Licenses
Last but not least – apply for licenses and permits that authorize your new business to operate in Colorado. For more ideas on the types of licenses and the application forms to get, get the Colorado Business Resource Book.
The ease of doing business, abundant workforce, and flexible taxation policies are some of the factors that encourage entrepreneurs to start a new business in Colorado. With a solid idea like the one covered in this guide and great business acumen; your startup will flourish in the State.