Colorado has currently become a huge business hub. This is basically for a number of factors that lure in entrepreneurs.
A recent report by the US Chamber of Commerce showed Colorado as the No. 1 state for the number of loans given to small businesses and for its concentration of technology businesses.
In this article, we’ll be looking at the quickest and easiest ways to start a profitable business in Colorado. Follow me closely.
Meanwhile, see the table of contents here below for an overview of what to expect in this article.
Why Start a Business in Colorado?
Colorado is a good place to do business for a number of reasons.
Colorado has an available labor force that can meet a variety of business needs, with different education levels, different ages, and different levels of experience.
A recent survey by the U.S. Chamber of Commerce has placed Colorado in the top 10 states in America for its talent pool, business climate, infrastructure, and economic performance.
What are the Business Opportunities in Colorado?
Two business sectors that are doing spectacularly well are technology and financial services. The energy sector is also doing well because of the proximity to myriad natural resources in Colorado.
So you can look into these sectors and find a business around any one of them.
Is a business license required in Colorado?
The State of Colorado does not issue or require a generic general business license. Licenses are issued by various state agencies for specific types of business, activities and professions.
What are the other requirements for running a business in Colorado?
Before starting out your business in Colorado, there are certain permits and requirements you must meet. This is dependent on the kind of business you want to do anyway.
Here below is a list of some of the key requirements needed to start business in Colorado.
I’ll take some time to explain the first 3 on the list for a better understanding.
1. Colorado Tax Registration
Before you start your new business in Colorado, it is important you register for the taxes that are related to your business’s services. Examples of common forms of tax for businesses in Colorado include wage withholding tax and sales and use tax.
Depending on the services you wish to provide, the following taxes may apply to you: liquor excise tax, cigarette and tobacco tax.
You can visit Colorado’s Department of Revenue Division of Taxation site for more information on registration requirements. You can also visit the Department of Revenue’s Forms page to download the necessary electronic forms.
2.Business Licenses
In addition to your tax registration, your Colorado-based business must also acquire permits or licenses that are relevant to the nature of the services you offer.
The cost and conditions surrounding the permit or license will vary depending on what you do. Several examples of state permits and licenses include:
- Beer and Wine Licenses
- Plumbing Permits
- Bingo and Raffle Licenses
Visit the Get Licenses and Permits page of Colorado.gov for electronic forms that allow you to renew or obtain business licenses. You can also find Licenses, Permits and Registration page, which offers more general information concerning background checks and registration.
3.Local Permits
The local government in your area may require that you meet specific permits and licenses. Each municipality may have its own unique regulations. Here are some of the most common licenses and permits you may need.
- Alarm Permit
- Building Permit
- Business License and/or Tax Permit
- Health Permit
How much does it cost to start a business in Colorado?
The cost to start a Colorado limited liability company (LLC) is $50. But you may need to spend a whole lot more; up to $200 or more to completely secure the permission you need to set up your business.
Depending on the type of business you want to do, it will further cost you a lot of money to buy all the equipment and all other things that you need to set for business.
What successful businesses are in Colorado?
There are several businesses that had been built in Colorado. I’ll be listing some of them in the next few lines. Do follow me closely.
See all the big businesses in Colorado here.
How to start a business in Colorado: Step-by-Step Guide
To start a successful business in Colorado, you’ll need to follow a number of procedures. In this section, I’m going to take out some time to explain the procedure you need to start a successful business to you.
So lets quickly look at some of the ways.
Starting a business in Colorado requires these basic steps:
#1. Develop an idea
The first step of an entrepreneur very often is to start with a good idea. You’d really need to ask yourself some very important questions. You have to figure out the products that people in your location really need that are not already in the market.
It is also important to relate your business idea with whatever be your strengths. If your business idea is not something you totally believe in and can sell effectively, it will be much harder to succeed.
#2 Write a Business Plan
To start a business in Colorado, you need to write a business plan. This is one of the initial steps while planning to start your business.
A written plan for launching and operating your business is essential to your success. A well-prepared business plan starts you off on solid footing, makes you more attractive to potential lenders, helps you make sound managerial decisions, and better positions your company for growth.
Every business plan must contain an executive summary, financial plan, operational and managerial plan, and marketing strategy.
In Colorado, everyone who starts a business should have a basic understanding of accounting and income forecasting.
You need to read this: Starting A Business After College | 10 Avoidable Mistake To Look
#3 Choose a Business Type
Before choosing a business type, you should know about the main business structures in Colorado and then follow the same too. Although we will list them below, you may still consult an attorney if you do not know which business type to form.
The business types are:
a. Assumed Names/DBA
This business type is for sole proprietors or general partners who do not conduct business with the full names of each individual doing business with them. They have to file a Certificate of Assumed Name.
Similarly, any corporation, limited partnership, or LLC that conducts business under a name other than the exact legal name of the entity, must file a Certificate of Assumed Name.
b. Colorado Business Corporations
This business type is formed when two or more persons come together to form a corporation. The corporation has a general business purpose and has legal power of its own.
c. Colorado Nonprofit Corporations
Any individual who wishes to form a nonprofit corporation in Colorado must file Articles of Incorporation to include that there will be no monetary gain and no paying of dividends to the members. You may also apply for tax exemption if you are starting a nonprofit organization.
Foreign Corporations (Business, Nonprofit, Cooperative)
d. Colorado & Foreign Limited Liability Companies
LLC can be formed by two or more people. It is a business organization that combines flow-through taxation with limited liability.
This means that it is a business that enjoys a liability-shield (the owners are legally responsible for the business debts only to the amount of capital they invested) of a corporation and the flexibility and tax pass-through advantages of a partnership.
e. Foreign and Colorado Limited Liability Partnerships
For you to start this type of business in Colorado, an existing partnership will register to take part in the advantages which a limited liability company enjoys.
f. Colorado Public Benefit Corporations
A public benefit corporation is a new type of profit-making business to start in Colorado in which the business promises to provide a general or specific benefit to the society.
This benefit may not necessarily be related to the business the corporation operates. The business will submit an annual report that details how they met their public benefit.
There is no tax advantage to being a public benefit corporation, or to invest in one. There are no tax deductions to investors, and the company pays corporate tax on all profits.
Lastly, you must file for a public benefit corporation in person. It cannot be done online.
#3 Register/file your Business
You have register your startup in Colorado either by mail or in person. Before we go on to mention how to register your business, business registration does not give you a tax ID number. You have to file for this separately through the Colorado Department of Revenue( for a state tax ID).
This will be helpful: What Is A Trade Name For Business? Registration, Procedures
How to Register your Business in Colorado
Almost all businesses in Colorado must register with the Office of the Colorado Secretary of State.
Before registering your business, you must decide the structure/type of business you want to register.
Step1: Create an Online Account
Create an online account and login. Creating an online account here.
Step2: Choose a Business Structure
Go to the Business Filings Online page and click on the business structure you would like for your business.
Step3: Answer questions
Answer the questions about the non-profit status and professional status.
Step4: Verify Business Name
Verify if the name you would like your business to bear is available. To do this, just type the proposed name into the search box. You don’t need to type the entity ending (LLC, Corporation, etc) at the end, just use the drop-down menu to choose the way you would like the suffix displayed.
Take note of the following infrmation as regards names;
Step5: Upload Documents
Enter other requirements. For the documents, it is recommended you save them as a PDF and the size should be less than 2MB.
The file name must be 10 characters or less and contain no punctuation, spaces or special characters.
Again, at the bottom of the forms is a place for signatures, typing in your name satisfies this requirement.
Step6: Submission
Make sure to review the file before clicking submit. After this, you’ll receive an Order Number specific to your filing. Record the Order Number before continuing. Then click on the “Go to US Bank” button.
Once on the US Bank page you will have the option to set up an e-service account with US Bank. The US Bank e-service account will store your credit card information for future transactions.
You can by-pass the US Bank e-services registration by clicking on “pay without registering”. This allows you to process a one-time payment with your credit card.
Step7: Confirmation Stage
After payment, you will receive a confirmation page along with a payment confirmation number. Print out the confirmation page or record the Confirmation Number. You will receive an email when the filing is processed as well as an email for the payment from US Bank.
Step 8: Final Stage
You will receive an email that your file hs been processes, it contains a link where yiou can download a copy of the filing.
All filings are kept in your Transaction History for 90 days. After which it is automatically wiped. You can access the transaction history by signing into your online account which you created in step1 and clicking on Transaction History. Click on the order number on the right and it will give you an option to download the filing.
#4 Define Brand
Creating a brand builds customer loyalty. It eliminates competition in the business world.
Ensure you have a unique selling point, a strong online presence, and great advertising channels.
#5 Establish a Web Presence
Social media will create awareness for your brand that you may not get operating locally in a year. It enables you to reach your target audience faster and even cheaper.
In addition, a professional website is instrumental to the long-term success of your business, regardless of what industry you. It enables customers to find your products and services.
Consider setting up social media accounts, registering for a google profile and creating accounts on review sites like Google Reviews.
Use social media to your advantage!
Conclusion
The process of starting a business in Colorado is straightforward. And we have explained all there is to know.
The State’s Chamber of commerce will inform you of any other process if need be. Follow this link to learn of all other things that are needed for your business. Click here.
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