Few states provide a better environment for starting a business than Colorado. With the state’s economy thriving, now is a great moment to start a small business and take advantage of the state’s entrepreneur-friendly atmosphere.
A good and bold idea is always the first step in starting a business. Maybe you have already chosen an idea, or maybe you are still deciding on one. Nevertheless, make research and learn everything you can about your business idea, including in-depth industry analysis, trends, startup costs, tips, and much more.
From creating your business plan and wooing possible investors to registering your company and collecting the appropriate licenses and permissions, this guide will help you through every step of launching a business in the Centennial State.
1. Write a Business Plan
Once you establish a solid business idea, it’s time to start working on the business plan. Many people only consider writing a business plan because they may need it to get financing from a bank or an investor. There is no doubt that that’s a valid reason but more than that a detailed business can help you get a clearer picture of your company, its purpose, its goals, its operations, as well as all the necessary strategies not only to start it but also to run it successfully in the future.
Writing a business plan takes a lot of time, as well as knowledge, which can be overwhelming for new entrepreneurs. So to make the process easier, find an apt business plan template.
2. Get Business Insurance
Business insurance is rarely at the top of the list of things people think about when opening a business. Obtain small business insurance in Colorado that covers workers’ comp insurance, general liability, professional liability, as well as coverage for your vehicles, tools, and equipment, to make sure that your future company will be able to thrive even if something goes wrong. And although the only mandatory type of insurance is worker’s comp, purchasing a wider coverage can be critical to protecting your livelihood.
3. Select a Business Entity
The next step in starting a business in Colorado is to select the most suitable business or legal structure for your future company. Simply put, this refers to how a business is legally organized. The four main and most common business entities among small businesses are sole proprietorships, partnerships, corporations, and Limited Liability Companies (LLC).
4. Apply for Business Licenses and Permits
Certain licenses and permits are required to operate a business and the requirements will vary from state to state, and they may even vary from one city to another. Even though there is no general business license in the State of Colorado many cities require it to operate a business. This is why you have to conduct thorough research.
5. Get an EIN
Most businesses will need to obtain an Employer Identification Number (EIN), a nine-digit tax identification number issued by the Internal Revenue Service (IRS). This number identifies a business that operates in the US and is used to pay payroll taxes, file tax returns, and more. Filing the EIN can be done online through the IRS website, which only takes a few minutes and the number is immediately available.
6. Open a Business Bank Account
Keeping your business and personal finances is important. This is mainly because it makes it easier to track the business finances, such as income and expenses. Each bank is different but, in general, depending on your type of business, to open a business bank account, you may be asked to provide:
- EIN;
- SSN;
- Driver’s license (of the business owner);
- Certificate of business name;
- Certificate of formation;
- Certificate of good standing;
- Operating agreement.
7. Seek Financing
The size of the initial investment for starting a business varies depending on many things. And if you don’t decide to invest your own savings, you may have to seek financing. Obtaining the funds to start a small business can be a challenging process. If you are a first-time entrepreneur, you will be faced with unknown terms such as capital, assets, collateral, liabilities, and others. Nevertheless, there are various sources of financing with different rules, processes, and costs, including conventional loans by banks or other financial institutions, investors, grants, and many others.
Conclusion
Having a good business idea can change your life. If you decide to open a business in Colorado you will have to go through several steps, some of which are common in any state, and some of which are specific to Colorado. Although a few of the processes required to start a business can be challenging, if you do everything right, you can see the results in no time, once you start running your new company.
