Best Businesses to Start in Colorado
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If you’re looking to start a business in Colorado, you’ll be glad to know that the state boasts an incredibly rich business climate and an educated workforce. The Centennial State serves as the headquarters for 10 Fortune 500 companies and is No. 1 in the country for its private aerospace employment concentration.
Among its list of Top 10 rankings, Colorado has shown that it’s ripe for the picking whether you’ll start a small business, relocate an existing company, or just launch into an interstate expansion. According to the Colorado Office of Economic Development and International Trade, Colorado’s accolades include:
- The concentration of high-tech workers (#3)
- High-tech performance (#4)
- Start-up activity (#4)
- STEM-based economy (#4)
- The concentration of creative class occupations (#6)
If you’re thinking about starting a business in Colorado, the odds are in your favor for success.
Why These Businesses Made Our List
When it comes to the best businesses to start in Colorado, we did our homework (so you don’t have to). In addition to analyzing various trends in the state’s economy, the ZenBusiness team went a step further and dove into the most recent national census data to sniff out the types of businesses that are currently underserved in the state.
In other words, we found a list of glaring business opportunities that are primed for entrepreneurs-in-the-making like you to jump on right now. Go forth, get inspired, and let us know if we can help you get started.
The state of Colorado’s economic climate isn’t subjective. An article from U.S. News & World Report named it best in the country for its economy. Measurements included growth, employment, and business environment, the last of which will factor into any small start-up’s considerations.
So, what makes Colorado’s business environment so favorable to entrepreneurs? From overall tax burden and disbursement of venture capital to the rate of new businesses and patents for inventions, the state has a well-balanced record of stability and potential.
What kinds of businesses work best in Colorado?
Using a big-picture perspective, you can divide Colorado into three major industry categories: advanced, lifestyle, and access-to-services.
Advanced industries ranging from bioscience, infrastructure engineering, and electronics to aerospace, energy and natural resources, and technology and information. These tech-adjacent sectors are characterized by research and design and specialized STEM workers, and they serve as the foundation for national and international innovation and competition.
Lifestyle industries in the state reflect the regional population’s education, interests, and focus on both physical and mental health. They include outdoor recreation, creative industries, tourism, and health and wellness.
Finally, a broad base of access-to-services industries supplies expertise to other businesses and consumers via intangible goods. Think financial services, food and agriculture, transportation, and logistics.
Most first-time entrepreneurs will launch companies in those last two major industries (lifestyle and access-to-services) because they tend to require less start-up capital, planning, paperwork, and employees.
You’d be in the good company starting small biz in Colorado. Small companies make up 98% of their businesses. While all states offer programs and support to help first-time businesses improve their chances, Colorado has some unique state-led initiatives to help traditionally underserved entrepreneurial populations.
These include jump-start programs and technical assistance in rural areas, such as Space to Create. This state program aims to develop affordable housing and workspaces for artists and arts organizations. It also drives state-led initiatives focused on helping minority-owned, woman-owned, and veteran-owned businesses navigate government contracting and certifications.
8 Best Businesses to Start in Colorado
Ready to dig into the best companies to start in Colorado? Here’s our research-based list of businesses that work well as startups in the Centennial State:
1. Start a Property Management Business
Taking care of real estate property and rental services on behalf of a property owner is a valuable service. But it goes far beyond fixing hot water heaters and removing pest infestations. Starting a property management business in Colorado may include negotiating leases, advising clients on the housing market, understanding finances, and decorating.
The Colorado Division of Real Estate requires property managers to have and maintain a real estate broker’s license. Be prepared to obtain this license, which includes 168 hours of education, insurance, a background check, and an exam.
2. Start a Supermarket
Beyond the usual business plan, opening an independent supermarket in Colorado requires learning about food spoilage and shrinkage, margins and markups, health regulations, refrigeration, point of sale systems and software, vendor transactions, and other industry-specific details.
In addition, Colorado grocery stores can now sell full-strength beer, creating new requirements for your location’s distance from a retail liquor store, the age of employees who can sell alcohol, alcohol delivery, and holiday sales of beer. Review the fact sheet on changes to Colorado liquor laws to make sure you’re following the rules. Get started by learning more about Colorado grocery store requirements.
3. Start a Gas Station
Because of the regulations surrounding the delivery and distribution of gasoline, starting a gas station in Colorado can be complicated. But that’s not to say that it can’t be profitable. Just be prepared to invest in legal fees, insurance, permits, and a significant amount of paperwork.
From plot plans and underground storage tank inspections to hiring tank installers and emissions evaluations, starting a gas station in Colorado means following the Colorado Office of Economic Development & International Trade regulations to the letter. But with more than 4 million licensed drivers in the state, you’ll have a solid built-in market if you go down this road.
4. Start a Convenience Store
Whether you open a unique store or franchise with one of the top chains, starting a convenience store in Colorado gets a boost from growing disposable income and strong tourism industry.
Even if you don’t sell gas, research the laws on selling items like tobacco, alcohol, lottery tickets, and vaping products. Once the licensing and regulations are hashed out, you can find a S.C.O.R.E. mentor in Colorado or other private services to help work up a business plan. Look into how to get funding for startup costs, too.
5. Start a Restaurant
Opening a restaurant at a fixed location in Colorado must follow steps outlined by the Colorado Department of Public Health & Environment. These include submitting a plan review packet with menu and food handling procedures, a floor plan, and equipment layout, an equipment list with manufacturer’s specs, mechanical diagrams, and an interior finish schedule.
If you’re a sole proprietor or individual owner, you’ll also need to show an Affidavit of Residency. Once your plans are approved, apply for a retail food license and obtain a Colorado Sales Tax License before you grill up your first steak or veggie burger.
6. Start a Pharmacy
Starting an independent pharmacy in Colorado requires licensing and permits at both state and federal levels. A good place to start is the Colorado State Board of Pharmacy. They’ll explain everything from licensing and enforcement to laws, rules, and industry best practices.
Another great resource is the National Community Pharmacists Association, which shares information on starting and operating a successful pharmacy. You’ll need significant funding, but with stabilized profit margins, you’ve got a good shot at convincing backers to come on board.
7. Start a Funeral Home
Colorado’s Funeral Home and Crematory department have a web page dedicated to registering funeral homes, offering a convenient starting point to opening a funeral home in Colorado. You’ll need to take many of the same steps you would for launching any business, including reserving your business name, choosing your business structure, and creating a website.
There are about 265 funeral homes in the Centennial State, and many become members of the Colorado Funeral Directors Association. If you’re curious about this line of business, attending a meetup or conference or even reaching out to members on LinkedIn is a great way to get ground-level intel.
8. Start a Logging Business
About 65% of Colorado forests are owned by the federal government, and the U.S. Forest Service manages about 11.3 million acres. Although logging in the state has faced challenges from wildfires, beetle damage, and objections from conservation groups, the industry has persevered. That’s thanks in part to programs that help forest health through wildfire mitigation.
The logging industry is highly regulated, so research licensing and permits. The Colorado State Forest Service has a free Forest Products Business Planning Guide for startups. If you can secure capital to fund logging equipment and have a love of the outdoors and conservation, opening a logging business is right on target.
More great businesses to start in Colorado
Not totally set on one particular type of business to start in Colorado? There are plenty of low-risk ventures to consider. The best require little startup capital or specialized training. Consider starting up a company for:
- Lawn care
- Mobile car detailing
- Event management
- Hiking tours
- Personal assistant work
- Junk removal
Are you leaning toward something in-home or vehicle services, personal care, real estate, or trades? You may consider uber-niche services, like hail damage repair, as CarInsurance.com lists Colorado as the second-worst state for hail claims. There’s also trophy animal mounting, with Colorado Public Radio noting that hunting and fishing license revenue went up almost 20% in 2019 due to a change in CPW licensing requirements.
Colorado is fertile ground for anyone comparing markets, resources, and support to start a business. Although every state offers programs to help you make your dream of self-employment a reality, progressive metropolitan areas like Denver, Boulder, and Fort Collins have prioritized funding, educational programs, mentorship, and tech infrastructure to encourage new businesses and inventions.
By streamlining paperwork and increasing access to underserved regions and populations, Colorado has positioned itself to attract and retain forward-thinking entrepreneurs.