Entrepreneurs living in Colorado are often excited about building new businesses. As many people know, however, startups can be prone to failure as their leadership navigates the pitfalls of precarious cash flow, a new client base and hiring an effective team. As a result, even talented business owners may find themselves struggling to keep their companies afloat.
Securing startup capital is a major hurdle for entrepreneurs in Colorado, even when their plans seem sound and their ideas are good. High street banks follow strict underwriting guidelines that make borrowing a challenge for entrepreneurs who cannot provide a track record. Even loans guaranteed by the Small Business Administration can be difficult to qualify for unless the applicant has collateral to put up and an excellent credit history.
Starting a company in Colorado or any other state can be a risky thing to do. However, this can be seen as a good thing as startups are generally considered to be experiments designed to push forward new ideas. Roughly half of all startups fail to make it to their fourth year, and this is partially because of poor planning on the owner's part. Business owners who start companies tend to be young, which means that they lack the experience necessary to run a successful company.
Those who own companies that operate in Colorado or anywhere else need to have a vision for their organizations. In some cases, this vision may include acquiring other companies to help it grow or otherwise meet its goals. However, it is generally not enough to simply acquire a new company and expect good things to happen. According to one study, 83% of acquisitions failed to yield positive results.
When Colorado entrepreneurs are considering launching a new vneture, they may be looking for structure options that allow them to protect themselves and prepare for future expansion. A limited liability company is one type of legal entity that is allowed in Colorado. Limited liability companies take their name from the concept that the liability of their owners is limited with respect to the company's debts and judgments. However, this business structure also allows for more flexible filing and record-keeping options.
Colorado residents who want to start their own business may not be sure about how to finance their venture. However, there are several options they can pursue.
Owning a business can become a path to autonomy, financial independence and security. The statistics reflect that there is a high mortality rate among startups, yet small businesses continue to play a significant role in driving the economy and creating new jobs. While the risk is there for Colorado entrepreneurs, so too is the reward. Often, the difference between ultimate success and failure can come down to the details of planning.
When entrepreneurs in Colorado consider the profit-making potential of their great ideas, they may be eager to leave their traditional job and start their own business instead. Many people want to find success for themselves, and the appeal of the startup life can be substantial. However, it is important to evaluate the situation and prepare in order to start off on the right foot.
Many entrepreneurs in Colorado pursue business ideas related to e-commerce. A new company called Clearbanc has developed a financing model specifically for e-commerce startups that differs from venture capital. The company provides money to qualifying applicants to support online marketing efforts that drive sales. Instead of requiring an equity stake in a developing company, Clearbanc collects fees starting at 5 percent of top-line monthly revenues until the lender recovers the cash advance.
Even in an era of venture capital and publicly traded corporations, family businesses continue to be a mainstay in Colorado. This is especially true among smaller, local businesses, but it can extend even to large privately held corporations. In many cases, multiple members of a family are involved in supporting business growth and development over the years. In addition, family members may be trained and develop into roles in the company, and the business often passes from generation to generation. A successful family business can lift up the whole family, providing education funds and other key resources.