Entrepreneurship is at the heart of capitalism, and Colorado is at the heart of entrepreneurship. Or at least, that is what a recent report published by the Kauffman Foundation suggests. According to the report since last year the state of Colorado has climbed to the fifth-most entrepreneurial state in the nation with a rate of new business creation of 0.38 percent. This is a surprising trend considering the overall decline in the creation of new businesses nationally.
While the national news concerning new business formation is much more gloomy, with a slight decline in the number of adults opening new business practices, Colorado is looking much brighter. In fact, the state has risen from the number 12 spot in business formation in 2012 to number five in 2013. The only states to beat out Colorado were Montana, Alaska, California and South Dakota. According to the report nearly 380 Coloradans started business last year for every 100,000 residents in the state.
Unfortunately, while the growth in new business practices in Colorado is certainly a great sign for the state the report not only noted that not only is the overall national trend on the decline, but that this is also the second year in a row the U.S. has seen a decrease in the rate of new business creation. In fact in 2013 the rate of new business creation was around 0.28 percent, while in 2012 the rate was 0.30 percent. Similarly in 2011 the rate of creation was slightly higher, with a rate of 0.32 percent.
While the entrepreneur will always be at the heart of innovation, there is more to starting a business than a new product or service. In fact, from the minute an entrepreneur decides to create a new business there are a host of important legal issues that must be addressed. From choosing the type of business formation to drafting the partnership agreement, getting things right in the beginning is about more than creativity, it is also about a strong legal foundation.
Source: Denver Business Journal, "Entrepreneurial activity increases in Colorado," April 11, 2014