Best Places to Start a Business in Colorado

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Best Places to Start a Business in Colorado

 

Colorado is scoring big with business, and it’s due to a triad of factors that lure in entrepreneurs — and that also fall trippingly from the tongue: technology, talent and tourism.

A recent report ranked the state No. 1 for the number of loans given to small businesses and for its concentration of technology businesses. The annual survey by the U.S. Chamber of Commerce also placed Colorado in the top 10 for its talent pool, business climate, infrastructure and economic performance.

In addition to technology and available talent, tourism in Colorado is a major economic driver, and one many businesses are capitalizing on. In Estes Park, for example, tourists spend about $187 million each year at local businesses. That revenue stream helped place Estes Park among NerdWallet’s top 10 places to start a business in Colorado.

NerdWallet’s analysis

We analyzed 85 places in Colorado, each with at least 500 businesses and a population of at least 5,000. We determined the overall score of each place by using data from the U.S. Census Bureau to assess a city’s business climate and economic health. See the end of this study for more details on our methodology.

Key takeaways

Making the most of the great outdoors. Skiing, hiking, rafting, fishing and other outdoor activities draw millions of tourists to Colorado’s mountain towns each year, and businesses in cities such as Vail, Aspen and Estes Park are thriving thanks to the spending power of these visitors.

Proximity to Denver is a plus. For our list, bigger isn’t always better. The largest city to crack the top 20 was Grand Junction, which has a population of almost 60,000. Denver, the most populous city we considered, came in at No. 29. But proximity to the state’s capital city can be a bonus for businesses: Two cities in the top 10, Greenwood Village and Lone Tree, are part of the Denver metropolitan area.

Best places to start a business in Colorado

1. Greenwood Village

Greenwood Village’s roughly 4,700 businesses have an average annual revenue per business of over $3.7 million, the highest of any city in this study. The business climate in the area gets a boost from the Denver Tech Center, a business campus of more than 900 acres that spans part of Greenwood Village. Red Robin, a national restaurant chain, is headquartered in the city.

2. Aspen

Artists, culinary enthusiasts and outdoor-adventure seekers flock to this Rocky Mountain town and so do the businesses that cater to them. With nearly 46.5 businesses per 100 residents, Aspen has the highest concentration of businesses among places included in this study. The majority of enterprises cater to tourists, who tend to be high earners. Nearly 60% of visitors to Aspen in summer 2014 had an annual household income of $100,000 or higher, and 35.6% of that group earned over $200,000 annually, according to the Aspen Chamber of Commerce.

3. Steamboat Springs

Steamboat Springs is home to nearly 3,500 businesses, almost 35% of which have employees on the payroll. A number of the city’s homegrown businesses have made it big, including SmartWool and Moots Cycles. The latter, a custom-bicycle manufacturer, started as a four-person operation and now employs about 25 full-time workers to make the bicycles it sells around the world.

4. Estes Park

Estes Park is a mountain town that does what mountain towns do best: attract and entertain outdoor enthusiasts. The city is a popular destination for tourists and one of the entry points for Rocky Mountain National Park, which saw over 3.4 million visitors in 2014, according to the National Park Service. Visitors to Estes Park spend $187 million annually at Estes Park’s 1,255 businesses.

5. Glenwood Springs

Glenwood Springs has held the title of “Most Fun Town in America,” bestowed annually by Rand McNally and USA Today. Each year, the city attracts over 1 million visitors, who come for rafting, fly-fishing, skiing, the hot springs and more and help make Glenwood Springs one of the best places in the state to start a business. About 2,400 businesses operate in Glenwood Springs and collectively earn over $1.46 billion annually.

6. Cañon City

Cañon City has one of the highest percentages of businesses with paid employees on this list. One reason for this: The city’s median annual income of $36,300 makes it affordable for businesses to add employees to the payroll. Although the town draws tourists for whitewater rafting on the Arkansas River and sightseeing at the Royal Gorge Bridge, the economy isn’t solely driven by tourism. Health care is a major employer in Cañon City, second only to federal and state correction centers, and the city’s business incubator space helps entrepreneurs get their ventures off the ground.

7. Durango

Durango is enjoying its slice of the boom that’s seeing technology businesses thrive in the state. Mercury, a payment-processing company, is one such success story. The Durango-based company grew to over 400 employees before selling for $1.65 billion in 2014. More than 3,800 businesses operate in Durango, drawing a total revenue of over $2.78 billion.

8. Golden

Business is booming in Golden. The city’s nearly 2,700 companies have an average revenue per business of $1,793,125, which is among the highest of the cities in this study. That figure gets a boost from MillerCoors — and the beer magnate’s Golden Brewery, also known as the Coors Brewery, is one of the “largest single-site breweries in the world,” according to the company. Enterprises such as Steelhead Composites and Outlast Technologies are headquartered in Golden, which is also home to the Colorado School of Mines.

9. Vail

Originally established as the base village for a ski resort, the mountain town still is powered by tourism. Although the community only has about 5,300 residents, Vail Resorts hosts millions of visitors each year, primarily for world-class skiing. Vail is home to annual events such as the Burton U.S. Open Snowboarding Championships and has hosted several Alpine World Ski Championships. The town is also making an effort to diversify its economy so businesses can thrive year-round.

10. Lone Tree

An educated workforce and low tax rates help make this southern Denver suburb a prime spot for businesses. Nearly 65% of residents have at least a bachelor’s degree, according to the city, and Lone Tree has a low municipal tax rate and no city property tax. The 2,000 businesses operating in Lone Tree have an average revenue per business of $1.5 million, which is among the highest of the cities we analyzed for this study.

 

Best places to start a business in Colorado

Rank City Population Number of businesses Average revenue per business Businesses with paid employees Businesses per 100 people Unemployment rate Score
1 Greenwood Village 14,223 4,731 $3,737,437 41.32% 33.26 2.8% 79.03
2 Aspen 6,657 3,090 $501,016 32.52% 46.42 4.8% 56.44
3 Steamboat Springs 12,032 3,459 $1,018,388 34.98% 28.75 4.1% 53.19
4 Estes Park 5,969 1,255 $396,916 38.88% 21.03 3.6% 51.61
5 Glenwood Springs 9,683 2,408 $610,170 35.84% 24.87 3.3% 51.32
6 Cañon City 16,433 1,186 $541,372 46.54% 7.22 3.5% 50.64
7 Durango 17,145 3,856 $723,278 37.06% 22.49 4.1% 50.32
8 Golden 19,034 2,695 $1,793,125 29.35% 14.16 4.8% 48.28
9 Vail 5,304 1,527 $720,430 33.14% 28.79 6% 47.24
10 Lone Tree 11,600 2,001 $1,526,269 26.69% 17.25 3.8% 47.17
11 Grand Junction 59,442 7,665 $963,121 39.35% 12.89 5.5% 47.17
12 Louisville 18,831 2,709 $1,313,970 28.20% 14.39 3.6% 46.62
13 Commerce City 47,239 3,018 $3,012,353 30.22% 6.39 6.8% 45.60
14 Gypsum 6,515 750 $598,303 41.73% 11.51 4.7% 45.45
15 Englewood 30,840 4,968 $1,418,362 35.06% 16.11 7.3% 44.70
16 Evergreen 9,041 1,594 $423,112 37.45% 17.63 5.8% 44.44
17 Avon 6,392 1,470 $682,046 26.73% 23 3.5% 43.73
18 Sterling 14,718 933 $918,096 47.70% 6.34 8.7% 43.62
19 Salida 5,304 1,217 $289,598 30.81% 22.94 5.1% 43.34
20 Sheridan 5,746 609 $1,170,466 47.95% 10.6 10.2% 43.29
21 Edwards 9,546 1,717 $440,296 28.19% 17.99 2.1% 43.08
22 Boulder 100,363 16,762 $990,983 28.95% 16.7 5.2% 42.85
23 Wheat Ridge 30,489 3,688 $741,822 34.57% 12.1 6.3% 41.22
24 Littleton 43,065 7,194 $1,031,352 26.34% 16.7 5.5% 41.09
25 Fort Morgan 11,381 1,049 $2,107,489 22.02% 9.22 5.3% 40.86
26 Fort Lupton 7,516 855 $995,075 26.20% 11.38 3.9% 40.32
27 Broomfield 57,171 6,284 $1,622,315 22.45% 10.99 4.7% 40.00
28 Trinidad 8,880 1,046 $433,597 32.79% 11.78 5.5% 39.88
29 Denver 619,297 67,500 $1,585,256 25.97% 10.9 6.2% 39.61
30 Cimarron Hills 15,909 1,427 $733,905 32.87% 8.97 5.1% 39.51
31 Alamosa 9,273 935 $692,021 37.97% 10.08 8.4% 38.99
32 Centennial 102,625 13,989 $969,084 24.20% 13.63 4.7% 38.82
33 Gunnison 5,890 1,076 $304,925 35.50% 18.27 8% 38.71
34 Greeley 94,194 7,116 $1,483,943 27.87% 7.55 6.7% 37.68
35 Black Forest 13,391 2,150 $142,454 28.19% 16.06 5% 37.33
36 Lakewood 144,530 14,817 $767,149 29.49% 10.25 6.2% 37.17
37 Lamar 7,874 749 $516,310 31.51% 9.51 6.5% 36.84
38 Montrose 19,036 2,921 $522,779 31.26% 15.34 7.7% 36.54
39 Woodmoor 8,880 895 $244,004 23.46% 10.08 3.2% 36.46
40 La Junta 7,106 663 $553,437 31.98% 9.33 6.6% 36.40
41 Windsor 19,263 2,533 $559,921 21.91% 13.15 3.8% 36.04
42 Rifle 9,370 1,341 $817,138 28.41% 14.31 7% 36.03
43 Fort Collins 146,822 14,921 $766,487 25.91% 10.16 5.7% 35.30
44 Loveland 68,712 7,525 $540,908 26.58% 10.95 5.9% 34.39
45 Superior 12,610 1,191 $449,690 20.07% 9.44 3.7% 34.03
46 Berthoud 5,168 1,042 $222,298 23.32% 20.16 6.3% 33.89
47 Colorado Springs 425,805 41,019 $945,155 24.50% 9.63 6.4% 33.86
48 Highlands Ranch 100,875 9,390 $720,261 18.24% 9.31 3.7% 33.70
49 Fountain 26,293 976 $1,176,163 22.95% 3.71 4.9% 33.50
50 Delta 8,843 1,224 $348,273 27.29% 13.84 7% 33.47
51 Manitou Springs 5,097 718 $128,171 20.06% 14.09 4.8% 32.93
52 Woodland Park 7,162 1,370 $229,220 28.76% 19.13 8.5% 32.84
53 Cherry Hills Village 6,126 871 $256,093 13.78% 14.22 2.7% 32.83
54 Cortez 8,496 1,259 $465,265 32.41% 14.82 9.9% 32.81
55 Pueblo 107,429 6,663 $968,151 27.42% 6.2 7.5% 32.65
56 Brighton 34,247 2,943 $820,732 23.58% 8.59 5.9% 32.41
57 Redlands 8,692 879 $196,942 17.06% 10.11 3% 32.38
58 Carbondale 6,468 1,432 $313,028 29.33% 22.14 9.5% 32.32
59 Frederick 9,110 1,022 $915,432 21.33% 11.22 6% 32.22
60 Castle Rock 49,990 4,619 $325,065 24.40% 9.24 5.3% 31.79
61 Parker 46,390 5,627 $329,410 20.79% 12.13 4.7% 31.77
62 Longmont 87,607 9,100 $568,955 22.46% 10.39 6% 31.68
63 Lafayette 25,238 3,057 $550,761 22.70% 12.11 6.7% 31.35
64 Columbine 24,995 3,254 $234,846 19.58% 13.02 4.9% 31.13
65 Arvada 108,300 11,415 $381,438 21.38% 10.54 5.4% 31.03
66 Ken Caryl 33,617 3,796 $398,696 20.84% 11.29 5.5% 30.96
67 Applewood 7,078 1,104 $364,137 14.04% 15.6 4.6% 30.94
68 Federal Heights 11,654 596 $601,607 24.83% 5.11 5.9% 30.77
69 Pueblo West 29,955 1,664 $369,128 22.78% 5.55 5% 30.48
70 Westminster 108,042 9,697 $715,416 21.64% 8.98 6.4% 30.37
71 Fruita 12,653 1,596 $210,602 15.73% 12.61 4.5% 28.79
72 Erie 18,672 2,015 $104,287 12.41% 10.79 3.1% 27.89
73 Welby 15,710 656 $641,494 30.03% 4.18 9% 27.59
74 Gunbarrel 9,325 1,575 $68,490 10.92% 16.89 4.7% 27.19
75 Aurora 332,820 23,839 $930,841 20.06% 7.16 7.6% 27.16
76 Milliken 5,699 590 $200,197 12.88% 10.35 3.5% 26.91
77 Berkley 11,721 756 $939,709 22.75% 6.45 8.9% 26.48
78 Northglenn 36,471 2,559 $372,059 23.64% 7.02 7.7% 26.30
79 The Pinery 10,642 1,211 $56,212 12.14% 11.38 3.8% 25.88
80 Orchard Mesa 6,623 770 $129,252 14.55% 11.63 5.3% 25.83
81 Thornton 121,814 8,273 $438,804 14.12% 6.79 5.8% 23.49
82 Firestone 10,517 918 $212,532 9.69% 8.73 4.4% 22.85
83 Clifton 20,944 1,361 $229,487 14.25% 6.5 8.4% 17.95
84 Security-Widefield 33,246 1,691 $177,986 9.23% 5.09 6.5% 17.08
85 Sherrelwood 19,048 1,263 $419,455 11.72% 6.63 8.8% 16.35

 

Methodology

NerdWallet analyzed 85 places in Colorado with populations of at least 5,000. Cities with fewer than 500 businesses were excluded, regardless of population. We calculated the overall score for each location using the following criteria:

Business climate, 65% of the overall score, is based on three metrics from the U.S. Census Bureau’s Survey of Business Owners.
Average revenue of businesses is 20% of the score. A higher average contributed to a higher score.
Percentage of businesses with paid employees is 25% of the score. A higher percentage contributed to a higher score.
Businesses per 100 people is 20% of the score. A higher number contributed to a higher score.

Local economic health, 35% of the overall score, is based on three metrics from the U.S. Census Bureau’s American Community Survey.
Median annual income is 10% of the score. A higher median income contributed to a higher score.
Median annual housing costs are 10% of the score. Lower median costs contributed to a higher score.
Unemployment rate for residents over 16 years old is 15% of the score. A lower rate contributed to a higher score.

 

Experts talk Colorado and business

 


Timothy Keane

Regis University


Mac Clouse

University of Denver


 

NerdWallet staff writer Kelsey Sheehy contributed to this article.

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Update: A link in earlier versions of the methodology has been changed.

 

Aspen, Colorado, image via iStock.