If a person has the idea, the nerve and the cash, Colorado Springs is not a bad place to start a small business.
In fact, Colorado Springs earned an A+ in a recent survey of business owners who gave the city high marks for not having a lot of red tape.
Experts who counsel small-business owners say there has been an uptick in the number of new small businesses, especially service businesses. Enrollment in Pikes Peak Library District business classes has doubled in the past year. And the Colorado Springs Regional Business Alliance celebrated 59 small-business ribbon cuttings last year, with 12 more already on the books in 2013.
“It’s a very easy process here when it comes to getting what you need,” said Heather Rickerl, who recently opened Springs Garage Cuts, a male hair salon, with her business partner Angel Landis.
The cosmetologists were working for a large chain salon and had been toying with the idea of opening their own shop. One day after a company meeting, they walked out and said: “Let’s do it.”
That was June. In two months they found a location, got the proper licenses, remodeled the 850-square-foot shop at 23 E. Kiowa St. and opened for business. It’s a sweet spot to cater to the downtown businessmen, Rickerl said.
“I was excited and nervous,” she said. “And six months later, I’m still excited and nervous. I’ve got a mortgage and a car payment and I’ve always made a pretty good income. But, we thought if we don’t do it, we won’t find out if we can.”
Starting a small business in the Springs might be hassle-free as far as the regulations go, but it still is risky, experts say, and careful planning is the key to survival.
The way Colorado Springs Small Business Development Center consultant Steve Inke sees it, there are five things an enterprising small business owner needs to be successful: access to capital, business acumen, energy, industry knowledge — and a great idea.
“People are starting more service-based businesses,” he said. “They are less capital-intensive and require fewer regulatory hurdles.”
Inke cannot be sure if there is more or less red tape in Colorado Springs than in other cities, he said. Instead, he credits information as the key to small-business startup success. There are a number of organizations, from SCORE to the SBDC to the Colorado Springs Technology Incubator, all with the express goal of providing information to those who want to take the plunge into small-business startup.
“We have an immense amount of information through tools that makes it better to do requisite research to be better in the business endeavor,” Inke said. “I think the principal reason we are more business-friendly in Colorado Springs is the access to information that is provided to us from the Pikes Peak Library District.”
One hour with PPLD business services librarian Terry Zarsky will either scare the bejesus out of would-be business owners or prepare them for the risk they are about to take.
Zarsky’s mantra is clear: “Businesses don’t plan to fail; they fail to plan.”
Prospective entrepreneurs who research their competition and the market have a better chance of survival, she said.
“Some people find out they don’t have the best idea — that maybe the market is oversaturated,” Zarsky said. “They find out there are already five businesses doing the same thing and that people are not spending more than the national average on the product or service.”
The library has a database, called Business Decision, which can run up to 29 reports on such things as market segment profiles, census information, disposable income and retail expenditures. Similar reports from market research companies can cost from $125 to thousands, she said.
Those reports can tell an aspiring business owner how much money people in a census tract spend on VCR and DVD players — important if your business idea is an electronics store, she said.
“This is a gold mine,” Zarsky said. “No business should operate without this information.”
After the research and close study of the numbers and demographics, you’re either in or out, said Casey Bentzel, who opened Karma Therapeutics, a business that specializes in deep-tissue and couples massage, with business partner Megan Moriarty in November.
“While I was in (IntelliTec Medical Institute) I learned Colorado Springs is overflowing with massage therapists — there are four schools that teach it,” Bentzel said. “But we were also told that massage therapy is very personal and once a person finds someone they love, they stick with them.”
Bentzel and Moriarty felt confident that once clients tried their services, they would come back.
“By the end of December, our schedules were already completely full,” Bentzel said. “We decided we needed to bring in an additional therapist.”
In April, Karma Therapeutics will move to a new location, 6770 Foxtrot Lane at Woodmen and Black Forest roads on the city’s northeast edge, which more than doubles their current space and includes a yoga studio.
“Initially, I really didn’t expect to be as busy as we are,” Bentzel said. “I was awed by it all. The move is going to be a great thing in our ability to offer more services.”
Do you have the money for startup and initial operating expenses?
Have you decided on a legal structure? Have you picked a name and registered the business with the city, state and or federal agencies?
Are you aware of the personal and business tax implications?
Have you defined the products or services you will provide? Is there a need for what you will provide in today’s marketplace?
Have you developed a financial plan, including profit and loss projections? Have you developed a sound business plan, with goals and objectives?
If you have employees, you must open federal, state, and local wage withholding and payroll tax accounts.
If your business will be selling, renting or leasing tangible personal property, you must obtain the proper state sales tax license from the Department of Revenue and determine if a separate local sales tax license is required.