Unfortunately, many of the resources that can help us retain, grow and recruit companies are being funneled specifically into startups. While these businesses are sexy and attention-getting, they present tremendous risk and suffer enormous failure rates.
We must ask if this strategy provides an adequate return on our investment, or whether it simply perpetuates our historic boom-bust cycle.
It’s important to look at what kind of companies thrive in Colorado and can be considered high-impact — companies that experience high revenue and employment growth. It takes much less effort to grow and retain Colorado’s existing high-impact businesses than cultivating startups or attracting companies to relocate to Colorado, for that matter.
Cultivating these high-impact firms, primarily small businesses with fewer than 20 employees, is where Colorado should spend its resources. An economy built on the productivity of high-impact companies that are employing increasingly more Colorado residents and growing revenues year after year is a sustainable economy that will do much to ensure Colorado’s prosperity into the future.
And now that the work has been done to identify what these companies need to be successful through Colorado Blueprint, let’s tailor reform efforts to benefit high-impact companies rather than getting caught up in the trend of the moment.
Why not focus on supporting existing Colorado businesses in the ways they requested through the Colorado Blueprint surveys and meetings? I’d suggest the following steps:
• Don’t give up on current initiatives for small business, but make them more impactful by marketing and delivering them in ways that appeal to Colorado’s diverse population of business owners.
• Send economic development representatives into areas where small businesses operate. Once someone takes the plunge into starting a business, time is extremely valuable.
• Make economic incentives understandable for small-business owners. If an owner needs to hire an accountant and an attorney to understand the incentive, it’s too complicated.
• The best economic incentive is simplicity. Making compliance easy to understand will decrease the fear of starting and growing a business.
Colorado needs to keep its eye on the long game and think like a business: Maximize the likelihood of success, maximize the return on investment and differentiate Colorado from the competition by making it the most business-friendly state in the nation.
Brian Smith is president of The Space Creators, a Denver-based real estate development and brokerage firm that specializes in servicing small businesses.