Do you have an idea for a business and want to know how to make your idea a reality? Here are several key steps to start a business.
Determine the Appropriate Legal Structure
This is truly the first step to making a business official. The legal structure of a business determines the following:
- The amount of personal and financial risk to the owner(s)
- Who owns a controlling stake in the business
- How the business will be financed
- How the taxes will be paid
There are several good resources to assisting with making this decision:
- Colorado Business Resource Book, opens a new window - This amazing book provides information on how to set up a business, including the pros and cons of each legal structure, so I highly recommend reviewing this first: Legal Structure & Registration, opens a new window.
- For a more in-depth guide, I recommend this book: The Small Business Start-up Kit
Registering with the Colorado Secretary of State
After selecting the appropriate legal structure and the name of your business, check out MyBizColorado, opens a new window. This fabulous site guides you through the following steps with accompanying tutorials.
- Register your business with the Colorado Secretary of State
- Get a sales tax license and a wage withholding account from the Colorado Department of Revenue
- Get an employer’s unemployment account from the Colorado Department of Labor and Employment
Getting a Federal Employer Identification Number
This step is only necessary if you will hire employees, so if your business is a sole proprietor with no employees, skip ahead to the next step.
To get a Federal Employer Identification Number (FEIN):
- Apply online at irs.gov, opens a new window
- File a completed form SS-4, opens a new window with the IRS
Making and Selling Food
If you plan to make and sell food, there are additional steps. For food that doesn't require refrigeration, it may qualify for the Cottage Food Act, opens a new window and I recommend reviewing the Cottage Foods Checklist, opens a new window.
If you make food that requires refrigeration, there are additional steps that will vary depending on the county or counties your plan to sell in. Here are pages with resources for the nearby counties:
- Arapahoe County: Owning or Operating a Retail Food Business
- Denver County: Retail Food Mobile License for a Food Truck or Food Cart, opens a new window
- Jefferson County: Retail Food Regulations & Enforcement Process, opens a new window