The Cost of Keeping the Doors Open

From the October 2026 issue of The Colorado Conservative.

What Colorado asks of the people who take the risk of starting a business.

The customers have gone home. The paperwork hasn't.

For a small-business owner, closing time can mean switching jobs. The person who spent the day repairing equipment, preparing meals, or helping customers becomes the bookkeeper, scheduler, and compliance department.

An invoice needs attention. Payroll is coming. A supplier has changed its prices. An insurance renewal is waiting to be opened. Before the evening is over, someone has to work out whether the week's sales left enough to cover the week's promises.

From the sidewalk, a busy business looks successful. From the owner's desk, success depends on what remains after the bills.

Colorado's small-business story lives in that difference.

The U.S. Small Business Administration's 2025 profile counted 730,887 small businesses in Colorado, including businesses without employees. Small businesses employed approximately 1.2 million people, representing 48.6 percent of the employment measured in the profile. Its broad definition includes firms with fewer than 500 employees, not just the familiar shop on the corner. [1]

Behind those figures are people who put money, time, and reputation into an idea. A sensible business climate gives them a fair opportunity to make it work. Colorado needs to examine where its own decisions have made that opportunity harder to secure.

The Bills Arrive Before the Customers

Starting a business is an act of optimism accompanied by a stack of obligations.

A storefront may need a deposit, equipment, inventory, insurance, and improvements before it can open. A service business may need tools, a vehicle, software, and enough cash to buy materials while waiting for customers to pay.

Some owners put savings into the venture. Some borrow. Some sign personal guarantees that can put their own finances at risk if the business fails. The particular risks depend on the contracts they accept, but the pressure begins well before the first profitable month.

Forming a Colorado LLC is relatively straightforward: the Secretary of State's published schedule lists a $50 filing fee and a $25 periodic-report fee. Those charges alone are not a persuasive explanation for why operating here can be difficult. [2]

The larger challenge begins after the paperwork establishes the company.

Depending on the location and industry, the owner may need additional licenses, permits, inspections, and tax accounts. The Department of Revenue specifically warns new businesses that home-rule cities may have additional licensing requirements. [3]

A delay at that stage can mean paying rent on a space that cannot yet produce revenue. A requirement discovered after a lease is signed can change the opening budget.

Clear instructions, coordinated reviews, and predictable timelines have real value. They let someone calculate the risk before committing the money. Uncertainty leaves the owner paying to find out.

A Sale is Not a Paycheck

Consider an illustrative $1,000 job.

Suppose materials cost $450 and direct labor costs $250. That leaves $300 to help pay for the vehicle, insurance, office expenses, bookkeeping, tools, financing, and other overhead. Only after the remaining expenses are covered does profit emerge.

Now suppose those materials rise to $500 while the agreed price stays the same. The amount available for overhead and profit falls from $300 to $250.

The customer sees a $1,000 invoice. The owner sees a $50 loss of breathing room.

For retailers and restaurants, the same problem appears in the cost of goods sold: what it costs to acquire or produce what they sell. For contractors, it may arrive as a higher price for wire, lumber, hardware, or equipment. The exact accounting differs by business, but the practical question is familiar: how much does the sale leave behind?

An increase that sounds modest can have a substantial effect on a narrow margin.

Imagine a business spending $300,000 annually on goods or materials. An 8 percent increase adds $24,000 to its costs. If it previously earned $50,000 in annual operating profit, and nothing else changes, that increase would reduce the profit to $26,000. This is an illustration, not an estimate of the average Colorado business.

Raising prices may recover some of the difference. It may also send customers elsewhere. Buying cheaper supplies can affect quality.

Delaying an equipment purchase may increase repair costs later.

These are ordinary business risks. National inflation, financing conditions, shipping costs,

and supplier decisions are part of the picture. Colorado lawmakers cannot control all of them.

They can control whether state policy adds another avoidable expense to the same invoice.

What an Employee Actually Costs

Employees are central to the business, and they face the same expensive housing and groceries as everyone else. An owner needs capable people; capable people need compensation that makes the job worthwhile. That shared interest does not eliminate the arithmetic.

For an illustrative employee earning $20 an hour for 2,080 paid hours, annual wages are $41,600. The employer's standard Social Security and Medicare contributions add $3,182.40, bringing that portion of the cost to $44,782.40 before unemployment insurance, workers' compensation, benefits, or other expenses. Those payroll taxes are federal, not a Colorado invention. [4]

Colorado then adds its own requirements.

The statewide minimum wage rose from $14.81 in 2025 to $15.16 in 2026. Denver's minimum rose from $18.81 to $19.29. Other jurisdictions have their own rates, and tipped-work rules differ. [5]

For five non-tipped employees each paid at the statewide minimum for 2,080 hours, the 35-cent increase adds $3,640 in annual wages. Standard employer Social Security and Medicare contributions on that increase add about $278. That is roughly $3,918 in additional annual cost before other wage-linked expenses.

The employees receive a meaningful increase. The business still needs the sales to fund it.

The policy origins matter. Voters approved the state's minimum-wage increases and subsequent inflation adjustments through Amendment 70 in 2016. The legislature later authorized local minimum wages through House Bill 19-1210. These are different decisions made through different routes. [6]

An employer operating across city boundaries may therefore have to track more than one wage standard.

Paid leave introduces another set of obligations. The legislature's Healthy Families and Workplaces Act requires accrued paid sick leave at a rate of at least one hour per 30 hours worked, up to 48 hours annually. [7]

Helping an employee stay home when sick can protect coworkers and customers. A small operation must also arrange coverage, track accrual, and account for paid time when work is not being performed.

FAMLI, the separate voter-approved family and medical leave insurance program, began premium collection in 2023. Its combined 2026 premium is 0.88 percent of covered wages, generally split into 0.44 percent employer and employee shares. Employers with fewer than ten employees are generally exempt from the employer share but still have reporting and remittance responsibilities. Approved private plans have separate arrangements. [8]

The program provides benefits during important family and medical circumstances. For employers subject to the state-plan employer share, $500,000 in covered wages would mean $2,200 annually in employer premiums. Leave can also create scheduling and coverage challenges beyond the premium itself.

It would be inaccurate to charge every small business the full combined premium in an illustration. It would be equally incomplete to ignore the administrative work required of exempt small employers.

The difficult conversation is about the combined cost of employing people, how benefits are financed, and whether the rules can work more simply for a small operation.

The Expense Hidden in an Evening

Some costs are visible on a receipt. Others consume the owner's time.

Colorado's retail delivery fee began in 2022. The combined rate is 31 cents for July 2026 through June 2027 on qualifying deliveries. Qualified businesses with $500,000 or less in prior-year Colorado retail sales are generally exempt, with additional rules for new businesses and other circumstances. [9]

For a business that must remit it, the task extends beyond the amount charged: determining applicability, configuring billing, and reporting correctly. Eligible retailers may also choose to pay the fee themselves instead of separately collecting it from customers. [10]

Sales tax presents another layer. Money collected from a customer for sales tax belongs to the relevant government; it is not business profit. But the work of calculating, collecting, and remitting it falls on the seller.

Colorado has made progress with its Sales and Use Tax System. The Department of Revenue reported in September 2026 that more than 90 percent of home-rule jurisdictions participate. The system offers a consolidated filing route, although businesses still need to understand the applicable tax rules and licensing requirements. [11]

That is the kind of improvement worth building on.

A large company can distribute compliance work among specialists. In a small business, an additional obligation may mean another accounting bill or another evening at the desk.

The hidden expense is what the owner could have done with that time: prepare a bid, train an employee, contact a customer, or finally go home.

What happened to Colorado's business reputation?

Colorado once ranked near the top of CNBC's business comparisons. In 2016, it placed third overall. By 2026, it ranked 25th, down from 11th in 2025. [12]

That is a serious decline. It does not put Colorado at the bottom overall, and it cannot honestly be attributed to regulation alone.

The Colorado Chamber's account of the 2026 rankings identifies an infrastructure decline to 32nd and a cost-of-living rank of 49th. Technology and innovation remained a strength at sixth. Broad rankings measure several things, and their methods and category weights can change between years. [13]

For an owner, the distinction matters. Colorado can retain strong technological capabilities while becoming a difficult place to afford employees, premises, and expansion.

There is separate evidence of regulatory complexity. A Chamber-commissioned StratACUMEN update placed Colorado sixth for state-level business restrictions in 2025, reporting more than 205,000 restrictions and a

2.4 percent increase from the prior year. The report counts restrictive provisions in regulatory language; it does not mean every business must comply with 205,000 separate rules. [14]

That count is a warning about complexity, not proof that every provision is unnecessary.

The Chamber's 2025 survey provides another view. Among 169 business leaders interviewed in late 2024, 70 percent identified state regulatory burdens among their three greatest challenges. Seventy-one percent said regulations had negatively affected their company, and 51 percent said they had prevented additional hiring or job growth. These are survey respondents' assessments, not a direct measurement of statewide job losses. [15]

Taken together, these findings justify a thorough review of Colorado's rules. The most useful question is which requirements deliver enough benefit to warrant their expense, and which can be revised or removed.

When the next investment goes elsewhere

A business does not have to leave entirely for Colorado to lose an opportunity.

The next location can open in another state. A production line can be added somewhere else. An owner can keep serving existing customers here while directing future growth elsewhere.

The Colorado Chamber Foundation's 2025 tracker documented 98 relocations or lost opportunities to other states since 2019, including 27 in 2025. It associated more than 13,600 jobs with those decisions where figures were available. The compilation mixes headquarters moves, closures, reduced operations, and forgone investments; it is neither a count of 98 small-business departures nor a net migration balance. Some employment figures concern planned opportunities rather than existing positions transferred. [16]

Reasons also differ. The tracker describes acquisitions and reorganizations alongside company decisions linked to regulations, labor availability, and business conditions.

It records Koelbel and Company's plans to expand outside Colorado while citing development regulations. A more longstanding example is Magpul, which announced its move to Wyoming and Texas in 2014 after Colorado enacted firearm restrictions affecting its core products. A company representative explicitly connected the move to those laws. [17]

Those examples establish that government policy can influence location decisions. They do not explain every departure.

There is also continuing business creation. The SBA's 2025 profile reported a net increase of 1,189 Colorado establishments between March 2023 and March 2024. Those figures include temporary closures and reopenings, and they cover a different period and population from the relocation tracker. [1]

The problem is not that entrepreneurship has disappeared. It is that Colorado has reasons to ask whether more of it could succeed here.

Making the next business easier to build

An owner considering a second location has to compare the investment with the risk. Predictable rules and manageable costs can make that decision easier.

Colorado can offer more of both.

A practical review would start with overlapping reports, conflicting definitions, unnecessary fees, and approval processes that make applicants wait without clear deadlines. Agencies could provide coordinated guidance and a reliable opportunity to correct good-faith errors, while preserving enforcement against fraud and deliberate harm.

Lawmakers could require proposed regulations to show their likely cost to a small employer, including outside assistance and staff time. Existing requirements could be reviewed against measurable outcomes. A rule that has outlived its purpose should be eligible for repeal.

The review should also examine cost thresholds that complicate growth and whether simpler administration could preserve a program's benefits with less work.

Colorado has already taken a step toward greater scrutiny. Senate Bill 25-306 required performance audits of the Air Pollution Control Division and the Division of Unemployment Insurance. Audits will be useful if their findings lead to specific improvements. [18]

Candidates asking for a business owner's vote can explain what they would do with that information. Which charge would they remove? Which process would they shorten? Which rule would they revise, and how would they preserve its useful protections?

Those answers are more valuable than another general promise to support small business.

After closing time, an owner still has an invoice to chase and a schedule to finish. Running a business will always demand effort, judgment, and some willingness to risk failure.

But the extra hours should have a reasonable chance of producing something: a stronger company, better pay, another employee, a future the owner can plan around.

Sources and editorial notes

Colorado can improve that chance by removing obstacles it has put in the way.

The result would be visible well beyond a business-ranking table. It would show up in a new sign on an empty storefront, an apprentice's first paycheck, or an owner who can finally finish the paperwork and turn off the light.

1. SBA Office of Advocacy, Colorado 2025 Small Business Profile. https://advocacy.sba.gov/wp-content/uploads/2025/06/Colorado_2025-State-Profile.pdf

2. Colorado Secretary of State, Business Organizations Fee Schedule. https://www.sos.state.co.us/pubs/info_center/fees/business.html

3. Colorado Department of Revenue, Getting Your Business Started with Colorado Taxes. https://tax.colorado.gov/new-businesses

4. IRS, Topic 751 Social Security and Medicare Withholding Rates. https://www.irs.gov/taxtopics/tc751

5. Colorado Department of Labor and Employment, Colorado Workers' Rights 2026. https://cdle.colorado.gov/sites/cdle/files/knowledge_%231_colorado_workers%27_rights_2026%29_2.23.26.pdf ; annual wage table: https://cdle.colorado.gov/dlss

6. Colorado Secretary of State, Amendment 70 historical election record: https://historicalelectiondata.coloradosos.gov/contest/4438 ; General Assembly, HB19-1210 as enacted: https://leg.colorado.gov/bills/hb19-1210

7. General Assembly, SB20-205 as enacted: https://www.leg.colorado.gov/bills/SB20-205 ; CDLE wage and hour guidance: https://cdle.colorado.gov/dlss/labor-laws-by-topic/wage-and-hour-laws-including-paid-sick-leave

8. Colorado FAMLI employer guidance: https://famli.colorado.gov/employers ; voter-approved origin and collection dates: https://famli.colorado.gov/resources/famli-marketing-kit

9. Colorado Department of Revenue, delivery-fee rates and exemption guidance: https://tax.colorado.gov/retail-delivery-fee-rates ; https://tax.colorado.gov/retail-delivery-fee-retailers

10. Colorado Department of Revenue, Retail Delivery Fee Collection and Retailer Election. https://tax.colorado.gov/retail-delivery-fee-collection-and-retailer-election

11. Colorado Department of Revenue, September 25, 2026 SUTS update and new-business guidance. https://tax.colorado.gov/Bulk-Address-Lookup-Pause ; https://tax.colorado.gov/new-businesses

12. 2016 ranking: The Business Times, July 13, 2016, https://thebusinesstimes.com/colorado-third-in-ranking-of-top-states-for-business/ ; 2026 ranking: Colorado Chamber, July 15, 2026, https://cochamber.com/2026/07/15/colorado-chamber-continues-work-to-improve-competitiveness-following-drop-in-cnbc-rankings/

13. Colorado Chamber account of CNBC 2026 results, same July 15, 2026 release above. CNBC's own linked Colorado page was unavailable during research; ranking attribution is retained.

14. StratACUMEN for the Colorado Chamber, Colorado Regulatory Landscape 2025 Update. https://cochamber.com/wp-content/uploads/2025-CO-Reg-Update.pdf

15. Colorado Chamber, 2025 Business Survey, sample of 169 leaders interviewed November 25–December 17, 2024. https://cochamber.com/2025/02/13/colorado-chamber-2025-business-survey-employers-united-in-need-for-regulatory-reform/

16. Colorado Chamber Foundation, 2025 Relocations Tracker, and April 6, 2026 release. https://cochamber.com/wp-content/uploads/2025-Relocations-Tracker.pdf ; https://cochamber.com/2026/04/06/new-report-tracks-colorado-company-relocations-lost-opportunities-to-other-states/

17. Koelbel example: tracker above. Magpul: KUT, January 3, 2014, reporting the company representative's stated reason: https://www.kut.org/texas/2014-01-03/firearm-parts-maker-packing-up-in-colorado-moving-to-texas ; Wyoming Governor's January 2, 2014 release confirms locations: https://content.govdelivery.com/accounts/WYGOV/bulletins/9c7091

18. Colorado General Assembly, SB25-306 as enacted. https://leg.colorado.gov/bills/SB25-306

This is a reported explanatory article, not an interview or biography of a named business owner. Everyday scenes are general narrative framing. Job-cost, goods-cost, wage, and premium calculations are explicitly illustrative and do not estimate an average firm's finances. Regulations and public programs can have benefits as well as costs; the article's recommendations are editorial analysis. Historical statistics, survey perceptions, modeled regulatory measures, and relocation compilations are kept distinct.