A lot of people come up with good ideas and would like to try their hand at creating a startup – then never take it further. With the recent growth of Denver in the tech sector, don’t back down for fear of risks or technicalities only a business lawyer or accountant could understand. The process can range from simple to complicated, depending on your vision. Instead, base your decision on sound planning and evaluation.
The Denver tech scene has been rising over the years, and this culminated in a top 10 ranking in the 2018 CBRE Scoring Tech Talent report. Available talent and wage growth scores are good indicators of a strong labor pipeline. And the Colorado community for tech entrepreneurs provides a high degree of networking and support. This helps newer companies to flourish even as longer-running small businesses expand their operations and move out of state.
Even if your business idea isn’t in the tech area, all startups nowadays are integrated to some extent with online platforms. E-commerce, social media, and a killer website are all vital aspects of business operations and stand to benefit from the tech talent pool.
Find what makes you special
Good ideas don’t come from a vacuum. Your concept may have come to you while traveling on the road, taking a shower, or walking your dog – but it came from somewhere.
Part of your due diligence is checking out the competition. You need to see if someone else has thought of the same thing, independent of you. It happens, even with the most brilliant innovations – the differential calculus, or the theory of evolution by natural selection. It can certainly happen with your business idea.
Whether or not someone has come up with the same idea – and especially if they have – you want to ask yourself what you bring to the table that would make your startup unique. Success or failure of your enterprise will often hinge on this one consideration.
Assessing the viability of a business idea will always come down to this at some point – are people going to pay for it? Unfortunately, it is a question that can be difficult to answer.
Some startups begin with a test run of their product. This approach is useful because you gain market knowledge with minimal cost. However, due to the scale or the nature of your concept, it might not be possible to do a test run. Instead, draw upon the resources of the community. Fellow entrepreneurs can offer invaluable feedback and insights based on their own working knowledge.
Ultimately, there’s no hard and fast rule for knowing ahead of time whether your business idea will sell – this is part of the risk.
Mitigating risks: the LLC option
A key decision you’ll face in the initial stage is what type of business entity you’ll create. Sole proprietorship and limited liability company (LLC) are the most common types, with the former being a simpler process overall and requiring minimal upfront payment, but presenting more of a debt risk since you and your company is the same entity.
Creating an LLC provides a measure of tax advantage and debt protection, but unless you don’t mind studying the relevant laws, you may need to consult with an attorney to go over the fine points. An LLC may cost more initially but provides considerable insurance in the long run.
Starting a business and making it work is probably the modern-day benchmark for success. With the right measures taken, you can minimize your risk and give your business idea a chance to take off.