According to Census Bureau data, new business applications in Colorado surged 115% year-over-year from December 2022 to December 2023, the highest growth rate across all states. This significant increase far outpaced the 7.4% national average for new business applications over that same period.
While entrepreneurial activity grew across most of the country, Colorado saw an exceptionally high number of new companies seeking to open last year. The data suggests the state has experienced an acceleration in economic momentum and optimism about starting new business ventures.
“We’ve seen an uptick in applications and questions regarding business registrations and entity structures,” says Ryan Clement of Business and Technology Legal Group. “The interest shows massive economic promise if even some of these founders can overcome the hurdles of launching. If the momentum translates into more operating businesses, it could boost local jobs and opportunity down the line.”
What Fueled Colorado’s Application Spike?
Multiple factors likely contributed to Colorado’s standout performance.
The state temporarily reduced the filing fee to start a new business to just $1, significantly lowering barriers between 2022 and 2023 (source). In addition, recent population increases in Colorado may have brought fresh talent and business ideas to the region.
Key Application Statistics
Colorado saw 560,000 new business applications filed in 2023. This represents a 115% increase over the 259,000 applications submitted just a year earlier in 2022.
- Colorado’s 115% yearly growth rate surpassed the 7.4% national rate over the same period.
This application boom propelled Colorado to a 10% national market share of the 5.5 million total business applications filed across the United States in 2023.
- Colorado more than doubled its 4% national share from 2022
The net gain came from 301,000 additional new business applications received in Colorado between 2022 and 2023.
While entrepreneurial activity expanded in most states last year:
- No other state came close to Colorado’s rate of growth
- North Dakota ranked second at just 37.7% increase over 2022 levels
The data spotlight Colorado as standing out from national trends with its acceleration in aspiring business owners seeking to access the market.
Caveats
Applications alone don’t guarantee business formations, operational capacity, staff hiring, or profitability. The number of applications does not demonstrate whether proposed businesses launch, run, employ people, or generate positive earnings.
What Could This Growth Mean for Colorado?
Colorado’s business application boom suggests economic growth could accelerate in the coming years. If even some of the 300,000 additional 2023 applicants succeed in launching and expanding ventures, substantial new jobs and income will follow statewide.
Places with significant application increases could expand hiring, buying, and offerings when new companies start. These new businesses would meet neighborhood needs and help current businesses. A rush of new companies can stir up excitement and innovation at a local level while attracting amenities, connections, talent, and capital over time.
However, the data alone cannot confirm future job or economic impacts. Further tracking of actual operating businesses and financing data is needed. Applicants also represent a narrowed demographic, lacking equal entrepreneurship access and means.
In short, Colorado’s 2023 application spike indicates promising activity ahead but warrants patience until more businesses materialize, expand, and drive measurable growth.
