Why I chose Denver to start a business

8 months ago  •  Add Comment  •  by Guy Peters

Denver City Skyline

Why move to Denver?

I moved from San Francisco in November 2014 to start a Denver house cleaning company, and I am often asked why Denver. The reasons were financial, political, and personal.

I moved five times in 20 years while working in corporate America. The moves were really about work, although I enjoyed each of the cities to which I relocated. But for the first time I would choose a state and city not based on a corporate move but on opening a house cleaning company that would be geographically confined. I needed to choose a place where I would be happy for 20 years.

Denver is good for business

I compared states on how business friendly they were and how good the lifestyle might be.  

Financially, there is much to think about because each state has different costs associated with business ownership, some of which is politically driven. I studied these costs, focusing on recurring expenses.

Workers’ Compensation (WC) insurance is a big one. In most states, WC costs for a house cleaning company ranges from about 2% – 6% of payroll expenses. Payroll expenses in this industry are roughly 50% of revenue, so it can add up quickly. If one has $20,000 in monthly payroll cost as a young company, that is $400 – $1,200 per month for this WC cost example. Shockingly, California charges 25% of payroll expenses for a new company, which is $5,000 per month in our example. I could never see any way to make money starting this company in California, if I did everything legally.

I mentioned politics, and once I decided to own a business I suddenly became politically aware. Politicians and voters can make decisions that are favorable or detrimental to a business. For example, Colorado passed a law to make the state minimum wage $12 per hour by 2020. This may hurt some companies, but I support the Colorado state minimum wage since we already pay much more. The federal minimum wage by the way is $7.35 per hour, so good for Colorado.

I can grow roots in Denver

Finally, personally, I never heard anyone say a bad word about Colorado. I had been to Denver twice in my career, but both times I flew in and out the same day for meetings, so that was no help. To check it out, I visited Denver for a week in October 2014. I didn’t know anyone, but could I grow roots and spend 20 years here? I flew back to San Francisco and spent a month packing and saying goodbye to my friends.

Guy Peters
MOP STARS

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