Small businesses boost Colorado 1 job at a time –Entrepreneurs gather, learn about challenges

Barbara Hardesty of Boulder started her own business last year, hosting trips to Italy, where travelers stay in a 19th century private villa and immerse themselves in the arts, cuisine and culture.

DaVinci Capers has no employees, but Hardesty contracts with other self-employed people for marketing advice, bookkeeping and graphic design. Hardesty, 54, said she hopes to hire an office manager soon.

By Kelly Pate Dwyer
Denver Post Business Writer

http://www.denverpost.com/Stories/0,1413,36~33~2027566,00.html

Small businesses like Hardesty’s have become the driving force in Colorado’s job market, if only by adding one job at a time.

"Where you’re seeing the growth is the small guys. They’re the only ones," said Patty Silverstein, consulting economist with the Denver Metro Chamber of Commerce.

That was Silverstein’s message Thursday to several hundred businesspeople at "The State of Small Business" event hosted by the chamber at the Westin Hotel downtown.

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The number of small businesses – those with fewer than 100 employees – grew 14.2 percent over the past four years, while the number of larger businesses declined.

Among the smallest businesses, those with four or fewer employees, employment grew 2.2 percent last year, Silverstein said. That compares with an overall 2003 net job loss of 2.5 percent in the state.

In addition, there are more than 300,000 sole proprietors, she said.

Colorado, with its mountains and moderate climate, has long been a destination for entrepreneurs. However, the state is torn between fueling and limiting growth, said John Huggins, director of the Mayor’s Office of Economic Development and a panelist at Thursday’s event.

"We’re viewed as a pleasant place to live, to work, but not necessarily to start a business," Huggins said. "We’re schizophrenic about growth."

In addition, startups face impediments such as business personal property tax, said panelist Brian Vogt, director of the Colorado Office of Economic Development & International Trade. The state could do better, he said, letting people know about resources such as the Colorado Small Business Development Center, where entrepreneurs can get financial, regulatory and marketing advice.

Other roadblocks: Banks and other investors have been tight- fisted on lending. And some entrepreneurs with startup ideas are cautious to take on debt.

Still, economists such as Silverstein suspect that more people are taking that risk than government statistics show.

The state labor department measures employment primarily by the quarterly payroll reports filed by employers. A small-business owner such as Hardesty, who only uses contract workers, won’t show up in those reports.

"It’s the smaller businesses that in a downturn break away and pursue breakthrough technologies" and ideas, said Tom Frey, executive director of Louisville- based DaVinci Institute, a nonprofit think tank that helps entrepreneurs develop ideas.

Hardesty sought Frey’s guidance on how to find $250,000 in startup funds. She never found investors, but got the support she needed. She has funded La Bella Vita LLC, doing business as DaVinci Capers, with savings and personal loans.

Judging by interest in the trips – the first one was last fall – Hardesty expects to be profitable in 2005.

"I may be starting in a valley," she said of starting her company in an economic downturn, "but when a peak comes I’ll already be there, I’ll be established."