De Constructing Colorado with Evidence Based Insight – Issue 1

October 7, 2010 at 8:40 am Leave a comment

Colorado is a very interesting place to live when it comes to finance, purchasing large ticket items, and knowing where to best start a business. This series of articles is being written to educate investors, advisors, and entrepreneurs about the make up of Colorado from an investor stance as well as new business and we will be drilling down into 8 cities to clarify or enlighten the audience.      

These articles will be statistical in a way that makes sense on a high level and the best thing is there will be pictures. I even put some in this first post because I am always a little disappointed when you read that there is cool stuff ahead and there isn’t a sample. Well here goes, the sample is research that brought me to the eight areas. It is not too difficult to use numbers to skew information and my job is to dismantle the data and rebuild it to make sure that decisions are made based on information with substance.         

A source of information complied from public records and Business Journal data states 4,411 New Businesses Opened in Colorado in the Past 12 months. Another source that compiles data from public records, investor questionnaire, seminars, stockholder, and shareholder lists, as well as telemarketing and other proprietary sources states that there are 9,687 Accredited Investors in Colorado. The third-party vendors have been in business providing quality data one for decades and the other for over a century, and they have each built a reputation as a good data provider.         

New Businesses by Zip Code as Points

This map shows the points where a new business was established in the last 12 months. Points are a good source of reference but unfortunately do not tell much of a story. As you see below  are a lot of point, 4,411 to be exact, and each looks the same so we might know where a business started but nothing about the number of businesses per zip code.         

         

 New Businesses by Zip Code as a Heat Map – There sure seem like a lot of point but how hot are they?

This is getting a little closer to what we need because we have added a layer of visual WOW. When looking at the map below you know that red mean hot and blue means cold. It starts to look even better when we drill down, which will happen in future posts. Our goal now is to pick the 8 hottest spots and break them down to see why they tick the way they tick.         

 

  

Without Getting too Mathy, This is How I made the List    

  • I calculated an average ratio for both Investors/New Business and vice versa. I then took a ratio for each city and then divided that by the average ratio and then multiplied that number by 100 for an index.
  • That was to prove that I have an idea of what we are looking for and there will be no more math presented unless requested.
  • What is a good number you ask… Take Littleton, for example:
    • The ratio of new business to Accredited Investors is .45 for all of Colorado and 10.88 for Littleton
    • Using 100 as the average or base line index of investors to new businesses, we see that Littleton is a 497
    • The dismantling will occur because all of this information is based on public record, postal territories, and other non-sense the government used to identify areas. Each city below will be redefined as a business area and you will have a better idea of the Colorado Economic Climate once we are finished. 

Here is the list of 8 cities that we are going to dismantle a bit. Our prediction is that Littleton is going to tell us a lot about how to grow an economy because they use a program called Economic Gardening as opposed to Economic Hunting. We are going to prove that hunting might put food on the table tonight and gardening will supply food for a long period. I briefly met with Chris Gibbons, Director of Economic Development for the City of Littleton. I have a feeling we can all learn a lot from Chris, I’m sure he doesn’t mind teaching.     

The List

 
LITTLETON
FORT COLLINS
LAFAYETTE
GOLDEN
BROOMFIELD
LONGMONT
ENGLEWOOD
LOUISVILLE

 

The goal is to find out what works for who and what doesn’t work and what other factors we can uncover. I will be as easy on the math and heavy on viduals as possible. 
  

This Should Be Fun

  

         

 

 

        

Entry filed under: Uncategorized.

Of Course Jon Has Something to Say – This is going to be a big project 53 Second Profile – Have You Met Chris?

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