Small businesses in Colorado are continuing to grapple with an increasingly complex and burdensome regulatory environment. As the sixth most regulated state in the nation, Colorado has not slowed its pace with regulations climbing 2.4% over the past year to more than 205,000 state level regulatory restrictions.
The Colorado Chamber’s 2025 Regulatory Landscape Update, a follow-up report to its comprehensive 2024 study, confirms the negative impacts of excessive regulations on businesses of all sizes. For every 10% increase in state regulations, there is a direct loss of 36,000 jobs due to increased compliance costs, lost sales and other unintended consequences.
“As the Chamber continues its efforts to bring more accountability to Colorado’s regulatory climate, it’s important to understand the scale of the problem and track our performance,” said Colorado Chamber President and CEO Loren Furman in a recent press release. “Employers continue to tell us that our regulatory system has become increasingly complex, making it harder for businesses of all sizes to plan, invest and grow.”
Colorado’s small businesses have consistently identified the state’s high regulatory burden as a significant barrier to doing business. The Chamber’s 2025 business survey found that 65% of businesses with fewer than 100 employees list regulations as one of their top three challenges. Of those, 58% say state-level regulations are the primary source of that burden. Labor and employment regulations are the biggest concern for small business owners, with 85% identifying them as their top issue. Environmental regulations follow, with 59% expressing concern in that area.
Small employers play a critical role in job creation and economic development, so when these businesses face barriers, the broader economy feels the impact. Excessive regulations not only challenge day-to-day operations but also make Colorado less competitive and drive businesses out of the state.
When businesses are overly burdened by regulations, employees and consumers feel the consequences. A Colorado Chamber member described how a drastic regulatory increase in the assisted living sector has impacted daily operations. The member described regulations as specific as employee mealtime mandates and rules on how mop water is handled. One regulation required that a dining area can comfortably accommodate all residents but does not define what “comfortable” means.
The unintended consequences of increased regulations are changing how small businesses plan for the future. Instead of focusing on growth, hiring and long term investment, small business owners are dedicating more time and resources to navigate an increasingly complex regulatory environment.
The Colorado Chamber continues to keep regulatory reform a top priority. Learn more about the Colorado Chamber’s priority legislation for the 2026 legislative session that creates more robust standards and criteria for how state agencies review existing regulations here.