First in an ongoing series tracking the El Paso County economy from primary public records.
For most of the last decade, El Paso County started about four businesses for every one that closed. That ratio held remarkably steady through a pandemic, a hiring boom, and the fastest stretch of business formation the county has ever recorded. Then, in 2024, it broke.
The formation-to-dissolution ratio fell to 2.52 to 1, its lowest point in the Colorado Secretary of State record going back to 2015. The county did not stop forming businesses. It kept forming a lot of them. What changed is that businesses started closing faster than the new arrivals could outpace, and the cushion that had defined the local economy for ten years got thin.
That is the number this brief is built on. It is also the number worth watching, because by 2025 it had already started to recover.
What the ratio actually measures
Every limited liability company, profit corporation, nonprofit, and foreign entity that wants to do business in Colorado files with the Secretary of State. So does every one that dissolves or withdraws. Those filings are public, dated, and unambiguous about what kind of event they record. If you count formations and dissolutions in the same county over the same window, the ratio between them is a clean read on whether the local business base is expanding or contracting.
Here is El Paso County, by the legal effective year of each filing:
| Year | Formations | Dissolutions | Ratio |
|---|---|---|---|
| 2019 | 11,492 | 2,938 | 3.91 |
| 2020 | 12,842 | 3,123 | 4.11 |
| 2021 | 15,124 | 3,521 | 4.30 |
| 2022 | 18,794 | 4,583 | 4.10 |
| 2023 | 19,305 | 5,006 | 3.86 |
| 2024 | 16,232 | 6,435 | 2.52 |
| 2025 | 18,453 | 5,485 | 3.36 |
The story is in the last two rows. 2024 was a double hit. Formations dropped about 16 percent from the 2023 peak, and dissolutions jumped about 28 percent in the same year. Falling formations alone would have been a slowdown. Rising closures at the same time is what collapsed the ratio. Most of the prior decade sat comfortably above four. 2024 did not clear three.
Why 2024, specifically
The closures were not spread evenly across old, established companies. They were concentrated in businesses that had only recently opened.
When you trace every entity that dissolved in 2024 back to the year it was formed, the recent cohorts dominate. Businesses formed in 2022 and 2023 account for nearly 39 percent of all 2024 dissolutions. The 2023 formation cohort had the highest single-year dissolution rate of any group, with 7.59 percent of those entities already gone by the end of 2024.
That pattern has a name. Young businesses fail at higher rates than mature ones, a tendency economists call the liability of newness. The 2021 to 2023 formation boom that drove the county to record highs also created an unusually large population of young, fragile entities. When conditions tightened in 2024, that population is where the closures landed. The boom and the bust are the same businesses, observed two years apart.
This is the part a single headline ratio cannot tell you on its own, and it is why the cohort view matters. The 2024 dip was not a wave of long-standing Colorado Springs institutions shutting their doors. It was the pandemic-era startup surge thinning out.
The rebound, with a caveat
2025 is a complete year in this data, and it recovered most of the lost ground. Formations climbed back to 18,453, dissolutions fell about 15 percent to 5,485, and the ratio rose to 3.36 to 1. That is not a full return to the four-to-one baseline, but it is a clear turn in the right direction and a sign that 2024 was a dip rather than a new floor.
Whether the recovery holds is the open question this series will keep tracking. One soft year inside a decade of growth is noise. Two would be a trend. The ratio gives us a single, durable number to watch, and the cohort method gives us a way to see which businesses are actually moving it.
Data and Methodology
All figures come from Colorado Secretary of State business filing records, loaded into a local analytical database covering 275,180 entities and 1,482,011 transactions. Formations and dissolutions are counted by the legal effective date of the filing, grouped by transaction type. Dissolutions use a 15-label definition of entity death that deliberately excludes revivals (statements curing delinquency), preliminary intent-to-dissolve filings, registered-agent changes, and trade-name withdrawals, so a single closure is never double-counted.
Two caveats travel with these numbers. First, the Secretary of State file has no county field, only a free-text city entered by each filer. El Paso County is isolated by normalizing those city names and excluding neighboring counties, most importantly Teller County towns such as Woodland Park and Cripple Creek, which a naive match would pull in. Second, the Secretary of State data does not carry industry codes, so this brief speaks to formation and closure volume, not to which sectors are growing. Industry and wage detail comes from a separate Bureau of Labor Statistics QCEW source, which has its own reporting gap across late 2024 and early 2025 and will be handled in a later piece. Figures here are reproducible from the public record and will be revisited as later filings settle.