GRAND JUNCTION, Colo. (KKCO) - When it comes to doing business, few places are better than Colorado -- only four to be exact, according to a new report.

An economic roller coaster ride is how one might describe the past year in Colorado. But experts say one thing that's remained constant is its entrepreneurial spirit.

"This is an innovative, independent community," said Chris Reddin, Executive Director of the Business Incubator Center. "That kind of Western mindset, that 'hey, I'm going to figure out how to do this myself', that's the heart of entrepreneurship."

The Business Incubator Center helped launch and grow 728 small businesses in the Grand Valley in 2010 -- which is why Reddin says she's not surprised to see Colorado sitting at number 5 on CNBC's list of the top states for business.

"Colorado is a great place to start a business," said Reddin.

Each year the network grades the states in ten categories -- things like workforce, education, and technology & innovation -- then ranks them based on their scores.

One category where Colorado did very well was quality of life, coming in at 7th.

"That's no surprise at all, I think to anyone that lives here" said Diane Schwenke, President and CEO of the Grand Junction Chamber of Commerce. "We tend to attract the people who like the outdoor lifestyle and we tend to be a good place to raise a family."

The state received its highest marks in the the business friendliness category -- or how easy the state's regulatory and legal framework make it to operate a business.

"Forming an entity here in the state takes about 15 minutes, it can be done online, and it costs 50 dollars," said Reddin. "That's one of the cheapest costs of starting a business anywhere in the country and certainly one of the fastest."

The 6th place ranking in that category surprised some local business leaders.

"What I tend to hear about is how regulation is negatively impacting businesses," said Schwenke. "But I think we tend to focus, as a business community, on those things instead of the fact that we're still doing better than some other places."

Colorado also made huge gains in the transportation and infrastructure category, jumping up ten spots from 2010.

The state's ranking in the economy category, however, left something to be desired -- plummeting from 8th in 2010 to 26th in 2011.

"This year they factored in how fiscally sound your state was," said Schwenke. "And we all know what the State of Colorado had to do to balance the budget this year, the kinds of slashes that we saw."

In the cost of doing business category, Colorado slipped from 25th to 30th.

"Colorado tends to fall behind other places which have aggressively gone after reducing taxes," said Reddin. "We do have lower taxes, but we don't have the lowest taxes."

But good or bad, experts say it's ultimately up to a business -- not a list -- to determine if Colorado is a good place for them to be.

"These lists do help, but I always caution that it's a cumulative score," said Schwenke. "We have our issues, we have our assets."

The states that beat Colorado were Virginia, Texas, North Carolina, and Georgia.

Colorado was ranked 3rd overall for each of the last two years, but has been in the top five since 2008.

To view the complete report, click on the link below listed under "Related Links."