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A rizona is a state of entrepreneurs, and with over 600,000 small businesses based within its borders, it certainly shows.
Want to start your own business in Arizona? Here's how you can do just that, step by step.
Starting a business is a big decision, and so is choosing where to start it. From local economies to tax requirements to regional demand, there are a lot of reasons why you might want to base your business in one place rather than another.
Considering launching your business in Arizona? Here's what you need to know before pulling the trigger.
The SBA found that among all small businesses in Arizona (i.e., those with less than 500 employees), these are the five largest industries as of 2021:
And among AZ small businesses with fewer than 20 employees, the five largest industries are:
Depending on the type of company you're planning on starting, those numbers may give you an insight into the kinds of small businesses that tend to thrive in Arizona.
Although Arizona is a fairly large state, over 60 percent of its inhabitants live in Maricopa County :
That makes sense when you consider that Maricopa County is home to many of the state's most populous cities, including Phoenix, Mesa and Chandler.
Pima County, home to Tucson, is the second-most populous county in the state, with over 14 percent of the population.
So if you're planning on starting a brick-and-mortar business that requires plenty of foot traffic, you might want to keep that population data in mind.
Arizona's overall population is on the rise, increasing from 5.1 million in 2000 to 7.3 million in 2022. Phoenix's growth is even more staggering — from 2010 to 2020, it was the single fastest-growing city in the U.S. :
While this is great news for entrepreneurs on a number of levels, it's also important to know that population growth has its downsides, with higher real estate prices being one of the most major.
For instance, office space in Phoenix already costs $277 per square foot as of September 2022. That's a higher cost than you'll find in Tampa, Nashville, Atlanta, Portland and many other major cities. And if Phoenix's population keeps growing at its current pace, it's likely that price will rise — the same applies to the rest of Arizona's cities, too.
So if you're planning on starting a brick-and-mortar business or renting office space in a major Arizonan city, keep the state's booming population in mind.
Arizona's total number of small businesses is already impressive, but what's truly jaw-dropping is that they make up a staggering 99.5 percent of all Arizona businesses as of 2021.
What's more, the U.S. Small Business Administration (SBA) reports that the state is home to 1.1 million small business employees, who together account for about 43 percent of all Arizona employees:
Why are so many small businesses located in Arizona? The answer comes down to a combination of benefits that business owners appreciate. These include:
So as you embark on your entrepreneurial journey in Arizona, you can get your business up and running in nine steps.
Not sure what to call your soon-to-be business? Now's the time to decide. When brainstorming business names, try to think of options that are:
As you narrow down your choices, also consider whether you'd like to trademark your business name in the future. If you would, you'd be smart to choose one that's more arbitrary and fanciful than literal and descriptive.
For instance, you'll have an easier time trademarking a name like Cold Bay Coffee Roasters than San Francisco Cafe . Learn what can and cannot be trademarked for more trademarking tips.
If you're still struggling to come up with a catchy business name, don't sweat it — our Business Name Generator can give you the inspiration you need.
Once you've settled on a handful of favorite names, you'll need to make sure they're not already taken by performing a business name search. The Arizona government has its own online tool where you can do so, or you can use Bizee's free Business Name Search Tool instead.
(Quick tip: Arizona's naming policy requires businesses to include and omit certain words from their names depending on their entity type — more on entity types below).
Now it's time to get down to the nitty-gritty details by choosing a business entity type.
If your business will be for-profit, you'll have five entity types to choose from (nonprofits are their own separate entity type):
For most small businesses, an LLC is the most sensible, affordable and beneficial entity type. So while every business is different, you'll probably find that an LLC is the right choice for yours, too.
Next, set your business up for success by writing a thoughtful business plan .
There are no hard and fast rules for what a business plan must contain, but we recommend including these key components:
Once your business plan is complete, you'll be thoroughly prepared to make your new small business official.
Ready to take your business from dream to reality? Register it with the state of Arizona.
Specifically, you'll need to file your LLC or corporation with the Arizona Corporations Commission (ACC). How much does an LLC cost in AZ? You'll pay $50 to file your Articles of Organization. Similarly, filing Articles of Corporation costs $60 for for-profit businesses and $40 for nonprofit ones.
To file, you can log in to the ACC's online portal and go from there. Alternatively, you can file with Bizee and let us do all the paperwork for you — the choice is yours.
Arizona is also one of the few states that requires new businesses (including LLCs) to publish notice of their formation, so don't forget to do so once your Articles of Organization are approved. For details, see Arizona's official legislature on the subject.
Depending on the type of business you're establishing, you might need a significant amount of funding to get off the ground.
If you're starting a brewery, for example, you'll likely need about $250,000 . And if you don't have that kind of money freely available, you'll need to get funding from outside sources.
Don't get us wrong, there are plenty of Arizona-based businesses you can start with little or no money . But if you've chosen to start a business that requires a little extra moolah, you have a range of options to choose from.
Namely, you may be able to secure funding from:
If you haven't already determined whether you want to have a brick-and-mortar location, an online-only model or a hybrid of the two, now's the time to make a decision.
Naturally, each option has its own set of perks and drawbacks.
With a brick-and-mortar business, you'll enjoy:
However, running a brick-and-mortar business comes with several downsides. These include:
If you have an online-only business, on the other hand, you'll get benefits like:
On the flip side, online-only businesses have drawbacks such as:
And, of course, you'd be wise to consider that most brick-and-mortar businesses can greatly benefit from having an online presence via a business website, Google Business Profile and social media marketing . So depending on the kind of business you're opening, a hybrid approach might be the most beneficial one for you.
Wondering if you need licenses or permits for your Arizona business? As per the Arizona Commerce Authority :
Arizona does not issue nor require a state business license, however, most city/town offices issue business licenses. Some may only require businesses that are based within their jurisdiction to obtain their license; others may require anyone conducting business within their city/town limits to obtain their license.
So to find out which municipal licenses you may need, you'll need to contact the office of the city or town in which your business is based, as well as any you expect to be doing business in.
Also remember that you may need to obtain federal or state licenses or permits depending on the type of business you're starting. If you're entering the agricultural industry, for instance, or if you're opening a tattoo shop, you'll need additional licenses or permits to operate legally.
Want to ensure you're not overlooking any required licenses or permits? Bizee's Business License Research Package takes the guesswork out of getting licensed.
As we mentioned above, just about any business can benefit from having a business website of its own. But if you haven't created a website before, the idea of doing so can sound daunting.
Luckily, the process of getting a business website is relatively straightforward. Just be sure to:
Remember, even a simple website is better than no website at all, and you can always improve it over time.
The last step before opening your business is protecting you and your business's assets with business liability insurance .
Depending on the type of business you're starting, you might want your insurance to cover:
Once you've purchased an insurance policy that covers all your bases, you'll be ready to officially open your business' doors.
Arizona is a state that's chock-full of small businesses, so why shouldn't yours join their ranks?
After all, there are only nine steps standing between you and the business you've been dreaming of opening. And once you're ready to make yours official, you can file your LLC for $0 + state fees with Bizee.
Carrie Buchholz-Powers is a Colorado-based writer who’s been creating content since 2013. From digital marketing to ecommerce to land conservation, she has experience in a wide range of fields and loves learning about them all. Carrie is fond of history, animals and beauty in equal measure. In her free time, she enjoys knitting, playing video games and exploring Colorado's prairies and mountains with her husband. Read more
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