Why start a business in Arizona? The Arizona economy keeps growing as the years turn by. The state ranks #1 for economic performance and #3 for its economic outlook in the United States according to official reports released in 2022.
Recently, Governor Doug Ducey announced the state’s historic flat tax rate of 2.5% to be enacted on January 1, 2023, instead of 2024 as originally forecasted. This is due to the thriving economy and the growth of Arizona’s competitiveness in recent times.
The economy is booming and more businesses are taking advantage of this to launch their own business in Arizona. Consequently making the state a home for small businesses and limited liability companies.
In this article, you will learn how to start your own successful business whether as a local resident or foreigner living in Arizona, United States. Before then, here are some important facts and figures you need as you start your business in Arizona.
Fascinating Business Facts and Figures About Arizona
Table of Contents
- The State of Arizona has a total land mass of 113,998 square miles (295,253 km2) making it the 6th largest state in the US.
- Arizona’s GDP reached $341.8 billion in 2022 with an increase of 2.5% from 2021.
- A total number of 4, 365, 728 people were employed in the workforce in 2022
- There are 657 industries in Arizona with Tourism having the highest rate of revenue
- Arizona has 85 colleges and universities
- It was named the 48th state of the United States of America on February 14th, 1912
- Phoenix is the capital of Arizona and the most populous city in the state.
- 10 of the largest cities in Arizona are Phoenix, Tucson, Mesa, Chandler, Glendale, Tempe, Peoria, Surprise, Yuma and Avondale
- The top 10 tourist attractions of Arizona are Grand Canyon, Sedona, Phoenix, Havasu Falls, Antelope Canyon, Saguaro National Park, Monument Valley, Tombstone, Hoover Dam, and Lake Powell.
Guidelines on How to Start a Business in Arizona
Step 1: Pick a Business Idea
Arizona business ideas are locked up in the day-to-day activities of residents. Choosing from a range of great business ideas begins with what you really want. Consider your strengths, hobbies, and natural interest to start up your business in Arizona.
There are over 15 business sectors to consider as you plan your business in Arizona. You just need to find where your gut is and explore it. You can start your business in Arizona by picking any of these: Real estate, Rental and Leasing, administration, business support, construction, educational services, arts, entertainment and recreation, accommodation and food services, utilities, agriculture, forestry, fishing and hunting. The list goes on as you carefully consider which sector to start your business in Arizona.
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Step 2: Decide on a Business Structure
The structure of your business startup is important to thrive in Arizona. There are basically three business structures to consider: DBA (Doing Business As), Limited Liability Company (LLC) and Corporation.
In Arizona, you file for a DBA with the Arizona Corporation Commission to start your business. The DBA is a Fictitious Business Name (FBN) given to single business owners otherwise known as sole proprietors. The DBA is a separate name different from the name of the individuals given to start their business in Arizona.
There are more businesses that operate under the LLC structure in Arizona. Why? The Limited Liability Company is a type of structure that can operate as a single member or multiple members entities yet with less complexity on management and taxation.
An LLC has increased credibility, taxation benefits and liability protection. A Corporation is a separate entity with a business structure that includes directors, shareholders, and other officers. The corporation structure is preferably for large companies with fundraising intentions. It has more complexity with filing, paperwork and taxation. Take a quick look at this article to learn the difference between the various business structures.
Step 3: Choose a Business Name
Naming your business is the next step. This is a critical step because naming your business is a combination of skill, product/service line and brand engagement. Let’s call it your Business Title. Your business name is your business’ first impression to potential clients and customers. So consider it a major step as you start up your business in Arizona.
However, before you settle for a name, do a name availability search with the Arizona Corporation Commission and the United States Patent and Trademark Office (USPTO). Your preferred business structure will reflect in the name to create a business in Arizona. If it is a limited liability, it must carry LLC with it and show incorporated if it is a corporation.
Your business online presence is also important, therefore choose a name that is electronically available and one you can use as a URL. Although your business name and URL must not be the same yet it is better not to use a name that another business has picked as a URL.
This is simply to achieve business uniformity online and offline. It shows you know what you are doing. Moreover, you do not want to type your business name and another business shows up? Once you figure that out, proceed to purchase your domain name and web hosting services at an affordable rate.
Step 4: Write Your Business Plan
A business plan is much needed to set up your business in Arizona. It is your one-stop guide for all you intend to achieve in the business. While writing your business plan could be a challenging task, there are several business plan templates and business plan software you can look out for online.
Your business plan should reflect your company’s overall view, vision and mission statement, market analysis, product/service analysis, competition, organization and management, marketing, sales and promotion, financial planning, investment tools and future projection.
Step 5: Register Your Business in Arizona
Now, you are all set to register your business. Business registration is another vital step to launching your business in Arizona. If the business is to operate as a Limited Liability Company, you will submit Articles of Organization with the Arizona Corporation Commission. However, to operate as a corporation is to submit Articles of Incorporation with the Arizona Corporation Commission.
You either register your business by meeting with the Arizona Corporation Commission or hire a local legal practitioner to register your business in order to be recognized as a business entity in Arizona. You can find quite a good number of them if you type, “Business incorporation experts or agency near me.”
Step 6: Obtain Your EIN, Tax ID, Business License, and other Permits
After registering your business, you need to obtain EIN, business permits, state taxes and other relevant documents functional in your chosen business sector. The federal Employer Identification Number (EIN) is a social security number for your company. All business structures need the EIN to successfully file paperwork and comfortably start their business in Arizona.
Step 7: Understand and Obtain Business Insurance
Setting up a business in Arizona includes understanding business insurance policies and obtaining one for your business. There are various business insurance options but you need to find out which is most preferable for your startup. A decent insurance policy should run annually and provide a quality level of protection.
Of course, you may need to search for the best business insurance company near you and compare quotes before taking your final decision.
Step 8: Organize Your Business
Set up your business to win. One way to thrive as either a service provider, consultant or whatever business venture you plan to start in Arizona is to have a separate bank for your business. Obtaining a business bank account will help you organize your spending, receive payments, pay utilities, and make other financial decisions.
Some of the best banks for businesses in Arizona are Alliance Bank of Arizona, Chase Bank, BMO Harris, Desert Financial Credit Union, and Arizona Bank & Trust. In addition to these banks, you may also need the services of Fintech companies operational in Arizona.
Step 9: Fund Your Business
There are loans and financing programs available in Arizona for you to grow your business. You can get help from the Arizona Commerce Authority for access to these loans and federal grant programs to start your business in Arizona.
Step 10: Market Your Business
Marketing your business is a top priority to grow your business in Arizona. As competition is high so also is the demand. With the use of effective marketing techniques, you will achieve your business goals and objectives. So whether you are a foreigner or local, take the opportunity to start your own business in Arizona.
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Final Words on How to Start a Business in Arizona
It’s important you know that it will cost you anywhere from $10 to $60 to file for an Arizona business entity. Other costs of setting up a new business in Arizona will go to rent, licenses, permits, and other minor expenses. The three major types of business licenses you should budget for in Arizona are Transaction Privilege (Sales) Tax (TPT), Business, and Regulatory (professional/special).