In Arizona and in any part of the United States, you can actually start your business with zero dollars, but I must say that there will be some restrictions to what you can do and the type of business you can start if you don’t have money.
The cost of starting a business in Arizona is very affordable. For example, to start an Arizona limited liability company (LLC) will cost you only $50. This fee is paid to the Arizona Corporation Commission when filing the LLC’s Articles of Organization.
Trust me, Arizona is a great place to start a business even if you don’t have money. This is so because the composition of the state’s economy is moderately diverse; although health care, transportation, and the government remain the largest sectors.
The state’s per capita income is $40,828, ranking 39th in the U.S. The state had a median household income of $50,448, making it 22nd in the country and just below the U.S. national mean.
14 Steps to Starting a Business in Arizona
If you are interested in starting a business in Arizona, here are the steps you are expected to follow to achieve your aim.
Table of Content
- Step 1: Choose a Workable Business Idea or Niche
- Step 2: Conduct Your Feasibility Studies and Market Survey
- Step 3: Choose a Catchy Name for Your Business
- Step 4: Write a Workable Business Plan
- Step 5: Choose a Legal Entity for Your Business
- Step 6: Register Your Business Name
- Step 7: Source for New Business Financing
- Step 8: Apply and Obtain the Needed Business License and Permits
- Step 9: File Records For Your Form of Business
- Step 10: Register an Assumed or Fictitious Business Name (Trade Name)
- Step 11: Purchase the Needed Business Insurance
- Step 12: Lease or Rent an Ideal Office Location
- Step 13: Hire the Required Employees
- Step 14: Advertise and Market Your Business
Step 1: Choose a Workable Business Idea or Niche
No serious entrepreneur registers a business without first settling for a workable business idea or niche in an industry. The fact that businesses are known to thrive if the right things are done, does not mean every business will thrive in Arizona.
In essence, the first step that you are expected to take if you are serious about starting a business is to come up with a workable business idea; an idea that can get the full support of the Government and of course that can attract clients.
For example, if you are not too sure whether starting a Marijuana dispensary business is legal in Arizona, why go ahead to choose such a business idea? So, the rule of thumb is that you must ensure that your business idea falls in line with what is acceptable in Arizona and one that you can easily secure the necessary permits and license to operate legally.
Step 2: Conduct Your Feasibility Studies and Market Survey
Irrespective of the state or city you decide to start a business, the one important step you are expected to take is to conduct thorough feasibility studies and market survey. In other words, once you have settled for a business idea you want to start in Arizona, the next ideal step to take is to conduct thorough feasibility studies and a market survey.
With the result from your feasibility studies and market survey, you will be able to make an informed decision, especially as it relates to the type of business to settle for, the location of your office, the demographic composition of those who would need your services or products, the likely competitions that you will be confronted with, how to source for raw materials, etc.
Step 3: Choose a Catchy Name for Your Business
After coming up with a workable business idea and of course having conducted your market survey and feasibility studies, the next step is to choose a catchy name for your business. The truth is that when it comes to choosing a name for your business, you should be creative because whatever name you choose for your business will go a long way to create a perception of what the business represents
Before choosing a name for your business, it won’t cost you anything to go online and check out the names of the leading brand in the industry you intend to start a business in so as to be properly guided when choosing your own business name.
Step 4: Write a Workable Business Plan
No matter the type or size of business you intend to start in Arizona, it is a wise decision to first write a good business plan before taking any action. In order to successfully run a business, you need to have a good and workable business plan in place.
A Business plan is the blue print that is needed to successfully run a business; with a workable business plan in place, you will reduce the trial and error approach of doing business. You will be able to manage your business with purpose and perhaps precision; you will know what to do per time and how to handle challenges, growth, and expansion.
The rule of thumb when writing a business plan is to try as much as possible to be realistic and never to over project when putting figures on income and profits et al. As a matter of fact, it is safer to underestimate when writing a business plan so that you won’t be so disappointed when reality sets in.
These are the key areas that should be covered in your business plan;
Executive summary and Company’s descriptions
You are expected to write about the concept of your business, descriptions of your company, your company’s vision statement, mission statement and where your company will be located and also if you intend to sell franchise.
Other key components that should not be missing in your business plan are product offering, SWOT analysis, competitive analysis, marketing, and sales analysis/strategies, target market, market goals, pricing, costing and financial projection, publicity, and advertising strategy, expansion, and growth strategies, budget, and start-up capital generation et al.
Step 5: Choose a Legal Entity for Your Business
If you choose to start your business in Arizona or any state in the United States, it is important to note that there are only four basic forms of business ownership or legal entity you can build your business structure on and they are the sole proprietorship, general partnership, limited liability company which is commonly called LLC, or corporation (‘C’ corporation or an ‘S’ corporation).
Here are some of the factors you should consider before choosing a legal entity for your business; limitation of personal liability, ease of transferability, admission of new owners and investors’ expectation, and of course taxes. The truth is that you can choose to start your business as a limited liability company (LLC) and in the future convert it to a ‘C’ corporation or an ‘S’ corporation especially when you have the plans of going public.
Some of the advantages of upgrading a business from a limited liability company (LLC) to a ‘C’ corporation is that it will give you the opportunity to grow the business so as to compete with major players in the industry; you will be able to generate capital from venture capital firms, you will enjoy separate tax structure, and you can easily transfer ownership of the company; you will enjoy flexibility in ownership and in your management structures.
Step 6: Register Your Business Name
Once you are able to dutifully carry out all the steps listed above, then it shows that you truly mean business and the only step that can take you closer to achieving your dream of starting your business in Arizona is to register your business name.
Of course, you would have done the necessary business name search that will ensure that you are not settling for a name that is already in their database. If you don’t want someone to register your business name, then you should be fast about registering the business name. As regards your registration and licensing requirements, you should visit your county and state government office to get the process started.
To register a limited liability company successfully, you will have to prepare and file the Arizona Articles of organization. The filing can be done by mail, online, or in-person. It is important to note that when filling, you must state whether your L.L.C. will be manager-managed or member-managed.
Arizona filing cost is $50 and is non-refundable. If you want to expand your existing L.L.C. to Arizona, you will be required to form a Foreign L.L.C. Please note that in Arizona, there are separate legal definitions for trademarks, service marks, and trade names. Generally, trademarks, service marks, and trade names are used to uniquely identify goods (products), services, or a business.
This includes distinguishing a product, service, or business from potential competitors. (Arizona makes a point of stating that registering a trade name does not give exclusive rights to the registration holder.) Trademarks and service marks can be registered with the state. (This is distinct from federal registration.) You can find more information by going to the Trade Names and Trademarks section of the SOS website. From the site, you can download the Arizona Trade Name and Trademark Handbook.
Step 7: Source for New Business Financing
One of the reasons why Arizona is considered a top destination when it comes to doing business is because there are financial institutions that are established to help finance a new business. So, the next step you are expected to take if you have successfully registered your business and obtained the required document is to ensure that you source for new business financing. The only reason why you should ignore this step is if you already have the required start–up capital needed to kick start your business.
Small Business Administration (SBA) is a major source of financing for entrepreneurs especially those that operate small businesses. The Small Business Administration has several loan programs that readily make available the needed funding for small enterprises who are unable to secure loans from lending institutions on their own.
Research shows that in the fiscal year 2005 alone, the SBA made or guaranteed $19 billion worth of loans to small enterprises all across the United States of America, the largest in recent time. Loans were provided to more than 80,000 small companies and 28,000 of them were start-ups.
Step 8: Apply and Obtain the Needed Business License and Permits
Please note that Arizona does not issue nor require a state business license, however, most city/town offices issue business licenses. There is no “blanket state license” that allows you to “opt out” of obtaining local licenses. In Arizona, one of the more important state licenses is the Transaction Privilege Tax (TPT) license. The license is required for businesses that will sell products or engage in certain types of activities. The TPT license is similar to what in other states would be called a sales tax license.
One place to check for more information about TPT licenses is the Arizona Department of Revenue (AZDOR). The Licensing Guide section of their website includes a link to a downloadable brochure, A Guide to Taxes for Arizona Businesses, that has detailed information about TPT licensing.
Apart from a TPT license, some businesses may be required to obtain what is broadly known as regulatory licenses and permits. These are licenses and permits for certain regulated business activities. Regulatory licenses and permits might cover, for example, activities affecting the environment or health and safety. They may be issued by, for example, the Arizona Department of Environmental Quality or the Arizona Department of Health Services.
Apart from state licenses, some required licenses and permits are issued locally. The requirements vary depending on the city, town, or county involved. The City of Tucson, for example, has its own business license requirements. You can find more details by checking the website of the city and county where you’ll operate your business. (Some businesses may be exempt from local licensing requirements under state or federal law.)
Unlike other states, Arizona’s state government currently does not have a website with a list of licensed professions and occupations and links to their respective regulatory boards and licensing requirements. Therefore, you’ll need to do an Internet search for the profession or occupation in which you’re interested.
If you are not too sure about the type of business license and permit to apply for, then you should visit your city government office to inquire. They have a useful tool for finding out what federal, state, and city permits and licenses you will need to do business in any city in Arizona.
Step 9: File Records For Your Form of Business
Aside from obtaining the required business licenses or permits, some legal forms of business, such as corporations and limited liability companies (LLCs), are required to file records with the state. More specifically, corporations, LLCs, and certain other types of businesses must file organizational documents with the Arizona Corporation Commission (ACC). Check the Corporation Division Forms section of the ACC website for more details.
Step 10: Register an Assumed or Fictitious Business Name (Trade Name)
A good number of small businesses in Arizona don’t simply operate under the names of their owners. Instead, they operate under a business name. In addition, some businesses, such as corporations and LLCs, may originally register with the state under one name (sometimes called the registered name, actual name, or true name), but later choose to operate under another name.
Depending on where you’re doing business and how your business is structured, this alternative business name technically may be known as an assumed name, a fictitious name, a trade name, or a DBA (for “doing business as”).
If you want to operate your Arizona business under a trade name, you can file a form with the Arizona Secretary of State (SOS). The filing, however, is not legally required. For more information on state requirements, check the Trade Names and Trademarks section of the SOS website.
Step 11: Purchase the Needed Business Insurance
The rule of business engagement in Arizona and in most states in the United States of America is that you can’t operate a business without having some of the basic insurance policy covers that are required by the industry you want to operate from.
So, it is important to create a budget for insurance and perhaps consult an insurance broker to guide you in choosing the best and most appropriate insurance policies for your business. You might want to consider buying some or all of these insurance policies for your business; General insurance, Health / Medical insurance, Liability insurance, Workers’ compensation, Overhead expense disability insurance, Business owner’s policy group insurance, and Payment protection insurance.
Please note that if you are going to operate your business from home, then you might want to learn about home-based business insurance and how to save money on the cost of business insurance.
Step 12: Lease or Rent an Ideal Office Location
Another important step to follow when establishing a business in Arizona is to choose an ideal location for your office. When it comes to renting an office facility in Arizona, the nature of business you want to do should serve as a guide. Besides, you will need your business license and permit as part of the document to be tendered before any landlord or realtor will sign any leasing agreement with your business in Arizona.
Step 13: Hire the Required Employees
The only reason why you should ignore this step is if you want to run a one–man business. If you want to operate a business in Arizona, it is mandatory to hire only those that are legally permitted to work in the United States, or else your business might be fined or shut down. The is why once you have hired employees; your business will probably need to register with the state government.
Step 14: Advertise and Market Your Business
One thing is certain, if you choose to start any business in Arizona, you can rest assured that there are competitors waiting to compete with you for the available market share. So, if you want your business to do well, then you must fashion out ways to advertise and market your products or services.
The truth is that if your business or brand is always in the eyes of the public, they will be tempted to do buy from you. You can use both print and electronic media to promote and advertise your business, but you must ensure you check up with the state government to know the rules and regulations governing the advertising of the type of business you are operating.
Please note that you must have a federal EIN to get an Arizona state tax ID number unless you are the sole employee of the business. Sole proprietors with no employees may substitute their Social Security number. To apply for a federal EIN, you can apply online at the Internal Revenue Service or call the IRS at 800-829-4933.
- Can You Buy Alcohol With a Vertical License or Paper License? - July 2, 2021
- How Long Does It Take for an EIN to Become Active? - July 2, 2021
- How to Cancel My EIN Number? - July 2, 2021