When considering whether or not to start a small business, there are several factors to keep in mind while determining where you would start your business. Fit Small Business compiled a 2018 ranking of all 50 states to determine the best states to start a small business, using the following categories:
Taxes – This includes corporate, sales, property tax, individual income, and unemployment insurance tax rates. The ranking demonstrates how much you can expect that your business would have to pay in taxes in the state ranked.
Labor Market – This category was assessed by including unemployment rates well as education levels (% of adults ages 25 to 34 who have attained at least a bachelor’s degree). This is meant to measure availability of desirable employees and the overall strength of this market in the state ranked.
Cost of Living – This includes costs of utilities, grocery, healthcare, housing, and transportation.
Quality of Life – This category is based on access to education, physical safety, and healthcare.
Cost to Start a Business – Using per capita income in the state ranked, this is meant to evaluate costs to staff your business as well as the per sq. ft/year cost to rent a commercial building.
Startup Activity – Meant to illustrate how likely new businesses are to succeed or fail in the state ranked, this represents the # and survivability of new businesses in that state.
Access to Capital – This assesses the likelihood of your business attaining startup capital by evaluating the size and # of small business loans granted and by measuring access to capital based on the availability and amount of venture capital funds.
Taking into account these factors, the survey ranked Arizona 47th out of the 50 states, with each of the categories above ranked accordingly:
Taxes: 21 out of 50
Labor Market: 45 out of 50
Cost of Living: 21 out of 50
Quality of Life: 37 out of 50
Cost to Start a business: 48 out of 50
Startup Activity: 34 out of 50
Access to Capital: 43 out of 50
Some cities in Arizona such as Tolleson, Sedona, and Wickenburg are better to start a business in than others. It’s worth noting, too, that Arizona is home to the oldest franchise in the NFL, the first barrel of U.S.-produced tequila, and the world’s first retirement community, Sun City! If margaritas and the Grand Canyon peak your interest (but not margaritas while climbing the Grand Canyon), then Arizona may be the right place for you and your new business!
Arizona Department of Revenue 1600 West Monroe Street Phoenix, AZ, 85007 P 602-255-3381
Reserving your name in Arizona: Registration is not legally required but is an accepted business practice. Registration may be required to open business bank accounts and/or obtain additional business licenses. Sole proprietorships and partnerships may register names with the Secretary of State; LLCs and Corporations register with the Arizona Corporate Commission. Link to register as LLC or Corporation is below: Reserve Your Name in Arizona
