Starting a business may seem like a challenging undertaking. With so much to do and plan, you may feel as if you don’t know where to begin. In this article, you will find everything you need to know about starting your own business in Arizona with a detailed step-by-step guide.

By the end of this article, you will know how to start a business in Arizona successfully.

Step 1: Choose Your Idea

Every business starts with a single idea. However, there are several different ways to choose your idea, and there are methods to come up with an idea in the first place if you don’t already have one. Selecting an idea can be easy, but choosing one that will actually work is the trick.

When deciding on what idea might work, it is a good idea to ask yourself the following questions:

  • What are my hobbies and passions? Then, think about if any of these passions can be turned into a business.
  • Is there a place for my business in the Arizona marketplace? It is a good idea to consider how saturated the market may be with particular products or services.
  • Consider the needs of your community and how your business could benefit them.

Answering questions like these will get you thinking and help you land on your business idea.

Step 2: Pick a Name

Once you have decided on an idea for the business, you need to choose a business name. The name you choose is critical as this is the first thing customers will see about your business. Your chosen name should be easy to pronounce and spell. The name should also be memorable and stand out from the competition.

On top of all that, your chosen name must comply with Arizona business naming guidelines, as each business structure has different requirements. You can find more information on the naming guidelines on the Arizona Corporate Commission website.

One of the requirements of choosing a name is that it must not be in use already. To check if your name is available, you can search the Entity Search database of the Arizona Corporate Commission website.

Step 3: Write Your Business Plan

The next step to starting a new company in Arizona is to create a business plan. This plan covers every aspect of the business. The plan should be clear and thorough enough that if a stranger took over the business for a day, they would know how your business runs and its vision. A business plan is also used to entice investors to your business.

While there are no set guidelines on what must go into a business plan, it is recommended that you include the following:

  • Information on your product or services. Describe what you are offering, why you are offering it, and how you are offering it. This part of the plan should also explain what makes your business different from those already in the market.
  • Sales and marketing. Describe who your target market is and how you plan on turning them into customers. Describe your marketing strategies.
  • Finances. Here, you will describe exactly how much you need to start the business, how much you will need to sell to make a profit, and where you will get funding.
  • People in the business. Outline the different roles in the business and what skills you will need to fill them successfully.

Step 4: Get Funding

To start a business, you need money, which means getting funding to cover startup costs and running the business. There are several ways of acquiring funds.


Applying for a business grant is an excellent way of getting funds, as you don’t pay the money back. However, strict requirements usually must be met to be eligible for a grant, so be sure to read up before applying.

You can find more information on what grants are currently available in Arizona on the federal government’s grants website.


Applying for a loan is much easier than a grant, but you must pay the money back with interest. Applying for a loan can be done in numerous ways: through banks, special business programs, or even from friends and family. Wherever you get the loan, be sure you have the deal in writing. Even if you’re borrowing from friends and family, money is a sensitive thing, so getting everything in writing beforehand can prevent any conflicts that may arise in the future.

Fund it Yourself

If you have the means to do so, you can fund the startup costs with your own savings and current income. This would be the most stress-free and straightforward method of starting a business in Arizona.

Step 5: Choose a Business Structure

Different business structures work for different business needs. Therefore, choosing a business structure is very important when starting a business. There are four main business structures in Arizona: sole proprietorship, partnership, limited liability company, and corporation.

Sole Proprietorship

A sole proprietorship is an informal business structure where there is no separation between the owner’s personal assets and the business’s. In this business structure, the sole owner is personally liable for the company. The sole proprietorship is a popular structure for small, low-risk businesses.


A partnership is much like a sole proprietorship where there is no separation between the owner and the business. The difference between the two structures is that in a partnership, there is more than one owner.

Limited Liability Company

A limited liability company, LLC, is often used by small businesses as it combines the flexibility of a sole proprietorship or partnership with the added tax benefits and asset protection of a corporation. LLCs are a popular choice for small to medium business owners.

C or S Corporation

Corporations are separate legal entities that multiple shareholders own. While both C and S corporations have more complicated legal regulations, they offer tax exemptions and liability protection. C corporations are typically used for large companies, while S corporations are for smaller companies.

Step 6: Register Your Business

To officially and legally conduct business in Arizona, you must register your business with the state. The method to do so slightly differs depending on what type of business structure you want.

Sole Proprietorship

Because this is not a formal business structure, there are no legal requirements to register this business. You can simply start the business and do business as usual.


To register a general partnership with the state of Arizona, you won’t need to do any formal paperwork. You can simply get started once you have drafted up your partnership agreement. Make sure to get any licenses and permits you might need for your business before you start. And finally, get an EIN and an Arizona State Identification Number to pay Arizona transaction privilege tax.

Limited Liability Company

Registering an LLC in Arizona requires the Articles of Organization to be filled in and submitted on the Arizona Corporation Commission portal. To do this, you will need to create an account first. The Articles of Organization contain all the basic information about your business, including information regarding your designated registered agent. Registering an LLC costs $50.

Once approved, you will be issued an approval letter.

C or S Corporation

Registering a corporation is similar to registering an LLC in Arizona. You will need to complete and submit the Articles of Incorporation with the Arizona Corporate Commission portal and pay the fee of $60. Once approved, you will receive a letter of approval and can proceed with the next steps of forming a business in Arizona.

Step 7: Set Up Your Finances & Accounting

A critical step in starting a business is to set up your finances and accounting systems. Separating your personal assets from the company is a highly advisable business practice. For example, opening a bank account for the business is an excellent way to divide assets and set your business up financially. Take it a step further and apply for a business credit card. Doing so will help you keep track of all business expenses.

Hiring an accountant to administer payroll software and the business’s accounts can help ensure everything runs smoothly, particularly when it draws closer to the tax filing season.

Step 8: Get Business Insurance

Running a business without business insurance is risky and leaves you open to expensive settlements and lawsuits. Therefore, no matter how small your business is, insurance can be the difference between keeping your business and potential bankruptcy. You can choose from so many different types of business insurance plans.

  • General liability insurance: This broad policy is most common amongst small businesses as it covers all the basic needs of a business.
  • Workers compensation insurance: If you have employees, you should take out this insurance to protect yourself and your employees.
  • Professional liability insurance: Medical professionals typically use this type of insurance.

The options can be overwhelming, so if you aren’t sure where to start. Consider talking to a business attorney or broker.

Step 9: Obtain Any Permits or Licenses

While Arizona does not require that businesses apply for a state business license, some cities and counties in the state may need them. Be sure to check what your city’s requirements are.

In Arizona, you may need to apply for three different types of licenses, depending on your business.

  • Transaction Privilege Tax License: This is needed if you sell taxable goods to collect sales tax and must be paid to the Arizona Department of Revenue.
  • Business License: Only certain cities and counties require this license. Check here to see what you will need.
  • Regulatory Licenses: This is for supervised and regulated businesses at both state and federal levels.

Step 10: Build a Website

A business website is an excellent way to build brand recognition, create new leads, and engage with your customers. Building a website is no longer reserved for tech gurus. Nowadays, anybody can make their own website using online website builders.

When building your website, you should ensure that it is not too busy with fonts that are difficult to read. Websites with a clean and neat interface reap the best results as it is easier for people to find what they’re looking for. Also, as an added tip, be sure to link your website to your other business social media accounts.

Step 11: Hire Employees (If Any)

If you know you will need to hire employees in your business, there are state obligations you will need to adhere to. For example, in Arizona, all new hires must be reported to the Arizona New Hire Reporting Center within 20 days of being hired. According to the center, this applies to all employees who work and reside in Arizona.

Step 12: Market Your Business

Marketing your business is the very last of starting a business in Arizona. Fortunately, there are many ways to market your business, and some options can even be budget-friendly.

Here are some ways to market your Arizona business:

  • Have a business website
  • Get on social media, and use mediums like Instagram, Facebook, and TikTok
  • Use Google Adverts
  • Promote your business in the local newspaper
  • Promote your business on the local radio

This is just a start. If you want to focus more on marketing, consider hiring or consulting a marketing specialist.

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