How to Start a Business in Phoenix, Arizona

Date: June 20, 2014

The sprawl of one of the fastest growing cities presents small business with opportunities and challenges.

Phoenix might
be best known for golf courses, tanned retirees and a desert climate, but it’s
also an attractive city for business. Some recent accolades: 

Top 10, Fastest Growing Cities (CNN
Money
, March 2014)

Top 20, Most Innovative Cities in America (Inc.
Magazine, April 2014)

Top 25, Best Cities for Small Business (Biz2Credit, May 2014)

Top 75, Best Places for Business and Careers (Forbes,
August 2013)

“We are very
excited by Phoenix’s business landscape,” says Jason Ebel, cofounder of Warrenville,
Illinois-based Two Brothers Brewing Company, which is expanding its operation
to Phoenix in September. “Everyone at the City of Phoenix [government officials
and those at the Greater Phoenix Economic Council] that we have talked to has
been very engaged and helpful as we have been looking to get our project
started.”

Here are three
tips for launching a business in Arizona’s state capital.

1. 
Take advantage of local resources

Phoenix has
several organizations that can provide help as you get your business off the
ground. Be sure to check out: 

·  Arizona
Commerce Authority
, for a
variety of services and incentive programs for small business or startups,
including Arizona Entrepreneur’s Edge, Small Business Checklist, Arizona
Innovation Accelerator Fund and Venture Madness

· Arizona Small
Business Association
, which hosts
speed networking events, small business accelerators and a business mentoring
program

· City
of Phoenix
, for
information on operating a business in the city, including licensing, zoning,
permits, funding opportunities and more

· Greater Phoenix
Economic Council
, for an
overview of the region’s demographics as well as a business toolkit

2. 
Make all business agreements official

“The most
frequent mistake people make when starting a business in Phoenix is failing to
take precautions to protect themselves legally
,” says Gregory Poulos, owner of
Poulos Law Firm, a business- and estate-planning firm. “In this part of the
country, lawyers often refer to the ‘Arizona contract’ as a handshake. Yes,
there is nothing wrong in trusting people and their word. But if it is not in
writing, your agreement can be misinterpreted, or important representations can
be overlooked.” 

Poulos, who
moved to Phoenix from New York City nine years ago, says the prevailing
attitude of trust in the southwestern city struck him as a huge difference
compared to New York and other major cities. He believes Phoenix’s sprawling
nature helps perpetuate this culture because there is less awareness and
communication of negative business experiences than he has observed in denser
cities.

To protect
yourself and your businesses, Poulos recommends forming a limited liability
company if there is any element of risk, operating the business as a separate
entity from any personal finances (such as mortgages, car loans or personal
credit cards) and developing contracts for clients, independent contractors and
employees. Also, he says, a contract can be formed via email, so take caution
with emailed commitments
and follow up and confirm all such agreements made
from correspondence in inboxes.

3. 
Maintain a full pipeline

“To be
successful in Phoenix, you need to have multiple irons in the fire at all
times,” says Keith Klein, owner of Turning Pointe Wealth Management, who has 16
years of business experience in Phoenix. “Where I have seen businesses fail
here is when they lack activity that creates opportunity and revenue.” 

One reason
for this, Klein notes, is that Phoenix doesn’t have the large base of Fortune 500
companies
that other
major cities have to support the economy. Without a plethora of “whale
clients,” or major clients, small businesses need more clients to make the
business cycle more predictable. While securing a few large clients is
appealing, Klein says that having more clients can
provide diversity and stability.

 

Subscribe For Free News And Tips

Enter your email to get FREE small business insights. Learn more

Get to know NFIB

NFIB is America's leading small business association, promoting and protecting the right of our members to own, operate, and grow their business

Find out more about
NFIB Membership

Or call us today

1-800-634-2669

News

State Issues


Choose Your State

Foundations

YEF Foundation Research Center Legal Foundation

Member Benefits