How to Start a Business in Arizona in 8 Steps (2022)

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Grand Canyon. Beautiful desert scenery. Delicious Southwestern cuisine. These are just a few reasons why Arizona is a great place to live and explore. Add easy and inexpensive business filing to the list and you have a great place to start a business. Below are eight steps to launch your business in the state.

1. Choose a business idea

What is something you are good at or uniquely positioned to provide? Do you have a passion that you are waiting to turn into a career? Asking yourself these questions is the first step to forming a great business idea.

Once you’ve zeroed in on your business idea, the next step is to research your market of choice. Find out what’s missing or new ways to offer existing services. Be patient. Start business it takes time, planning, and hard work.

2. Name your business

Naming your business can be a fun and creative exercise. The best names convey the service provided and the tone of the brand while inviting potential customers to learn more—a tall order. While you work choose a name for your businessconsider bouncing ideas off friends and colleagues.

Then there is the legal and bureaucratic side of naming your business. This part is less fun, but the part that needs to be done business in Arizona. Besides making sure your name hasn’t been taken—you can check the state name registration—you also need to structure it so that it identifies your preferred business structure. For example, if you form an LLCstates require you to include some iteration of “limited” or “liability company” in the name.

Please note that your registered name does not have to be the name you operate. If this is the case, you will need to file a DBA with the state. DBA stands for “doing business as” and simply means that the business name you file is different from the business name you plan to publicize.

Once you’ve settled on a name and registered it with the state—or saved it for future use, you can do so through Secretary of State—locks the website domain name as well as any associated social media handling. Keep in mind: having a web address that is very different from your actual business name makes it harder for potential customers to find you.

3. Make a business plan

All business ownerfrom the first time small business beginners to serial entrepreneurs and seasoned operators—need a business plan to lay out their vision and attract investors. An effective business plan usually includes the following elements:

• A basic description of what your company does
• Details on you business structure
• A breakdown of the markets in which your business operates and why your business has a unique path to success in that market
• How do you plan to reach your target audience?
• Financial plan

Shopify has some differences business plan template you can choose from depending on your specific needs, as well as some example of a business plan you can draw from for inspiration.

4. Determine the business structure and combine

The type of business structure which you choose depends on, among other considerations, how you plan to raise funds and whether your company will take on debt to grow. You also need to determine the type of tax entity that is most appropriate for your business.

Sole business

The simplest business structure is single business, a business with one owner (ie, you), where you take on and are responsible for all the risks and debts of your business. In other words, the business is you. This also applies to taxes: a sole proprietorships the income is considered personal income, and you pay personal income tax on it.

LLC

An LLC, or limited liability companies, offer protections that a sole proprietorship does not have by separating the business owner from the business entity. If the LLC is sued or in debt, the owners may not be personally involved, as long as they have separated their business finances from their personal finances. From a taxation perspective, most LLCs are pass-through organizations, meaning that business profits pass through to the owners as personal income—just like in a sole proprietorship.

Corporation

On the more complex end of the spectrum, you can set up a C corporation. This allows you to sell shares of your company as a means of raising funds and comes with liability protection, as the business is a separate entity from its owner. But companies also have to pay their own income tax, unlike a pass-through structure. In Arizona, that amounts to a 4.9% corporate income tax, in addition to 21% at the federal level (through 2021). Companies also require more administration to maintain.

If none of the above meets your specific needs, there are still other structural options you can choose when setting up your business.

Incorporated in AZ

Once you’ve chosen a business structure, it’s time to incorporate. This involves:

• Obtain an EIN. Unless you choose a sole proprietorship, in which case you can file taxes using your Social Security number, you’ll need an employer identification number, or EIN, for federal tax purposes. Request one from the IRS is relatively easy, regardless of your business type.
• Register with the AZ Corporation Commission. At the state level, you need to register your business with Arizona Corporation Commission to operate. ACC provides prospective business owners with formation document they need, like articles of organization (in the case of an LLC) and articles of incorporation (in the case of a corporation)through this online portal.
• Choose a statutory agent. The state requires you to designate who will be the statutory agent of your business. This agent is the one who will receive any mail or legal documents from the state related to the business.

5. Get a business license and permits

Arizona does not issue statewide business licenses, but individual local governments can. For example, Phoenix regulates alarm businesses, massage therapists, and entertainment-related endeavors more strictly (among several others), and requires you to obtain a practice permit from the city. You can use state Checklist to find out what those regulations are, as well as any other information you may need to comply with local governance.

Transaction privilege tax

Another licensing issue to keep in mind in Arizona is transaction privilege tax (TPT), levied by the government in lieu of sales tax. If you sell products, check with Arizona Department of Revenue to see if you need a TPT license. Some businesses that need to have a TPT license include retail, hospitality and contracting; applying one costs only $12. If you need to apply for one, you can register and pay your TPT online.

Professional licensing

Depending on your profession, you may also need permission from a governing body to practice. In Arizona, these professions include nursing, lobbying, teaching and real estate. If this is the case, you license need to be organized before you can start practicing.

6. Look business insurance options in Arizona

If you (the owner) will be the sole employee of your business, Arizona does not require you to have business insurance. But if you plan hire workers, you become an employer and are required to pay workers’ compensation insurance. state save list insurers that offer this coverage.

Some other types of insurance that are not required but you may want to consider include:

Vehicle insurance. If you use your personal vehicle for business, you may want to consider business-specific insurance, as your personal policy may not cover work-related accidents.

Liability insurance. Liability insurance may protect your business if someone sues you for damages or work not done properly.

Commercial property insurance. Commercial property insurance can help protect both the property you operate as well as any equipment or machinery you use in the course of your work.

7. Understand financial considerations

Once your business plan is in order, you should understand your costs and the path towards funding your operation. This might mean allocating money from your personal savings, funding your first product launch or asking for angel investment. If you lack start-up money, Shopify capital provides financing for small businesses with flexible repayment plans.

8. Market your business

When it comes to marketing, word of mouth is a good start. But to really grow your business, you need a marketing plan. This will cover all the strategies you will use to attract potential customers. This includes:

• Advertising and promotion. Advertise your brand and products through digital means or in person.
• social media. Using social channels like Instagram to promote your products.
• Public relations. Reach out to local—or even national—media outlets to expand your reach.
• Customer acquisition and retention. Build relationships with your customers using channels like email.

Final thoughts

Remember, the state of Arizona want you to start a business there. That’s why it’s easy to offer resources like this Checklist to help you through the process. With a systematic approach and a solid plan, getting your company off the ground is not only possible, it will happen.

Frequently Asked Questions Starting a business in Arizona

What are the requirements to start a business in Arizona?

Arizona requires new businesses to file with the Arizona Corporation Commission and identify a statutory agent. This person acts as the point person for state correspondence and legal matters.

Do I need a business license to start a business in Arizona?

The state of Arizona does not require a general business license, but your local municipality may require a permit to operate certain types of businesses within the city, such as liquor stores, massage parlors and betting operations.

What are the advantages of starting a business in Arizona?

One reason to think about starting a business in Arizona is that the state’s filing fees are relatively low. In some cases, you can expect to pay under $100 to set up your business with the state. Additionally, the state does not require a business license to operate.

source: https://www.shopify.co.id/blog/how-to-start-a-business-in-arizona