Arizona is the sixth largest and 14th most populous state in the US and, with a gross state product of around $321 billion, the Grand Canyon state has a larger economy than countries like Ireland and New Zealand.
The state has been one of the fastest-growing states in the nation. Its low tax rates and limited regulations along with sunny weather and a low cost of living have made it a draw for businesses, particularly small businesses (SMB).
Micro-enterprises or small businesses make up a large percentage of businesses in Arizona. They are crucial to the continuous growth of the state’s GDP.
Here are some fascinating statistics about small businesses in Arizona:
- There are 592,485 SMBs, an incredible 99.4% of all Arizona businesses.
- Micro-enterprises employ a total of 1.1 million people, that’s 43.5% of all employees in the state.
- There are 122,590 self-employed minorities, that’s 1.68% of the general arizona population.
- The major disadvantages of making a real success of a small business in Arizona are the difficulties of accessing startup and growth capital and the state’s low personal income per capita.
- The tax burden on Arizona’s small businesses is generally manageable. The state sales tax is capped at 5.96%, the corporate income tax rate is 6.9% and the personal income tax rate is between 2.59% and 4.5%.
- If an SMB sells physical goods to Arizona residents, the business owner needs to apply for a transaction privilege tax which is another irritating, minor barrier to entry.
- Arizona’s micro-retailers rank 2nd nationally for foot traffic.
- SMBs generated 27% of Arizona’s $21 billion in total exports. Most of these exports include storage units, furniture, potato chips, peanut butter and nail polish.
- Self-employed individuals running their own incorporated businesses have an average median income of $51,000.
- The healthcare and social assistance sectors have the lion’s share of SMB employment with a total of 167,165 employees.
- Arizona state law requires that every new business designates an Arizona registered agent that will be available during regular business hours at a physical address within the state’s borders.
- Small firms in mining, quarrying, oil and gas extraction have a pretty low number of SMB employment with only 1,594 employees.
- But the winner are the mining, quarrying, and oil and gas extraction sectors with only 1,254 SMBs.
- Not surprisingly, there are 84,588 SMBs engaged in the professional, technical and scientific services sectors. These are by far the largest industries in Arizona.
- SMBs created 44,301 new jobs in 2019. Firms with fewer than 20 employees account for 25,320 of these new jobs.