Looking to start a business in a well populated and business friendly climate? Consider making Phoenix, Arizona home to your office space. The city boasts a population of approximately 1.6 million people as of 2013, making it the 5th most populous city in the United States. And it has already been projected to reach the 4th most populous city in the nation by 2020.
The city has recovered exponentially the past several years since the Great Recession that began around the end of 2007 to about 2009. Downtown Phoenix especially has experienced rejuvenation with a large number of stores, restaurants, and businesses opening or relocating to the area.
But before jumping at any business location, it is important to research some of the key aspects of doing business in a particular state or city. I will highlight three reasons Phoenix might be a fit for your business endeavor.
1. Thriving Business
Phoenix is a prime location for businesses of all sorts, as it provides a low cost operating environment, as well as the talent businesses need to succeed. Educational institutes like Arizona State University, Maricopa Community Colleges, and Northcenteral University attract a vast pool of young thinkers to the area, perfect for businesses looking to expand and grow their teams.
While Phoenix saw some rough years, 2012 brought major change for the better after the Recession. The Bureau of Economic Analysis showed the top 10 industries in Phoenix to be:
- Real Estate ($31B)
- Financial Services ($21.3B)
- Manufacturing ($16.8B)
- Healthcare ($15.7B)
- Retail ($14.9 B)
- Wholesale ($12.9B)
- Professional Services ($12.8B)
- Construction ($10.4B)
- Waste Management ($9.1B)
- Tourism ($6.8B)
Not in one of those industries? That’s okay. The large population provides opportunities for nearly all industries. And as a result of this many large businesses have picked Phoenix as their main headquarters originally, or eventually made the move to this particular city. Some of these corporations include:
- Republic Services
- Apollo Education Group
Several other large operations, including WalMart, Bank of America, JPMorgan Chase, Safeway, and Target also have major business centers based out of Phoenix.
2. Business Incentives
In addition to offering several valuable resources to grow your Phoenix business, Arizona has recently passed new incentives to help promote a business-friendly environment and encourage new business, or business moves. These tax incentives and programs include:
There are two types of grants under this category:
The Net New Grant - This grant is for an employer who is creating new jobs. The employer can apply for a grant to be reimbursed for up to 75% of eligible training expenses.
The Incumbent Grant - This grant is for an employer seeking to supplement its current training plan and increase the skill level of its employees. An employer may apply for a grant to be reimbursed for up to 50% of eligible training expenses.
Quality Jobs Tax Credit
This credit is to encourage business investment and the creation of high-quality employment opportunities within Arizona. This is accomplished by providing tax credits to employers creating a minimum number of net new quality jobs and making a minimum capital investment in Arizona.
Arizona Competes Package:
- Starting in 2014, corporate tax rate steadily decrease to 4.9 percent.
- Starting in 2014, Sales Factor ramps up to 100 percent.
- Reduces commercial property taxes by 10 percent.
3. Fair Wage Laws
Hiring employees can bring a whole new level of complexity to your business, so it is always important to understand any wage or labor laws a state (or city) might have. Arizona’s wage laws are typically as follows. Be sure to check double check with the state as these laws may change if you do intend to hire someone for your Arizona based business.
- Employers must pay employees at least 16 days apart, typically twice a month.
- An employer must pay on or before the scheduled pay day, regardless of holidays or other factors.
- Employers can only pay employees once a month if their principal place of business is located outside of Arizona, as well as its payroll system and those employees fall under specific requirements as designated under other certain factors.
- Minimum wage is $7.65 per hour.
- There is no overtime law in Arizona.
Choosing a city to base your business in is not only exciting, but often daunting. Learning as much as possible about a states incentives and business laws can ensure that you make the most informed decision possible before beginning your business adventure.
Photo Credit: "PhoenixDowntown" by DGustafson - Own work. Licensed under Public Domain via Wikimedia Commons.