Least Expensive Phoenix Area Cities to Open a Business

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As a new or expanding company owner, there are many crucial aspects you should research before you open a business. One of these things is undoubtedly choosing an inexpensive area for your business to thrive in. However, the Phoenix area is quite diverse and it can be difficult to pinpoint which neighborhood will be best for your company. Before you put down roots in Phoenix AZ, consider consulting a local on the different taxes or licenses, average revenue, and crime rates for the area you are evaluating. Here is a breakdown of how some of the top 5 cities in Phoenix rank from best to worst as a place to build your business in.

#1. Open a Business in Scottsdale AZ

If you’re familiar with the Phoenix area, this city arriving at the top of our list should come as no surprise. Scottsdale has consistently been a great place for startup companies and big businesses since 2010. In 2015, it was recorded that 13,000 companies had made at least $5 million in annual sales. Not only is it a city that has good potential for companies to succeed in, but it’s also quite safe and easy to maintain a business here. According to NeighborhoodScout, Scottsdale crime rates show to be safer than 27% of U.S. cities. You only have 1 in 546 of a chance of becoming a victim of a violent crime, and 1 in 44 of a chance becoming a victim of a property crime. These are positive statistics that can reassure you that your employees and business will not be in any danger. Plus, registering your business in Scottsdale is quite simple as all they require is a Service or Merchant Business Registration License. As long as you have that and an annual permit for any business security alarms, you can open a business with ease in this thriving city.

#2. Chandler

In the past few years, Chandler has risen up as a strong competitor for the best Phoenix areas to open a business in. With low unemployment rates and high future job growth rates, this city is ideal for startup businesses that aren’t receiving the same type of generous funding that those in Scottsdale might be. With a youthful and growing population of 247,477 residents, Chandler is a prime location to open a business that caters to a 30-year-old demographic. It is safer than 31% of U.S. cities, and your chances of becoming a victim of a violent crime are only 1 in 532, and your chances of becoming a victim of a property crime is 1 in 48, which is even better conditions than what bigger cities like Scottsdale and Tempe have to offer.

Starting a business in Chandler is easy as well, as you only need to obtain a Chandler business license from the Tax and License division. Depending on your company, you may have to register for other licenses such as a liquor license or health permit. Chandler also has a Transaction Privilege Tax program that may be different from other cities or states, but is common for most Arizona cities to taxpayers to pay to. However, due to Chandler’s popularity increasing, the prices for their office spaces have also increased in the past 2 years, which is why it’s pivotal to establish your business there now to avoid more price spikes.

#3. Tempe

Home to Arizona State University, this city is full of young flourishing entrepreneurs and a plethora of unique businesses. There is a great incentive for working in Tempe, such as the Arizona Commerce Authority which provides Quality Jobs Tax Credit Program, Job Training Programs, Renewable Energy Tax Incentive Program, Foreign Trade Zone Programs, 9,000 Corporate income tax credits per job, and a 10 percent Reduction in Commercial property taxes.

It’s found that the businesses that do particularly well in Tempe are those that are involved in high tech services, manufacturing, retail, and financial services. To open a business in Tempe means that you are required to have a special regulatory license or permit, and some businesses also require a Privilege Tax License. The only downside to starting a business here is that Tempe is only considered 5% safer than other U.S. cities. Your chances of becoming a victim of a violent crime is 1 in 233, but your chances of becoming a victim of a property crime are 1 in 20. So while your small businesses has a greater likelihood of succeeding and producing a high revenue, office security should take priority if you are considering to move your business to this location.

#4. Peoria

If you’re looking for a safer neighborhood to open a business, Peoria may be the perfect city for you. Not only is it 33% safer than other U.S. cities, but it also has seen tremendous job growth in the past year. To operate a business in Peoria may require a Peoria Business License and a Transactions Privilege License if applicable. Other eligible licenses include a secondhand Dealer License and a Peddler/Vendor/Solicitor License. Because Peoria is full of great education districts and entertainment districts, you will receive plenty of business from locals and tourists alike. If you’re able to plant the roots of your business in this city, you’re likely to face some tough competition but also have a fair chance with a high 2-year survival rate for small companies.

#5. Phoenix

The last city to open a business in on our list is the city of Phoenix itself. There’s no doubt that Phoenix is an incredibly popular city full of booming businesses, new and old. It’s recent job growth rate of 3.17% and statewide AZ minimum wage raise shows great promise for your business to gain new and experienced employees. Phoenix also does not issue a general business license, and only requires a license for certain Phoenix regulated programs and activities, along with SDBE certification for companies they apply to. One of the downsides growing your business in this city is that it is only safer than 10% of other U.S. cities, with high chances of becoming a victim of a property crime. Much like the Tempe area, Phoenix shows grand potential for new businesses but must be approached with caution in regards to the safety of your work.

How PayTech Can Help You Choose the Right City

Each city has its own unique set of standards when it comes to their business environments, which is why it’s so imperative to have local knowledge of the area you’re considering to start your business in. While some places may have the right population and audience for your type of work, the bad crime rates may weigh heavier and make you prioritize the safety of your company and employees first. If you’re a new company in Phoenix AZ, PayTech can offer additional help in making sure your business is in compliance with your cities business regulations. With this assistance in your business finances, payroll, or HR support, you can pay more attention to making your company thrive in its new habitat. For more information on how PayTech can benefit your business, contact one of our team members at (602) 900-8807.

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