How do I start a startup in Arizona? I hear the question a lot. So today, we’ll kick things off by looking at a handful of new Arizona startups and then review a quick step-by-step guide to starting a startup in Arizona.
The Pandemic Was Good for Arizona’s Startup Economy
Covid-19 sucker-punched the globe, but it wasn’t all bad for Arizona. Many people in the area took the opportunity to transform their side-hustles and hobbies into startups. On the corporate end of things, many folks who transitioned into remote-working roles left prohibitively expensive urban centers, like Chicago, New York, and San Francisco, and settled in Arizona.
Take Jeni Himmer. At the beginning of the pandemic, she quit her 9-to-5 at a call center, rolled up her sleeves, and embarked down the startup path. She named her new company Radnaut, a portmanteau of “astronaut” and “rad” to represent the idea that she is an “explorer of all things rad.”
Himmer’s Arizona startup currently has three arms: an online artist showcase, a printing service, and a booth at The Mercantile in Old Town Scottsdale.
Katie Kahoun of Crafting Goddesses is another pandemic-inspired Arizona startup entrepreneur. She also maintains a booth at The Mercantile after selling wares on Etsy for years. After she “started embracing what [she] loves to do,” Kahoun also added workshops to her offerings.
How to Start an Arizona Startup
Are you like these self-starting Arizonans? Are you ready to start your Arizona startup? If so, follow the step-by-step guide below.
Arizona Startup Step One: Register — Make it official and register a business entity. In Arizona, you can choose between a sole proprietorship, limited partnership, limited liability partnership, limited liability company, C corp, S corp, B corp, closed corporation, and nonprofit. Read about the pros and cons of each Arizona business structure here.
Arizona Startup Step Two: Protect Intellectual Property — These days, intellectual property is worth its weight in gold. Protect it! Doing so doesn’t cost much, but it could save you headaches and heartbreak down the line. Too many people skip this step and live to regret it. Don’t make the same mistake.
Arizona Startup Step Three: Business Plan — Draft your corporate plan. If you’ve decided to register as a sole proprietorship, you can skip this step. But if you opted for a partnership or corporate model, it’s wise to draw up a simple charter that delineates each principal’s stake. Financial vehicles, including shares and options, should also be defined.
Arizona Startup Step Four: Contracts — If you’re working with freelancers or vendors, you’ll need contracts. Again, don’t skip this step. If conflicts arise, and they frequently do, having a formal document can save you loads of time and money. The couple hundred dollars it will cost to get a set of air-tight lawyer-drafted terms, contracts, and agreements is much less than the thousands of litigation dollars it could cost without them.
After you’ve completed these four steps, the foundation for your Arizona startup will be set. From there, you can look at how to best position yourself to pay fewer taxes and scale responsibly.
Get Help Starting a Startup in Arizona
If you need some help sorting through legal red tape related to your startup, get in touch. The Kelly Law Firm has helped countless businesses and entrepreneurs in Arizona and across the country realize their dreams by getting their businesses off the ground.
Not only can we handle all the paperwork, including business and intellectual property registration, but we can help structure your business to ensure both asset protection and optimal profitability.
