The U.S. is regarded as the land of opportunity. Small businesses have been the backbone of the United States’ thriving economy for decades. Most businesses that are started begin with a dream, someone’s lifelong ambition, which then turns into a small business.

While Arizona boasts one of the most comfortable climates in the entire nation, attracting retirees and snowbirds alike, state lawmakers have also worked hard to make it an inviting business climate as well.

The Grand Canyon State is considered to be one of America’s strong economic powerhouses. Over the past several years, it has been consistently voted as one of the best states for business due to the government’s pro-business approach, lower business running costs than most other states, having a comparatively large workforce, low and competitive tax incentives, and a brilliant quality of life.

Number of Small Businesses in Arizona

So, how many small businesses are there in Arizona? There are 592,485 small businesses in Arizona, according to the latest figures (2020) from the SBA.

It is not just Americans and Arizonans starting small businesses in Arizona; the state also attracts foreign entrepreneurs. There are 81,212 immigrant entrepreneurs in Arizona that account for 22% of all self-employed Arizona residents.

The following bar graph shows the number of small businesses in Arizona in 2016, 2017, 2018, 2019, and 2020.

How many small businesses in Arizona

Of the 592,485 small businesses in Arizona in 2020, there is a wide array of different enterprises from small, one-person sole proprietorships or LLCs to much larger businesses with several hundred employees. If you want to join the 592,000-plus small businesses in Arizona, it is fairly easy to register a business in Arizona.

To be a small business in Arizona, you have to qualify as one. So, to operate as a small business in Arizona, you must have a company with less than 500 employees.

Let’s take a deeper dive into the number of small businesses in Arizona by looking at the top industries, business owners, employees, and more!

Small Businesses in Arizona 2020 overview

  • Small businesses equate to over 99.4% of all businesses in Arizona.
  • There are 592,485 small business employees in Arizona, which is 43.5% of the states’ employees.
  • In 2019, Small Businesses in Arizona added 44,301 new jobs!
  • Small businesses employing 20-99 employees created the most job gains!
  • There are 122,590 self-employed minorities in Arizona demonstrating the diversity in the state.
  • International trade is a part of Arizona’s economy, and there are 6,742 small business exporters in Arizona.
  • There are more professional, scientific & technical services small businesses in Arizona than any other type – 84,588.
  • Real Estate and Rental Leasing firms make up the 2nd largest number of small businesses in Arizona – 70,877.

Top 5 small business industries in Arizona

How Many Small Businesses in Arizona?

Over 592,000 is a lot of small businesses to be registered in any one state, but when you look at the size of the Grand Canyon State, economy, and influence on business, it is hard to argue why so many have chosen Arizona. Compared to the rest of the U.S., the total number of small businesses in Arizona is 1.87% of all U.S. businesses. There are 31.7 million small businesses in the U.S.

The number of small businesses in Arizona has been growing over the past several years. In 2017 there were 538,552 small businesses, which increased to 553,779 in 2018, representing a 2.82% increase. In 2019 there were 571,495 small businesses in Arizona, 17,716 more than the state had in 2018, representing a 0.92% increase.

From 2019 to 2020, the number of small businesses in Arizona rose again, to 592,485. This is the largest increase in percentage terms over the past five years (3.67%) and demonstrates why Arizona has a strong economy.

Arizona has an incredible amount to offer employers, employees, companies, and entrepreneurs from all over the world continue to move to the state due to its manageable taxation system, access to large consumer markets, international access by land, and air, world-class infrastructure, a low cost of living when compared to other metropolitan areas of the U.S., a strong and evergrowing economy, and expanding labor market.

If you would like to download the latest 2020 Small Business Profile on Arizona from the U.S. Small Business Administration, Office of Advocacy, the full Profile can be downloaded here.