Starting A Business In Arizona.

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by Bill Borden
Founder of ArizonaCircle.Com

Running a business anywhere is more difficult than it was a few decades ago unless you're a large corporation outsourcing labor and importing/manufacturing goods outside of the United States. If you're a small or mid size business, then your success will depend upon the nature of your business, who your customers are, and location.

Most of my experience has been in the Phoenix metro area in the late 1980's and from 2001. I left Arizona from 1991 to 2001 but not much has changed. Phoenix is a very competitive market and incomes are relatively low compared to other areas of the country. Also there's a seasonal element when operating a business in Phoenix. During the hot summer months, residents typically do their best to get out of the heat. Some go up north to Prescott, Sedona, and Flagstaff.. Others leave the state all together.

Phoenix also gets a large influx of people visiting from northern states and Canada from Nov 1 to Apr 30.. They also go back north for the summer.

If you're making things in Arizona and selling them elsewhere, then locating your business in Arizona might be attractive in places where land is cheap. Wages are lower in Arizona and your company may benefit.

Most of my experience has been in small business but I was a business broker for a couple of years so I have some experience with mid size businesses.

I've found that the best months in Phoenix are generally from the end of October to the end of April. Then it get's really quiet during the summer.

Another aspect is the transient nature of Phoenix. Some have lived here all their life and are loyal to certain businesses, but because people move in and out of the city or from one end of the city to the other, it's not as easy to attract loyal repeat customers that will stick with you for the life of your business. The Phoenix metro area spans 50 to 60 miles. For some types of businesses such as big ticket items people are willing to travel. But for many other types of business people will not travel out of their neighborhood.

That's another thing to consider. The way Phoenix is laid out, there are many self contained areas. In other words everything people need are located in their neighborhood. There is no reason to go out of their neighborhood unless you have something that's not offered in their area. Even then most people are reluctant to travel. They may prefer to order online and have items delivered to their home than travel more than 10 minutes from their house.

Once again it depends upon your business. If your business is online or you don't depend upon selling goods or services in the Phoenix area, then you may benefit from lower operating costs. But if you depend upon selling locally, then you should consider the dynamics of running a business in Phoenix. It's much different than other areas of the country.

In spite of everything, some businesses flourish in Phoenix and Arizona in general. Why? Because they have a niche, they have a good reputation for quality and good value, they make it easy for customers to buy and return items if they're not satisfied, they sell consumable products, etc. ...

What I would suggest is do a thorough market analysis before moving your business to Arizona and especially Phoenix. If you're a small business, then start small if that's possible. Get to know the area. Do a lot of driving. Talk with a lot of people, both customers and competitors. So many businesses fail because the owners were overly optimistic or didn't do their homework.

If you can start your business from home first that's ideal. If that's not possible, then signing a long term lease is risk. Do what you can to keep your overhead low. Consider working for a competitor if you can. Once you see all the challenges your employer faces, you'll be better prepared to start your own business.

If you're a professional, free lancer, or a one person business and need office space, consider an executive suite where you have a small office and share common areas. Some professional centers have different packages and no long term commitments. You might be able to pay by the hour for office and conference space when you meet with clients.

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