Arizona Small Business Statistics

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Last updated February 17, 2023
Written by Dmytro Kondratiev
Editor, lawyer
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The sixth-largest US state, Arizona had a GDP of $337 billion in 2021 showing a 5% growth as compared to the previous year. Though lower than that of the top US economies, the GDP of the Grand Canyon state is higher than in some countries such as New Zealand.

Arizona takes the 4th position in the “Best States for Business” rating made following the Executive Magazine economic survey. Pro-business regulations, lower running costs, lower taxes, and high life quality make the state confidently stand out.

Infusing over $191 billion into the state economy, small enterprises (SMEs) are an essential driving force for the recent development and growth of the state’s economic activity. Take a look at a quick overview of SME statistics for the Grand Canyon state.

Key Arizona Small Business Stats

  • Following the SBA 2021 report, Arizona numbers 611.000 SMEs showing a 3% increase since 2020 and making 99.5% of all businesses in the state;
  • SMEs pump $5.6 billion in a $23.2 billion AZ export, which is 24% of the total export value;
  • About 490.000 SMEs in AZ are self-employed entities;
  • Smaller companies employ 1.1 million workers, which is around 43% of the total 2.9 million workforces in AZ;
  • According to BLS, SMEs have generated 42.360 net new jobs, which equals 72.6% of all new employment in 2020. The growth tendency has been observed in 2021 as well;
  • The highest job gain is created by SME employers with 20 to 100 workers;
  • The average income of self-employed private company owners in AZ lingered at $52.000 while the average per capita income rate was at $55.485 in 2021;
  • SMEs contribute over $71 billion in wages annually and deliver over $10 billion in state and local taxes per annum;
  • The professional, scientific, and service sector has the biggest SME count, with over 88.000 private companies in it;
  • The least popular industries for SMEs in AZ are utility and company management sectors, with 431 and 350 entities engaged in them accordingly;
  • The highest employment level across the state is in the health care and social services sector featuring over 167.000 workers.

Top 10 Industries for Small Business in AZ

Industry Company Count
Professional, scientific, and technical services88.875
Real estate, rental, and leasing 72.827
Other services (excluding public administration)65.964
Administrative, support, and waste management56.028
Healthcare and social services54.302
Retail trade50.777
Transportation and warehousing49.490
Entertainment and recreation28.779
Finance and Insurance19.269

AZ Small Business Demographics

  • Women own 224.252 smaller companies in AR, with 89% of entities being non-employers;
  • Men own 315.902 SMEs, with 85% of companies being non-employers;
  • SMEs with ownership shared between men and women account for only 36.985 companies making around 7% of all SMEs in the state;
  • Female employees make 46.6% of the total workforce;
  • Veteran-owned businesses comprise 8.1% of SMEs and veterans make 6.4% of the total workforce in AZ;
  • Hispanics control 19.1% of SMEs and account for as many as 31% of AZ employees;
  • Other racial minorities account for 10.7% of AZ micro-companies and represent 19.1% of the workforce;
  • The total number of self-employed minorities in AZ is 122.590 which equals 1.68% of the state population.

AZ Small Business Formation

  • Arizona is a growing economic environment welcoming new businesses onboard and demonstrating steady economic rise and SME count gain of nearly 3% annually within the recent 5 years;
  • With limited liability companies taking the lead among SMEs, starting an LLC in Arizona is as simple as filing the company statute with the state and paying a $50 filing fee or an $85 fee to expedite the process;
  • To eligibly run your business, you should stay compliant with the state by maintaining a registered agent in Arizona and paying an annual reporting fee of $45;
  • Self-employed LLC owners will be exposed to a personal income tax capped at 2.59%-4.5% depending on the income amount;
  • A corporate income tax in AZ is 6.9%, which is a lower rate as compared to many other US states with rates jumping as high as 10% and more;
  • Vendors operating on the AZ territory will incur a transaction privilege tax (TTP), which is actually a charge for doing sales in the state. It’s what is referred to as a sales tax in other states, yet, a TTP rate in AZ is not fixed and varies by locality;
  • Statista reports consistent and noticeable salary growth in AZ within the recent years, with an average hourly wage hitting the $28 mark;
  • The only thing that can hinder SMEs from succeeding in Arizona is limited access to startup funding.


  1. Arizona Small Business Economic Profile 2021
  2. How Many Small Businesses Are There in Arizona?
  3. Chamber Business News