1. Make a Business Plan
2. Form the Business
3. Get Licenses and Taxes in Order

When doing business in Arizona, business owners must do several things in order to be considered in good standing with the state. Any company in good standing with the state of Arizona is legally permitted to conduct business within the state's borders, whether as a domestic or foreign business.

Make a Business Plan

The first step to starting any business should always be a business plan. There are enough moving parts involved in a business startup that even the most organized person will benefit from forming a plan ahead of time, and investors and partners will trust your intentions and abilities based on the quality of your plan . Some of the things you'll want to lay out in your plan include:

Figuring out your target markets or market depends on what you're planning to sell or offer. Ask yourself who your product or service specifically applies to. Consider these demographics when determining your target market:

  • Age.
  • Gender.
  • Location.
  • Income level.
  • Occupation.

Understanding your market helps you reach the people in it. Certain age groups are best reached via social media, while others are best reached through television commercials or mailings, for instance.

"Market need" refers to what you're hoping to provide for your market. The product or service offered by your business should meet a need of some kind. If you're hoping to open a restaurant, maybe your target market doesn't have many options for the cuisine offered by your business in their area; therefore, you'd be filling that need.

A mini-pitch and USP are a way of getting the goal of your business on paper in a complete and concise way. Usually a mini-pitch is a few sentences and a USP is an even shorter version of that.

Your business's milestones are its plans for the future. Figure out where you hope to see your business in the next five years, 10 years, and more. This will help you decide many things, such as the type of business structure you might choose. A marketing plan will help you decide on a marketing budget. Understanding your target audience is vital to creating a solid marketing plan.

Form the Business

Before you can do business in the state of Arizona, you'll need to form your business. You have a few options for types of businesses recognized in the state. They include:

  • LLCs (limited liability companies).
  • Corporations (S corporations and C corporations).
  • Sole Proprietorships.
  • Partnerships.

LLCs are one of the simplest business structures to form, and they offer liability coverage for their owners. In order to form an LLC in Arizona, you'll need to register with the state through the Secretary of State (SOS) website. There will be a filing fee and a few required documents to submit.

Corporations are ideal for businesses that hope to gain many investors. C corporations are best for growth on a larger scale and even internationally, while S corporations keep things a bit smaller. This business type requires business owners to follow many rules and regulations, and there's a strict structure to the company. Corporations will file articles of incorporation with the state and also pay a fee.

Sole proprietorships are very easy to form, but don't offer much in the way of liability protection for owners. This structure type doesn't have to file with the state, but they might want to file a DBA (Doing Business As) notice in order to keep an owner's personal life and business somewhat separated. Partnerships are also fairly simple to start, but are more like LLCs in their state requirements.

Get Licenses and Taxes in Order

In order to be considered in good standing with the state of Arizona as a business, you'll want to make sure you have all of the required licenses and tax forms filled out and filed. Certain business types will require licenses, so it's best to check with the state or with an experienced business formation lawyer to be sure you're compliant.

Keep in mind that you will likely need to file federal, state, and local taxes for your business, just like you do for yourself. Certain business structures do not require taxes to be filed for the business itself; the profits pass through to owners who pay taxes themselves on those profits. Again, the best way to make sure you're following the proper tax requirements is to ask a business lawyer for help.

If you need help with doing business in Arizona, you can post your job on UpCounsel's marketplace. UpCounsel accepts only the top 5 percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law and average 14 years of legal experience, including work with or on behalf of companies such as Google, Menlo Ventures, and Airbnb.