Phoenix, Arizona, has become a thriving hub for small businesses, fueled by strong population growth, innovation, and strategic support from local organizations. The state is home to 611,097 small businesses, which account for 99.5% of all companies in Arizona. Additionally, 1.1 million employees work for small businesses in the state, representing 42.9% of the total workforce, according to Arizona Commerce Authority the small business owners in Phoenix are not only making significant contributions to the local economy but are also setting an example across the nation with their resilience and adaptability.
Small businesses form the backbone of Phoenix's economy. According to In Business Phoenix, In 2024, Phoenix SBOs reported a growth rate of 89%, outpacing the national average of 73%. Notably, 95% of local entrepreneurs recognized the importance of digital tools in driving their success, significantly higher than the national figure of 72%. These tools are essential for streamlining operations and enhancing customer experience, a key focus area for regional businesses.
Entrepreneurial ventures in Phoenix span diverse sectors, including technology, hospitality, and green initiatives. According to the Greater Phoenix Economic Council, local businesses have also capitalized on Phoenix’s low inflation rate, which dropped to 2.7% in 2024, compared to the national average of 3%. This favorable economic environment reduces costs and helps businesses plan effectively for long-term growth.
Phoenix is experiencing significant labor force growth, ranking third nationally between 2012 and 2022 according to the Greater Phoenix Economic Council. The influx of new residents—over 150,000 in two years—provides a robust talent pool. Local SBOs have emphasized the need for digital expertise, with 94% prioritizing employees skilled in modern tools to enhance operational efficiency according to In Business Phoenix.
State and local entities, such as the Arizona Commerce Authority (ACA), have played a critical role in fostering a pro-business environment. In the last fiscal year, the ACA’s initiatives exceeded goals, creating 24,251 new Arizona jobs in the Greater Phoenix area and driving billions in investments according to the Arizona Commerce Authority. Programs targeting workforce development and supply chain enhancements have been pivotal in supporting new and existing businesses.
Phoenix’s small businesses are not just surviving; they are thriving, transforming challenges into opportunities and shaping the city’s economic landscape. By embracing innovation and fostering a resilient business culture, these entrepreneurs ensure a bright future for Phoenix’s economy.