Best Arizona Cities for Small Businesses

Choosing the correct city can make all the difference for small business owners looking to thrive. From economic opportunities to business-friendly policies, location plays a crucial role in shaping success.

To help entrepreneurs find the best places to set up shop, the B2B Reviews Research Team analyzed key factors—including city/state population, employer firms, county sales tax rate, and average commercial real estate rent—to determine which cities in Arizona offer the strongest environment for small businesses.

As the state continues to grow as a hub for innovation and entrepreneurship, our rankings highlight the cities leading the way and areas with room for improvement. Whether you’re launching a startup or expanding an existing business, these insights can help you decide where to plant your roots.

Check out our methodology for a closer look at how we determined our rankings.

Top 10 Cities in Arizona for Small Businesses

1. Chandler

The best city overall for small businesses in Arizona is Chandler. With a total weighted score of 88.16 out of 100, Chandler stands out for its strong business environment and growing economy. The city ranks 3rd for the most significant percent population increase from 2020 to 2023, signaling a rising demand for goods and services. Additionally, Chandler boasts a low county sales tax rate and is ranked 4th in the state, which helps reduce costs for both businesses and consumers. These factors make Chandler a prime destination for entrepreneurs looking to establish and grow their ventures.

• City population: 280,167
• City population as a percentage of the state: 3.69%
• Percent Increase of Population from 2020-2023: 17.77%
• Percent of Employer Firms: 5.05%
• County Sales Tax Rates: 11.90%
• Average Commercial Real Estate Rent per Square Foot: $19.96

2. Peoria

Peoria is second overall among the best cities in Arizona for small businesses, offering a strong foundation for entrepreneurs. As the 8th most populated city in the state, Peoria provides a solid customer base while still experiencing steady growth, ranking in the top 20 for population increase from 2020 to 2023. Additionally, the city is a cost-effective choice for business owners, with some of Arizona’s cheapest average commercial real estate rents ranked 6th overall.

• City population: 198,750/li>
• City population as a percentage of the state: 2.62%
• Percent Increase of Population from 2020-2023: 3.52%
• Percent of Employer Firms: 2.52%
• County Sales Tax Rates: 11.90%
• Average Commercial Real Estate Rent per Square Foot: $15.10

3. Phoenix

Phoenix stands out as a powerhouse for small businesses, offering entrepreneurs a dynamic and competitive environment, and comes in third overall. As the most populated city in Arizona, it provides a vast customer base and access to a diverse talent pool. Phoenix also leads the state in the percentage of employer firms showcasing its strong business presence and entrepreneurial activity. Additionally, the city benefits from a low county sales tax rate, ranked 4th, helping to ease the financial burden on businesses. However, Phoenix has higher operational costs, as commercial real estate rents rank 26th in affordability, making it a pricier option for startups and small business owners looking for office or retail space.

• City population: 1,650,070
• City population as a percentage of the state: 21.76%
• Percent Increase of Population from 2020-2023: 3.52%
• Percent of Employer Firms: 25.17%
• County Sales Tax Rates: 11.90%
• Average Commercial Real Estate Rent per Square Foot: $26.61

4. Goodyear

Goodyear is emerging as a strong contender for small businesses in Arizona, offering both growth potential and affordability. Goodyear’s rapid growth, ranking 7th for population increase from 2020 to 2023, signals a thriving economy and increasing business demand. Additionally, the city supports entrepreneurs with a top 15 ranking in the percentage of employer firms and affordable commercial real estate, ranking in the top 20 for lowest average rent. These factors make Goodyear an attractive option for business owners looking to establish and scale their operations in a growing market.

• City population: 111,805
• City population as a percentage of the state: 1.47%
• Percent Increase of Population from 2020-2023: 14.28%
• Percent of Employer Firms: 1.29%
• County Sales Tax Rates: 11.90%
• Average Commercial Real Estate Rent per Square Foot: $22.79

5. Scottsdale

Scottsdale is a perfect place for small businesses, boasting a highly developed and robust economic setting. As the 7th most populated city in Arizona, it enjoys a vast customer base and a good local economy. Scottsdale also ranks high in employer firm density, being 2nd in the state, making it a hotspot of entrepreneurship and business success. Yet its popularity comes at a cost—commercial real estate rents rank 32nd in affordability, making it one of the pricier locations for business owners. Despite its elevated overheads, Scottsdale’s business-friendly environment and high-end market position make it a strategic investment for those prepared to invest in long-term development.

• City population: 244,394
• City population as a percentage of the state: 3.22%
• Percent Increase of Population from 2020-2023: 6.68%
• Percent of Employer Firms: 10.30%
• County Sales Tax Rates: 11.90%
• Average Commercial Real Estate Rent per Square Foot: $33.08

6. Queen Creek

Queen Creek is one of Arizona’s fastest-growing cities, making it a promising location for small businesses. Although it ranks among the top 20 most populated cities in the state, its real standout metric is growth—ranking 1st for population increase from 2020 to 2023. This rapid expansion signals a rising demand for businesses, services, and job opportunities, creating a thriving environment for entrepreneurs. With a steadily increasing customer base and a booming local economy, Queen Creek is an ideal spot for business owners looking to capitalize on a city with strong future potential.

• City population: 76,570
• City population as a percentage of the state: 1.01%
• Percent Increase of Population from 2020-2023: 25.70%
• Percent of Employer Firms: 1.08%
• County Sales Tax Rates: 11.90%
• Average Commercial Real Estate Rent per Square Foot: $23.82

7. Gilbert

Gilbert is among the top cities in Arizona for small businesses due to its strong economy and good business environment. It, being the 5th most populous city in Arizona, presents a large and diverse customer base, making it appealing to entrepreneurs. Gilbert also ranks 5th for percentage of employer firms, recording a mature business environment and thriving entrepreneurial spirit. With its growing population and reputation for economic stability, Gilbert is still an ideal location for small business owners to set up and grow their firms.

• City population: 275,411
• City population as a percentage of the state: 3.63%
• Percent Increase of Population from 2020-2023: 2.32%
• Percent of Employer Firms: 5.11%
• County Sales Tax Rates: 11.90%
• Average Commercial Real Estate Rent per Square Foot: $23.33

8. Mesa

Mesa is a small business hub with an enormous market size and entrepreneurial presence. As Arizona’s 3rd most populated city, it exposes entrepreneurs to large and diverse markets. Mesa is also 4th in the percentage of employer firms, indicating a well-established business environment that promotes growth and innovation. With its friendly business environment and population size, Mesa is well-suited to be the point where entrepreneurs would start or conduct businesses in the context of a healthy metropolitan economy.

• City population: 511,648
• City population as a percentage of the state: 6.75%
• Percent Increase of Population from 2020-2023: 1.14%
• Percent of Employer Firms: 7.59%
• County Sales Tax Rates: 11.90%
• Average Commercial Real Estate Rent per Square Foot: $24.62

9. Avondale

Avondale is an attractive option for small businesses looking for affordability and growth opportunities. As one of Arizona’s top 15 most populated cities, it offers a solid customer base while maintaining a community-oriented feel. One of its biggest advantages is affordable commercial real estate, ranking 12th for lowest average rent, which helps business owners keep overhead costs down. With a growing population and budget-friendly business spaces, Avondale provides a strong foundation for entrepreneurs looking to establish and expand their operations.

• City population: 93,545
• City population as a percentage of the state: 1.23%
• Percent Increase of Population from 2020-2023: 4.44%
• Percent of Employer Firms: 0.79%
• County Sales Tax Rates: 11.90%
• Average Commercial Real Estate Rent per Square Foot: $18.40

10. Bullhead City

Bullhead City is a growing hub for small businesses, offering a combination of steady population growth and a favorable tax environment. Bullhead City ranks 5th for population increase from 2020 to 2023, even though it is ranked 25th for most populated city overall, signaling strong economic potential and rising demand for businesses. Additionally, it boasts the lowest county sales tax rate in the state (ranked 1st), making it an attractive option for entrepreneurs looking to maximize profits while keeping costs manageable. With its growing market and tax-friendly policies, Bullhead City presents a promising opportunity for small business success.

• City population: 43,302
• City population as a percentage of the state: 0.57%
• Percent Increase of Population from 2020-2023: 16.16%
• Percent of Employer Firms: 0.60%
• County Sales Tax Rates: 11.20%
• Average Commercial Real Estate Rent per Square Foot: $19.20

Methodology

B2B Reviews analyzed 35 cities across Arizona using key factors to determine the best locations for small businesses. These factors include population size, population growth, percentage of employer firms, county sales tax rates, and average commercial real estate rent.

Each city was ranked based on these factors, earning a score according to its weighted value. The cities were then evaluated on a 100-point scale, with 100 points representing the most favorable environment for small business success in Arizona.

City Population as a Percentage of the State — Total 20 Points

We gathered each city’s population in Arizona by dividing its population by the state’s overall population. Cities with a high population percentage scored higher.

Percentage of Population Growth (2020–2023) — Total 20 Points

We took the change in population from 2020 to 2023 and divided that by the total population in 2020. The cities with a higher percentage increase in population scored higher.

Percentage of Employer Firms — Total 20 Points

Cities with higher employer firm percentages scored higher overall by dividing the city employer firm total by the state employer firm total.

County Sales Tax Rate — Total 20 Points

We looked at the state rate and added that with each county’s tax rate to get a combined percentage. The cities with lower tax rates scored higher.

Average Commercial Real Estate Rent (per square foot) — Total 20 Points

Looking at each city’s rent per square foot, we ranked them from cheapest rent to most expensive rent. The cheaper the rent, the higher the city scored.

The Bottom Line

Arizona boasts a thriving small business environment, with Arizona cities across the state providing various opportunities for entrepreneurs. Our rankings identify the top cities in key areas like population size, population growth, employer firms, tax rates, and commercial real estate affordability. Chandler is the top city for small businesses by these measures because it has high growth and a strong business presence.

B2B Reviews provided these comparisons to help business owners decide where to open and develop their businesses. From a booming economy, low business cost, or significant customer base you want to cater to, Arizona has a city that fits your needs.

For small business owners and entrepreneurs, we encourage you to:

• Explore business-friendly policies in your potential city
• Assess commercial real estate costs when you select a location
• Leverage local business and networking support organizations
• Stay current on funding sources and tax credits
• Establish long-term growth by choosing a city with strong population trends

By strategically selecting the correct city and leveraging what is available, small business leaders can establish themselves for long-term prosperity in Arizona’s thriving economy.

Fair Use Statement

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