Small businesses are the backbone of Arizona’s economy. They create jobs, build communities, and provide the foundation for long-term economic stability. But across the state, I consistently hear the same concerns from business owners: access to capital is limited, there are too many regulatory burdens, and healthcare costs are becoming harder to manage.
If we want Arizona to remain a place of opportunity, we have to make it easier to start and grow a business.
What Business Owners Are Experiencing
Entrepreneurs and small business owners are navigating a more complex environment than ever before.
Access to capital remains one of the most common challenges, particularly for early-stage businesses and those without significant collateral. At the same time, regulatory processes including permitting, licensing, and compliance requirements can slow down growth and create uncertainty.
Healthcare costs are another major pressure point. For many small businesses, providing coverage for employees is one of the largest and least predictable expenses. For sole proprietors and early-stage founders, the cost of individual coverage can be a barrier to even starting a business.
The Bigger Picture
These challenges are not isolated. They are connected to broader systems that shape economic opportunity.
When access to capital is limited, fewer businesses get started.
When regulations are unclear or time-consuming, growth slows.
When healthcare costs rise, hiring becomes more difficult.
Over time, these pressures reduce the number of locally owned businesses and increase reliance on larger, external companies. That weakens the long-term resilience of the economy and results in a situation where economic value is extracted from our economy instead of being retained.
What a Strong Business Ecosystem Looks Like
Arizona has the opportunity to build an environment where businesses can be created, grow, and transition across generations.
That requires alignment across several areas:
• Workforce and Education — ensuring that employees have the skills businesses need
• Economic Development — supporting local business formation alongside larger investments
• Land Use and Infrastructure — making it possible to operate and expand
• Regulation — creating clear, predictable processes
• Access to Capital — supporting lending, investment, and public/private partnerships
• Community Support — strengthening organizations like chambers of commerce that connect businesses and resources
Access to Capital
Capital is the fuel that allows businesses to start and grow. In Arizona, many small businesses rely on the few remaining community banks, credit unions, and alternative lenders to access financing.
Strengthening access to capital means supporting local financial institutions, encouraging responsible lending, and expanding pathways for entrepreneurs who may not fit traditional underwriting models.
This includes:
- Expanding partnerships with community lenders
- Supporting small business lending programs
- Encouraging innovation in financing models while maintaining discipline and risk management
- Making it easier for community banks to be formed in Arizona to replace those that have been sold to out-of-state institutions. Models like Bank of North Dakota are great examples of partnerships between the state and community banks that have tremendous benefits to taxpayers (more to come on this in a separate post)
Regulatory Environment
Regulation plays an important role in protecting public interests, but it must also be workable.
When processes are unclear or timelines are unpredictable, businesses face delays that increase costs and limit growth. Improving the regulatory environment does not mean removing standards, it means making processes more efficient, transparent, and consistent.
This includes:
• Streamlining permitting and licensing
• Reducing duplicative requirements
• Providing clear guidance and timelines
Healthcare and Cost Pressures
Healthcare costs affect both businesses and individuals. For small businesses, rising premiums can limit hiring, reduce wages, or make it difficult to offer benefits at all. Small businesses also have to compete for talent with large, out-of-state companies that can offer better benefits because of their scale.
Addressing this issue requires looking at healthcare as part of the broader economic system. Greater transparency, competition, and flexibility can help reduce pressure on employers and employees alike, and reform of our healthcare system is long overdue.
Infrastructure and the Cost of Doing Business
Infrastructure is one of the most overlooked drivers of small business success.
When infrastructure works well, it lowers costs and allows businesses to operate efficiently. When it falls behind, it becomes a hidden tax on time, labor, and growth.
For small businesses, this shows up in practical ways:
- Transportation delays that affect deliveries and customer access
- Utility constraints that limit where businesses can locate or expand
- Insufficient broadband access, particularly for smaller or rural businesses
- Infrastructure that hasn’t kept pace with population and economic growth
These challenges affect daily operations and long-term decisions about where and whether to invest.
Infrastructure is also directly connected to housing and economic development. When roads, water systems, and utilities are not aligned with growth, it slows development timelines, increases costs, and limits the ability to bring new housing and commercial projects online.
That, in turn, affects both affordability and business expansion.
A more effective approach to infrastructure investment focuses on:
- Coordinating planning across cities, counties, and regional partners
- Aligning infrastructure with housing and economic development priorities
- Investing in capacity before constraints become bottlenecks
- Maintaining existing infrastructure, not just building new projects
This is not about expanding government for its own sake. It is about making sure the foundation is in place so that businesses can operate, grow, and invest with confidence.
When infrastructure is planned and executed well, it becomes a multiplier for everything else workforce, housing, and economic development. Time and time again, regions that invest in infrastructure see higher returns for taxpayers and businesses.
Supporting Local Business Networks
Organizations like chambers of commerce play a critical role in connecting businesses, sharing resources, and supporting local economic development.
These networks help businesses navigate challenges, build relationships, and access opportunities that would otherwise be difficult to reach.
Strengthening these organizations strengthens the broader economy.
Where We Go From Here
Arizona has strong fundamentals — population growth, entrepreneurial energy, and a diverse economy. But sustaining that growth requires intentional focus on the systems that support small businesses.
The goal is not just to attract new companies. It is to ensure that businesses can start here, grow here, and stay here.
When that happens, opportunity becomes more stable, more local, and more durable over time.
