School debts hamper entrepreneurial dreams of recent grads in Arizona

America is the land of opportunity and millions of graduating college and post-graduate students emerge from schools with dreams of owning and operating their own businesses. Many of these young people flock to the entrepreneurial-friendly state of Arizona, attracted by the relatively low business and property taxes.

Unfortunately, student debt is hampering many young adults from pursuing their business aspirations, according to the Small Business Administration. The Federal Reserve Bank reported in a recent Bloomberg article that the average education-loan balance for 25-year-olds nearly doubled in the past 10 years, bringing national education loan totals to $1 trillion.

This spring, the federal Consumer Financial Protection Bureau sought comments from thousands of small business owners and found that many are diverting money - normally funneled in to their businesses - to pay down student loan payments. High levels of debt make purchasing commercial real estate difficult and hamper enthusiasm for innovation and risk-taking.

However, the entrepreneurial spirit is alive and well in Arizona, elevating it to the number one state for start-up businesses, according to CNN Money. Despite high levels of school loans, some former students are able to establish new businesses through smart financial planning and professional assistance.

Starting a business in Arizona

Managing finances is only one of many steps to owning and operating a business in Arizona. Establishing a business plan is very important and can be easier with the guidance of a legal advisor. Following are some items that should be included in the planning and set-up phases of any new business in Arizona:

  • Choose and secure the name of your business - and a domain name - by checking for availability with the Arizona Corporation Commission (ACC).
  • Choose an entity type for your business and file the required incorporation documents with the ACC.
  • Obtain the required licenses and tax identification numbers at the federal, state and local levels.
  • Set up a business banking account and keep your business finances separate from personal accounts.

Seek the counsel of a lawyer

A business attorney can help you at every stage your new business. A lawyer knowledgeable about corporate and business matters may be able to help you with such issues as:

  • Drafting and filing legal paperwork on an on-going basis.
  • Setting up and reviewing contracts with customers, vendors and employees.
  • Avoiding and handling business disputes and litigation.

Consult an experienced business law attorney before starting up a new business and seek regular counsel throughout the life of your entity.