We, the undersigned residents, business owners, and nonprofit leaders of Tempe, Arizona, call on the Tempe Mayor and City Council to reject the proposed General Business License initiative. For an overview of the initiative, see the Tempe Tribune article here.    

Tempe is a city fueled by the passion of its small business owners, the innovation of its entrepreneurs, and the dedication of its nonprofits. From family-run service providers to community-focused organizations, these entities form the backbone of our vibrant economy. However, the proposed General Business License initiative threatens to stifle this entrepreneurial spirit by imposing unnecessary financial and bureaucratic burdens that could undermine Tempe’s pro-business identity.

This policy offers little direct benefit to small businesses and nonprofits while risking significant harm to the very community it claims to serve. We urge the City Council to reject this initiative to protect Tempe’s economic vitality and community spirit.

The proposed business license would:

• Impose unnecessary costs on small businesses and startups, many operating on razor-thin margins. According to the U.S. Small Business Administration, 50% of small businesses fail within their first five years, often due to financial pressures. Additional fees could push many Tempe businesses, particularly the 60% with fewer than 10 employees (per a 2023 City of Tempe study), to the brink.
• Burden nonprofits, diverting funds from critical services, like food banks, youth programs, and housing assistance, to cover licensing fees and compliance costs. Nonprofits in Arizona employ over 7% of the workforce and contribute $11 billion annually to the economy, yet many operate with limited resources.
• Add bureaucratic red tape, discouraging innovation and entrepreneurship. With an estimated 30,000 businesses in Tempe, the city’s focus on enforcing compliance for just 6,000 expected registrants (a 20% registration rate, similar to Mesa’s program) would divert resources from supporting businesses to chasing paperwork.
• Disproportionately harm small organizations and home-based businesses, which are vital to Tempe’s economy. The projected $150,000 in annual revenue from the program (far below the potential $750,000 with full registration) may be offset by the costs of administering the program, including hiring additional staff, making the initiative financially questionable and a potential strain on the city’s budget.
• Offer little value to businesses while prioritizing city-centric benefits like data collection and regulatory compliance. Promised perks, such as connecting businesses with resources or sharing updates, are services the Tempe Chamber of Commerce should already provide. Concerns also exist about the Chamber’s claimed support for the program, as many members report not being surveyed or informed about this endorsement.

Tempe’s economy thrives because of its diverse businesses and organizations, bolstered by Arizona State University’s startup ecosystem, which ranks among the top 20 in the U.S.

Unlike neighboring cities like Scottsdale, Chandler, Mesa, and Gilbert, Tempe does not currently require a business license, giving it a unique opportunity to market itself as a business-friendly hub, especially for ASU students and young entrepreneurs.

However, this initiative risks deterring new businesses and undermining Tempe’s reputation. The full City of Tempe Ordinance Text can be found here, detailing requirements that could stifle growth.

Rather than imposing a mandatory license, we propose a voluntary business database where owners can share information at no cost via a simple online form. This alternative would likely see higher participation than the projected 6,000 businesses, deliver similar data-collection benefits, and avoid adding costs or administrative burdens to businesses or the city.

We urge the Mayor and City Council to:

1. Reject the General Business License initiative, recognizing its potential to harm small businesses, nonprofits, and Tempe’s economic competitiveness.
2. Engage with business owners and nonprofit leaders to explore fair, voluntary alternatives, such as a no-cost business database, that support Tempe’s economic vitality without punitive measures.

Together, we can protect Tempe’s small businesses, nonprofits, and entrepreneurial spirit. By rejecting this initiative, we affirm that Tempe remains a welcoming, innovative home for all who contribute to its success.

Sign below to stand with our community and keep Tempe a vibrant, business-friendly city.

Signed,

Joe Forte

Tempe Small Business Owner
Tempe Non-Profit Founder & Board Member