Montana experienced some of the highest economic growth in 2021 according to Montana Public Radio. With such a great economy, it’s no wonder that any soon-to-be business owner would decide to open their doors in the state. There are many opportunities to get your business idea going, and it all comes down to your industry, location, and passion.

Think this may be the place for you and your business? Read on to find out if the wealth of programs this state offers could benefit your next venture.

How to start a Montana business

Starting a business in Montana is a lot like starting a business anywhere, but its government infrastructure is well-suited to help you through the process. For many potential small business owners, you’ll have to do a few things like create a business plan, choose a business entity, name the business, and more. Here are the detailed steps to making your business idea into a reality.

Step 1: Create a business plan for your Montana company

Before taking on the more though-provoking topics of a business formation, like choosing a business entity or opening a business bank account, you’ll have to put together a business plan.

What is a business plan?

Your business plan is your road map to success. It’s what you’ll share with any potential investor, lender, or grantor when you seek financial help. As opportunities and challenges arise (and they will), you’ll come back to the plan again and again. While this may not seem like the most exciting step to opening your own business in Montana, it is essential to your success since it shows that you’re serious about running the company.

What to add to your business plan

When you put together your business plan, these are eight things to you want to think about:

1. Describe your business idea. What problem does it solve for residents of Montana, and how?
2. Set SMART goals (Specific, Measurable, Attainable, Realistic, and Timely). In Montana, you may want to choose a high-tech business since there’s a group created to help grow that specific industry in the state.
3. Think about what could go wrong. For instance, Montana’s weather can be extreme in winter. Will that impact your supply chain? What will you do to address it?
4. Define your ideal customer. Will this be a B2B (business to business) company or B2C (business to consumer)? Who and where are your customers? What motivates them to buy your product or service?
5. Check for Montana tax incentives, grants, and investment opportunities.
6. Count the costs. Think about the equipment, people, and infrastructure you’ll need to run the business. Forecast that out for 1–5 years.
7. Choose a location. Missoula and Bozeman have some of the highest entrepreneurship levels in the U.S.
8. Determine how your Montana business will grow. Will you expand product offerings? Customer base? Franchise out? Get established in more states?

Step 2: Choose a business structure

Once you’ve drafted a business plan, you’ll need to register your business with the IRS and Montana. To do that, you’ll first have to pick which business structure best suits your situation. Your options are:

• Sole proprietorship
• Montana limited liability company (LLC)
• Montana Corporation

Business Structure Considerations

There are several factors to consider when choosing a business structure. These include:

• Control. If you want to maintain complete control over the business, then a sole proprietorship or LLC may be best. Corporations operate as their own entities, apart from the owners/shareholders.
• Liability protection. Both an LLC and corporation shield your personal assets from liability during lawsuits. A sole proprietorship does not.
• Tax implications. The money you make or lose from a sole proprietorship and, in some circumstances, an LLC, can pass right through to your income taxes. A corporation pays its own taxes because it is a separate entity and exists apart from its owners/shareholders. The business income gets taxed again when you receive money as an owner/shareholder.

You can file for an LLC online. Learn more about what business licenses or permits you may need in Montana. You can check on the Small Business Development Center website.

Step 3: Determine startup costs for you Montana business

Want to know how much it will cost to start a business in Montana? You’ll need to calculate your fixed and ongoing expenses before you spend a penny. This helps you know exactly what it takes to get the business up and running in Montana — and stay running until it turns a profit.

Types of Business Costs in Montana

When listing the costs, it can help to think of them in terms of fixed, ongoing, and one-time.

Fixed costs don’t change no matter how much you sell (or don’t sell). These include things like your attorney and accountant fees, office rent, and insurance.

Ongoing expenses are ones that the business must pay on a regular basis. They also fluctuate depending on the season or business volume. For instance, if you were to start a farm, your worker pay rates will increase during the harvest. Other ongoing expenses include the supplies needed to create your product. As you sell more products, your costs for materials will increase.

Finally, list your one-time costs. Think about what equipment and furniture you’ll need in Montana. This can include computers, printers, desks, and vehicles.

Step 4: Name your Montana business

So, what will you call your business? Choosing a name for a Montana business can be fun – or challenging. You might play off some Montana phrases like “a buck ninety-eight” or “a couple-three.” Or you could go with a product or service-specific name (e.g., Montana Maids).

Keep in mind that, depending on the business structure you chose, you’ll have to add an indicator at the end. So, if you formed as an LLC, you’ll have to add “LLC” at the end of your business name. A corporation will need to add “Inc.” or “Incorporated” at the end.The only exception is a sole proprietorship, which uses your name for the business.

File for a DBA

If you don’t want to name your business after yourself, you can file to use a DBA in Montana, or a “doing business as” name. A DBA is a is a name you use to do business under a different name.

Once you’ve brainstormed a list of options, check to see if another business in your state already has that name. You can do a business name check on our website, or check with the Montana Secretary of State. If it’s available, see if the website address and social media names are available, too. You don’t want the headaches or lost customers that may come with a choosing name that’s already in use.

Step 5: Register your business in Montana

Now that you’ve selected a business entity and chosen a name for your new business, it’s time to make things official. You’ll now register your small business with the Montana Secretary of State. You’ll file your Montana Articles of Incorporation and your Montana Certificate of Good Standing, if required. You may need to register with city/regional government entities, too.

Get an EIN

Your business will need an Employer Identification Number (EIN). An EIN is like a Social Security number for your business and is used to identify it. An EIN is also known as a Federal Employer Identification Number (FEIN). The IRS uses this number to identify taxpayers required to file business tax returns. You can get an EIN with us as well.

Open a Business Bank Account

Once you have all your paperwork squared away, you can open up a business bank account to handle your business expenses. Even if you went the sole proprietor route, it’s a good idea to open a separate account for business finances. It’s a great way to separate your business and personal finances. This will also help you see exactly what’s going on regarding your income and spending and adjust as needed. The bank may also have business credit cards available for use. The bottom line is that a business bank account to handle your business expenses should be considered.

Get Montana Business Insurance

Consult with a Montana business insurance agent to see what coverage your business might need. It’s important to bet business insurance to protect yourself and your business. It can help pay for property damage, lawsuits, lost business income, and other things. Your business insurance agent can recommend the right coverage for your business needs.

Check for Licenses and Permits

Finally, check with your local municipalities to see what licensing or zoning permits you may need. Montana does not have a general business license. But, you’ll need a license for some specific industries.

Step 6: Market your business

Now for the most-critical part of launching your business: finding customers. To do this, you’ll have to create a marketing plan.

How to Create a Marketing Plan

The first step is to identify your potential customers. If your customers are in Montana, then get to know their demographics. That means knowing your customers’ age range, education level, interests, needs, and location.

Next, think about how you’ll reach your customer base. No matter where they live, think about you’ll let them know about your products or services. This can include getting listed in a business directory, opening a storefront in their area, or joining a civic group. You can also provide pro-bono work or free products to local nonprofits, or partner with other businesses to plan special events. Also, consider getting business cards made and hand them out liberally.

Last, create a website with strong search engine optimization (SEO). Making a business website is easy with our website creator. You’ll also need to create social media profiles and use a strategy to ensure your brand and visuals remain consistent across platforms (Twitter, Facebook, Instagram, LinkedIn, etc.). Register your business on Google My Business, so it’s easier to find. Finally, build an email database to reach your customers with helpful information.

What are the benefits of opening a business in Montana?

Besides to the gorgeous scenery, Montana’s business tax incentives make it an attractive state for new business owners. You have many opportunities to save on taxes here. The state offers energy conservation investments, property tax abatements, and new or expanding industry wage credits.

Plus, the Montana Business Assistance Bureau is a huge support for entrepreneurs. The Bureau helps find startup capital, export to other markets, conduct research, and connect to other local economic development services. Female entrepreneurs, veteran entrepreneurs, and Native American entrepreneurs can benefit from specific programs in Montana.

Examples of good businesses to start in Montana

So, what industries are prominent in Montana right now? The biggest business sector in Montana is restaurant and food services. Schools and construction come next, followed by administrative and support services. Non-internet broadcasting and scientific research and development services round out the list.

The state has a concerted effort to recruit more high-tech businesses to Montana. This could be why it employs about 112,000 of Montana’s current 491,000 workers.

We can help

With its wealth of tax incentives and robust government assistance, Montana is more than a scenic place to open your business. It’s a state that is rolling out the welcome mat. Take time to follow the information outlined above and make time to network. You may just find that Montana is the perfect place to start your venture. Reach out to us to help you start, run, and grow your business!

Disclaimer: The content on this page is for informational purposes only, and does not constitute legal, tax, or accounting advice. If you have specific questions about any of these topics, seek the counsel of a licensed professional.