Montana’s blue skies are so big you can get dizzy just looking up, never mind the snow-capped mountains, endless plains, and rich deposits of natural resources. And if you’re wondering how to start a business in Montana, there’s plenty of good financial news, too.
It’s no wonder that 118,315 small businesses operate in Montana, employing over 244,000 people. Business is growing in Montana at an annual rate of about 2%. That’s less than the overall U.S. rate of 3.4%, which means not everyone has jumped on this particular bandwagon yet.
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.
Benefits of Opening a Business in Montana
In addition to the gorgeous scenery, Montana’s business tax incentives make it an attractive locale for new business owners. There are many opportunities to save on taxes here, from energy conservation investments to property tax abatements and new or expanding industry wage credits.
Plus, the Montana Business Assistance 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.
This state wants your business!
How to Start a Business in Montana Checklist
Starting a business in Montana is a lot like starting a business anywhere, though its government infrastructure is suited better than some other states to help you through the process. Here are the steps for getting your business up and running in Montana.
1. Create a Business Plan
Your business plan is your road map to success. It’s the document that any potential investor, lender, or grantor will want to see when you seek financial help. As opportunities and challenges arise (and they will), you’ll come back to the plan again and again. So, while it may not seem like the most exciting thing you’ll do in your entrepreneurial life, the critical role it plays in ensuring success makes it essential.
When writing your business plan, consider doing these things:
- Describe your business idea. What problem does it solve for residents of Montana, and how?
- Set SMART goals (Specific, Measurable, Attainable, Realistic, and Timely). In Montana, a high-tech business may be the way to go as there’s a group created specifically to assist with growing that industry in the state.
- 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?
- 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 purchase your product or service?
- Check for Montana tax incentives, grants, and investment opportunities.
- Count the costs. Think about the equipment, people, and infrastructure you’ll need to run the business. Forecast that out for 1–5 years.
- Choose a location. Missoula and Bozeman have some of the highest entrepreneurship levels in the U.S.
- Determine how your Montana business will grow. Will you expand product offerings? Customer base? Franchise out? Get established in additional states?
2. LLC vs Sole Proprietorship: Choose a Business Structure
Once your business planning is wrapped up, 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, limited liability company (LLC), and corporation (S corp or C corp).
Factors to consider when choosing a structure 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 entities, apart from the owners/shareholders.
- Liability. Both an LLC and corporation shield your assets from liability during lawsuits. A sole proprietorship does not.
- Tax implications. The financials of a sole proprietorship and, in some circumstances, an LLC can pass right through to your income taxes. A corporation must pay taxes itself because it is an entity that exists on its own apart from its owners/shareholders. The money is taxed again when you receive it as an owner/shareholder.
You can file for an LLC online. Learn more about what business licenses or permits may be required in Montana from its Small Business Development Center.
3. Determine Your Montana Business Costs
Calculating your costs before you spend a penny will help you know exactly what it takes to get the business up and running in Montana — and stay running until it turns a profit. 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 regularly. 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.
4: Create a Business Name
So, what will you call your Montana business? Maybe 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).
Once you’ve brainstormed a list of options, check to see if another business in your state already has that name via 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 lawsuit headaches or lost customers that may come with a name that’s already in use.
Once you decide on a name, register it everywhere you intend to use, including the Montana Secretary of State website, domain name, Facebook, Twitter, Instagram, Pinterest, and LinkedIn.
5. Register Your Montana Business and Open Financial Accounts
Using the business entity you chose (sole proprietorship, LLC, or corporation), register your small business with Montana’s state and, if required, your city/regional government entity. Visit the IRS site to obtain an employer identification number (EIN).
Now, using all your paperwork, open up a bank account for the business. Even if you went the sole proprietor route, it’s a good idea to open a separate account just for business finances. This will help you see exactly what’s going on financially and adjust as needed. The bank may also have business credit cards available for use.
Consult with a Montana insurance agent to see what coverage your business might need.
Finally, check with your local municipalities to learn what licensing or zoning permits you may need. Montana does not have a general business license, but licenses are required for some specific industries.
6. Market Your Montana Business
If your customers are in Montana, then familiarize yourself with both its citizen demographics and tourist characteristics.
No matter where your audience is, think long and hard about the kinds of products or services you offer and go there. In the real world, this can include getting listed in the phone book or business directories, opening a storefront in their typical foot traffic areas, joining civic organizations like Kiwanis and Rotary Club, providing pro bono work or free products to local nonprofits, partnering with other businesses, or planning special events. Also, consider getting business cards made and hand them out liberally.
On the web, set up a search-engine-optimized (SEO) website. Create a social media 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, and build an email database to reach out to your customers with helpful information quickly.
Examples of Good Businesses to Start in Montana
So, what industries are prominent in Montana right now? The most significant sector in Montana financially 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. There’s a concerted effort to recruit more high-tech businesses to Montana, which could be why it employs nearly 112,000 of Montana’s current 491,000 workers.
With its wealth of tax incentives and robust government assistance, Montana is more than just a scenic place to open your business. It’s a state that is rolling out the welcome mat. If you take the time to follow the information outlined above and build the relationships on offer, you’ll find Montana just may be the perfect place to start your venture.
Montana Business FAQs
What is an excellent city to start a business in Montana?
Missoula, Bozeman, and Great Falls are acceptable Montana cities in which to start a new business. Greg Doyon, the Great Falls City Manager, says, “Other communities have significant development costs, not to mention incredibly high real estate prices. Great Falls are Montana’s best-kept secret for small business.”
What is the average wage in Montana?
Montana’s median household income is $55,328 (as of 2018), which was 3.64% higher than the previous year. Gallatin County has the highest median income, at $68,266.What is a good city to start a business in Florida?
Do women make as much as men in Montana?
No. The average male salary in Montana is $57,596, while the average female wage is $42,785.
What business and tax regulations are compulsory for an LLC business in Montana?
Montana’s local city and county offices can advise you on which licenses, registration, and permits are required. The Montana Department of Labor & Industry can assist with information about specific professional or occupational licenses you may need.
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