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Montana is an agricultural land, with the economy focused on ranching and cereal grain farming. Other significant industries include gas, oil, mining, and lumber. And tourism is the most promising industry for now showing consistent growth.
What really makes the Big Sky Country stand out is its devotion to entrepreneurship. Though smaller than leading US economies, Montana has the highest number of entrepreneurs per capita in the country and is one of the top ten states with a small business survival rate of 53.4%.
With a favorable tax climate, low business failure rate, and lower labor costs, the Land of the Shining Mountains was at the top of the Blueprint “Best States for Small Business” rating in 2021 leaving Texas and Florida behind.
In a word, Montana is the nation’s champion in entrepreneurship which is further proven by the statistics on small enterprises (SMEs) given below.
Montana’s GDP in 2022 is $49.3 billion showing a slight growth from $49.26 billion in 2021 (Statista);
The annualized growth rate of the gross domestic product in a 5-year perspective (2017-2022) is 1.4% (IBISWorld survey);
The biggest GDP earners ensuring 34.9% of the total GDP in the state are real estate, healthcare, and manufacturing industries;
Sectors generating the highest revenues are petroleum refining, petroleum and gas stations, and lotteries and casinos bringing $15.1, $5.9, and $5.1 billion per annum accordingly;
There are 129.180 small enterprises in the Montana economic arena that account for 99.4% of all businesses in the state;
In 2020, SME exporters ensured nearly 73% of the total state export worth $1.2 billion;
Small enterprises account for 87.2% of exporters in MT;
Construction is the sector featuring the highest SME count in the state, with 19.170 companies working in it. The second biggest SME sector is professional, scientific, and technical services, with 16.303 entities in it;
Company management is the least popular among SMEs, with only 68 entities operating in it;
For the period from March 2020 to March 2021, a net gain of new establishments in the SME sector was 2.024 entities;
The net job increase for the same period was 1.433 new jobs;
Montana is among the states with the highest SME employment rates. Small private companies maintain 66.8% of the labor market giving jobs to 250.680 workers;
Employer enterprises make up 25% of the total SME count in the state, and most of them are companies with 1 to 19 employees;
The most active employer SMEs are found in the accommodation and food service and healthcare sectors, with 43.111 and 40.396 workers engaged in them accordingly;
Montana’s minimum hourly wage rate is $9.20, with a prospective increase to $9.95 in 2023;
The average wage rate in the state is $23 translating into $48.576 of income annually;
Owners of unregistered entities earn around $27.000 per annum while non-employer incorporated enterprises have a median income of $41.000;
The unemployment rate in MT is 2.9% which is below the federal average rate.
Top 10 Industries for Small Businesses in MT
Professional, scientific, and technical services
Real estate, rental, and leasing
Other services (excluding public administration)
Healthcare and social services
Administrative, support, and waste management
Entertainment and recreational services
Transportation and warehousing
Accommodation and food services
MT Small Business Demographics
SMEs owned by women account for 42.584 companies and make up 46% of the total SME count. 12% of these entities have payrolls;
Men possess 65.503 SMEs, 24% of which are employer entities;
Small private ventures equally co-owned by men and women number 13.309 entities, 60% of which have hired labor force;
Ladies represent 46.8% of the labor pool in the private sector;
Veterans own 9.2% of small enterprises and ensure 7.7% of manpower;
Montana is a “white” state, with racial minorities accounting only for 11.1% of a 1.104.271 population of state residents;
The same is true for small businesses in MT, among which only 4.3% of private companies are controlled by immigrant owners;
Likewise, racial minorities represent only 10.7% of workers in the state;
SME ownership is split between ethnic groups as follows (Census data):
American Indians and Alaska Natives: 1.103;
Black Americans: 274.
MT Small Business Formation
It will cost you $70 to register a Montana LLC with the Secretary of State while an incorporation rate is $35;
To be in good standing with the state, you should maintain a Montana registered agent for your legal entity and file a state report before April 15 annually. A reporting fee is $20;
LLC income is distributed between the company owners and taxed on their personal tax returns under individual tax rates that range from 1% to 6.75% depending on the income amount;
A corporate income tax in the state is a flat 6.75% rate;
Montana levies neither state nor local sales taxes, thus, reducing the burden for commercial enterprises.