When considering what business to start in Montana, researching market demand, analyzing competition, and choosing the right location are just a few factors to consider. To help make a decision, I’ll share some industries in Montana that tend to be popular due to the state’s demographics and consumer behaviors.

Agriculture-related businesses: With agriculture being one of the major industries in the state, starting a business in this sector, such as organic farming, farm equipment sales or leasing, or agricultural consulting services, could be promising.

Tourism and outdoor recreation: Montana’s rich natural beauty, including national parks and wildlife reserves, attracts many tourists. A business related to outdoor recreation, such as a guided tour service, campground, or adventure sports company, might find success in this environment.

Renewable energy: Montana has abundant renewable energy resources like wind, solar, and hydro power. A business focused on renewable energy production, solar panel installation, or consulting services could have potential in the state.

Healthcare and senior services: Given the state’s aging population, there is a demand for healthcare and senior services. A business offering home healthcare, senior living facilities, or specialized medical services could find a niche in Montana.

E-commerce and online services: Since the state has a predominantly rural population, there is an opportunity for businesses that offer online services or e-commerce to reach customers outside of the state.

To look at more industries, check out our business idea library for detailed industry information, trends, costs to start, tips, and more.

Starting a business in Montana is an exciting prospect, but it is important to remember that the success of any venture depends on having a plan. A business plan is a tool that will help entrepreneurs identify and evaluate potential opportunities, assess risks, and develop strategies for achieving their goals.

Not only is the business plan an effective roadmap, but banks and investors will also need to evaluate before funding a business.

Related: How to write a business plan

The next step in starting a business in Montana is selecting a business entity (also called a legal or business structure). A business entity refers to the structure under which your business operates, defining how it is organized, taxed, and regulated. Selecting the appropriate business entity is crucial, as it can affect your personal liability, tax obligations, and overall management of the company.

In Montana, there are four common business entity types: sole proprietorship, general partnership, corporation, and Limited Liability Company (LLC), and it’s important to understand the differences between these four business entity types so you can choose the right one for your needs.

A sole proprietorship is easy to set up, as the business is personally organized under an individual. You don’t need to file any paperwork to create it, however, you’ll be personally liable for any debts and obligations of the business.

A general partnership is also relatively easy to create, and there is more than one owner. The partners share the profits and losses of the business. However, like a sole proprietorship, partners are personally liable for any business-related obligations.

A corporation creates a separate legal entity from its owners. The corporation’s management makes business decisions, and the shareholders own the corporation. The shareholders are not personally liable for the corporation’s obligations, and the corporation pays taxes on its profits.

Related: How to form a corporation in Montana

Last, a Limited Liability Company (LLC) is a hybrid of a sole proprietorship/partnership, and a corporation. It provides limited liability protection to its owners, but it also has the flexibility of a partnership.

Related: How to form an LLC in Montana

Business Licenses – The state of Montana doesn’t have a general business license; however depending on your city or county, you may need additional local licenses, such as zoning permits, building permits, or business licenses.

Tax Identification Numbers: As a partnership, corporation, multi-member LLC, or any business with employees will need to obtain a Federal Employer Identification Number (EIN) from the Internal Revenue Service (IRS). Additionally, you may need to register for a Montana State Tax ID through the Montana Department of Revenue for state taxes, such as withholding, unemployment insurance, and workers’ compensation.

Professional Licensing – Some services, such as barbers, contractors, cosmetologists, massage therapists, and others, require professional licensing through the Montana Department of Labor & Industry. While this isn’t a license on the business, licensing is required in order to provide certain services.

Business Name Registration: If you are a sole proprietorship or partnership in Montana and doing business under your first and last name or surname (maybe as a consultant, contractor, etc.), there is no filing, but if the business will operate under a fictitious name, you will need to file an Assumed Business Name, also known as a DBA (Doing Business As) with the Secretary of State.

Related: What business licenses and permits are needed in Montana?

Keeping your business and personal finances in separate bank and credit card accounts makes it easier to track business expenses.

Having separate accounts will help you stay organized and make sure that all business expenses are being tracked properly. To maintain this separation, open a dedicated business bank account and credit card, and use them exclusively for business-related transactions.

One of the biggest challenges for small businesses is finding the right funding to get their business off the ground. Fortunately, there are several options available to entrepreneurs in Montana.

Personal funds are often the first source of capital for new businesses. This can include savings, investments, or even borrowing from family and friends.

Conventional bank loans from traditional banks and credit unions offer loans to small businesses based on factors like credit history, business plan, and collateral. While interest rates can be competitive, securing a conventional bank loan may be more challenging for startups due to strict eligibility and credit requirements.

The Small Business Administration (SBA) offers loan guarantee programs, such as the 7(a) Loan Program and 504 Loan Program. This guarantee program help to reduce risk for lenders and makes it easier for small businesses to secure financing.

Microloans are another source of financing designed to help startups and businesses with limited credit history or collateral. In Montana, organizations Headwaters RC&D offer microloan programs to support small businesses. Loan amounts typically range from $5,000 to $150,000.

You can also seek funding from investors, such as angel investors or venture capitalists. These investors typically provide capital in exchange for equity in your business. Local organizations, such as Montana High Tech Business Alliance and Frontier Angels can help connect you with potential investors in the region.

Related: Understanding the different types of business funding

Hiring employees is a complex and often overwhelming process for a new business owner as there are multiple agencies to register, such as the Montana Department of Revenue’s (DOR) Taxpayer Access Point (TAP) website, the Internal Revenue Service (IRS), and others.

Employers are responsible for reporting new hires, verifying employees are eligible to work in the U.S., income tax withholding, unemployment insurance, unemployment taxes, and payroll withholding taxes, including Social Security and Medicare.

Related: Steps to hiring your first employee in Montana

As a small business owner, it is important to understand the importance of having the right insurance coverage for your business. Insurance can help protect your business from financial losses due to unexpected events such as accidents, natural disasters, and lawsuits. Having the right insurance coverage can also help you manage risk and ensure that your business is able to stay afloat in the event of a claim.

When starting a small business in Montana, there are several types of insurance policies that you should consider purchasing. The most common type of insurance for small businesses is a Business Owner’s Policy (BOP). A BOP typically includes general liability insurance, property damage liability, and business interruption coverage. This type of policy can provide protection against third-party claims related to bodily injury or property damage caused by your business operations.

Related: Types of insurance your business may need

Accounting and bookkeeping are essential components of any successful business. An accounting system helps businesses to track their income and expenses, allowing them to make informed decisions about their finances. It also allows businesses to prepare accurate financial statements that can be used for decision-making, budgeting, and forecasting. Accurate records are necessary for tax compliance purposes, as they provide evidence of income and expenses that must be reported on tax returns.

Related: Setting up accounting for a business