How to Start a Business in Montana
The process begins with writing a business plan then choosing your entity, registering your business name, filing all the documentation, and finding customers.3 min read
Wondering how to start a business in Montana? The process begins with writing a business plan then choosing your business structure, registering your business name, filing all the proper documentation, and finding customers.
Steps to Start a Business in Montana
- Write Your Business Plan.
The first (and most important) step in starting any business is to write a business plan. A good reason for writing a plan is to enable your business to borrow money from the bank, but it's not the only reason. Putting a plan onto paper helps your ideas become concrete and creates a tangible plan that pinpoints the direction you want to go. Planning is crucial in creating a prosperous business.
- Choose Your Business Structure.
Sometimes referred to as a business entity, a business structure is how your business is legally formed. The four structures are the sole proprietorship, partnership, LLC, and corporation.
- Register Your Business Name.
The next step is to register your business name with the state. LLCs and corporations have to choose a unique name at the time of filing. To look up whether a name is available, visit the Montana Secretary of State.
- Obtain an Employer Identification Number (EIN)
An EIN, sometimes called a Federal Employer Identification Number (FEIN), is a nine-digit identification number used for tax purposes by the Internal Revenue Service (IRS). This number is used to identify companies operating in the US, track tax returns, and open bank accounts. The EIN is to a business what a social security number is to an individual. Not every business will be required to obtain an EIN. Partnerships, LLCs, corporations, or sole proprietorships that hire employees will need to file for an EIN. LLCs and sole proprietorships without employees will not need to file for an EIN; in these cases, the owner's social security number will be used instead. Filing online for an EIN online takes a few minutes, and the number becomes available immediately. Alternatively, you can mail an SS-4 form or call the IRS.
- Apply for Business Licenses and Required Permits.
Although there is no general business license required by the State of Montana, your business might need to register with specific agencies before conducting business. For example, professional and occupational businesses are state-regulated and therefore require state registration. These state-regulated occupations include massage therapists, landscape architects, cosmetologists, and barbers, among others. Other industries may also require licensing, such as daycare centers, salvage yards, and food establishments. The Montana Department of Labor and Industry has more information regarding the requirements and fees associated with these professions and industries.
- Secure financing.
Acquiring financing for a small company may take time and persistent effort. Just like a home loan, your bank will require thorough documentation of your personal finances, as well as a concrete idea and a promising business plan. Generally, banks like to see the business owner invest 15 to 25 percent of their money into launching the business. This equity includes cash, inventory, equipment, tools, and vehicles associated with the business. The bank may require a lien on these items as well.
- Open Business Credit and Banking Accounts.
Use a dedicated account and credit card for all your business-related transactions. This simplifies business accounting and presents your company in a more credible way to clients and customers. If your business is an LLC or corporation, using business banking accounts is important in protecting your business as a separate entity.
- Get Insured.
As a business owner, you need to manage risks and keep your focus on expanding your business. Consider obtaining insurance to protect your business, such as general liability insurance, professional liability insurance, and workers compensation insurance (if you have employees).
- Develop Your Brand.
The most successful and memorable businesses have developed compelling brands. Consider what your business stands for. What are its core values? As much as customers shop for high-quality goods and services, they also look for companies with distinct and attractive brands.
- Develop Your Web Presence.
These days, a professional website is necessary for building your business's long-term success. A web presence allows potential customers to discover your business and the goods or services you offer, as well as enhances your credibility. Utilizing review sites (e.g. Yelp), social media (e.g. Twitter, Facebook), and registering for a Google business profile are also great promotional tools.
If you need help starting a business in Montana, you can post your legal need on UpCounsel's marketplace. UpCounsel accepts only the top 5 percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law and average 14 years of legal experience, including work with or on behalf of companies like Google, Menlo Ventures, and Airbnb.