Montana is #1 in Top 10 Best States to Start Your Small Business in 2021 – South Dakota #2, Idaho #5, Wyoming #9
Ready to quit your job and become an entrepreneur? You’re not alone. According to the United States Census Bureau, the first three quarters of 2020 yielded more than 3.2 million new business applications, with the fourth quarter not even tabulated yet.
But where you start your business can be just as important as the type of business you open. To make things easier, we looked at the best states to consider starting your small business this year. Our analysis is based on these six essential factors that small business owners must consider when starting a new business. Each factor is scored on a scale from 1-10.
Each business is different, and business owners will likely use additional indicators that are more relevant to their own individual preferences and those relevant to their specific industry.
Total Score: 7.39
Tax Climate: 6.23
Consumer Spending in State: 4.93
Rate of New Entrepreneurs: 9.21
Business Survival Rate: 8.55
Labor Costs: 7.56
Montana’s Department of Commerce welcomes small businesses, offering a variety of resources for new business owners. The best state to open a business in 2021, Montana scores high in several areas, including the number of new businesses calling Montana home. A five-year business survival rate of 53.4% puts the odds of success in your favor.
With a median annual income of $57,153, labor costs should be reasonable, and geographically, Montana holds little risk of natural disasters, with forest fires the major culprit in 2020.
Montana’s corporate tax climate is not as optimal as it could be, with a corporate tax rate of 6.75%, while the individual income tax rate tops out at 6.9%. Montana does not currently have a state sales tax. Consumer spending is also on the rise, going from $41.4 million in 2017 to $45.3 million in 2019, a 9.2% increase, with the state on an upward trend.