Small Business Profile: MONTANA 

Small businesses are the heart of Montana’s economy. Research by the Office of Advocacy shows that small businesses create most of the nation’s net new jobs, and they bring dynamic ideas, innovative services, and new products to the marketplace. They account for almost all of the nation’s employer firms and generate half of non-farm private output. New business creation is key to a state’s ability to increase its gross state product, state personal income, and total state employment. This small business profile uses the most recent data available to demonstrate the valuable contributions that small businesses make to Montana’s economic health.

Number of Businesses.  Montana had an estimated total of 115,700 small businesses. Employer firms totaled 36,600 in 2006, up 2.9 percent from the previous year. Of this total, an estimated 97.8 percent, or 35,800 were small. Self-employment (incorporated and unincorporated) totaled 88,300 in 2006, an increase from 85,400 in 2005. Non-employer firms totaled 80,900 in 2005, an increase of 2.7 percent since 2004. (Sources: U.S. Dept. of Labor, Employment and Training Administration; U.S. Dept. of Commerce, Census Bureau; U.S. Dept. of Labor, Bureau of Labor Statistics.)

Women-owned Firms. In 2002, businesses owned by women numbered 24,500, represented 24.5 percent of the state’s 100,400 businesses, and generated $2.1 billion in revenues. Employer firms owned by women totaled 4,600, an increase of 18.1 percent since 1997. Women numbered 30,000 or 34.0 percent of the state’s self-employed persons in 2006, an increase of 3.3 percent from the previous year. (Sources: U.S. Dept. of Labor, Bureau of Labor Statistics; U.S. Dept. of Commerce, Census Bureau.)

Minority-owned Firms. In 2002, Asian-owned firms totaled 500, and 300 of them were employer firms; Black-owned firms numbered 200, and employer firm data are unavailable; Hispanic-owned firms totaled 1,000, and data on employer firms are not available. American Indian and Alaska Native-owned firms numbered 2,000, and 400 of them were employer firms; while Native Hawaiian and other Pacific Islander-owned businesses numbered 40, and data on employer firms are unavailable. (Source: U.S. Dept. of Commerce, Census Bureau.)

Business Turnover. An estimated 4,727 new employer firms were created in 2006, which is 0.9 percent less than the number created in 2005. Business bankruptcies totaled 39 in 2006, down from 129 the previous year, while business terminations increased from 4,400 in 2005 to 4,500 in 2006. (Sources: U.S. Dept. of Labor, Employment and Training Administration; Administrative Office of the U.S. Courts; U.S. Dept. of Commerce, Census Bureau.)

Employment. Small firms employed 71.4 percent of the state’s non-farm private labor force in 2004, which was above the national average of 50.9 percent. These 29,900 firms accounted for 97.8 percent of the state’s employer businesses, and they employed 224,700 people (Table 1). Small businesses added a total of 8,900 net new jobs between 2003 and 2004 (Table 2). (Source: U.S. Dept. of Commerce, Census Bureau, Statistics of U.S. Businesses.)

Small Business Income. Non-farm proprietors’ income, which is a share of small business income, increased by 6.9 percent, from $2.9 billion in 2005 to $3.1 billion in 2006. (Source: U.S. Dept. of Commerce.)

Finance. Commercial banks and savings institutions continued to be important sources of small business financing. The number of lending institution branches in the state increased in 2006 (Table 3). For a list of financial institutions in the state that make the most loans to small businesses, visit www.sba.gov/advo/research/lending.html.

To learn more about the Office of Advocacy’s data and analyses of small business, visit www.sba.gov/advo/research, call (202) 205-6533, or email advocacy@sba.gov.

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