Entrepreneurs deciding where to start their first company would do well to look for a different kind of mountain view.
While founders may think flocking to hubs like Silicon Valley or New York City ensures hyper-growth, a recent report from personal finance website WalletHub puts Montana as the fourth best state to start a business, four places ahead of California and 28 in front of New York. The eighth-smallest state in the U.S, crushed the competition by scoring highly on WalletHub's three dimensions: business environment, access to resources, and business costs.
Montana boasts a relatively large transportation and utilities industry compared to the U.S. as a whole, but high-tech industries are growing, adding jobs to the economy and far outpacing statewide growth, according to University of Montana data. And Bozeman, home to Montana State University, is gaining a reputation as a tech town.
It's also home to eight Inc. 5000 companies, along with the Bozeman-based customer relationship management software RightNow Technologies, which was acquired by software giant Oracle for $1.5 billion in 2011.
Here are three reasons why going west to Montana may have you seeing green:
1. A thriving startup culture
There may not be a ton of people in Montana (a little over a million, according to the latest U.S. Census figures), but those who are there are busy starting businesses. Roughly 430 out of every 100,000 adults become entrepreneurs in any given month, according to the Kauffman Index of Startup Activity, giving Montana the fourth highest rate of new entrepreneurs in the nation. WalletHub reports Montana is No. 5 for startups per capita. Further, the companies that start in Montana, tend to stick out the early days better than elsewhere in the nation. Montana's small business five-year survival rate is ninth in the nation, according to WalletHub.
2. A ready employment base
While entrepreneurs may worry that Montana's small population could make finding employees impossible, statistics reveal otherwise. WalletHub puts Montana as No. 5 for highest availability of talent. However, high-skilled labor is trickier to hire: Montana is second-to-last in higher education resources and near the middle of the pack (No. 21) for college-educated population.
3. Low cost of business
Land is plentiful in Montana, which helps reduce the price of doing business: Office space is among the cheapest in the country. It ranks No. 4 for this feature, with commercial real estate costing $13.18 per square foot, WalletHub finds. That's compared with $153.50 in Midtown, Manhattan. Montana also has the twelfth lowest labor costs and third lowest total effective state and local tax rates on mature--firms more than 10 years old--corporate headquarters.