No. 1 among states for start-up businesses, Montana offers help, too

by Tom Lutey

Montana small business startups aren’t alone when it comes to funding or planning, experts said Tuesday at an economic workshop in Billings.

The workshop, organized by U.S. Sen. Jon Tester, D-Mont., covered everything from financing to business planning. Tester said he organized the event to promote a very important part of Montana’s economy.

“Ultimately, this is about the American dream and people making a living and being able to support their family,” Tester said. “Small business is the basis for that in this state.”

Tester said the new jobs being created in this country are by businesses that are less than five years old. Teaching people how to start and grow new businesses supports those jobs and take pressure off of the government.

Speakers at the half-day event, which took place at Montana State University Billings, included State Auditor Monica Lindeen, who told the 100 attendees that Montana recently made it easier for businesses to sell stock to investors.

For $50, business owners can file the paperwork to sell equity stock and begin selling shares 10 days later. Montana businesses can raise up to $1 million from Montana investors in 12 months under the new rules. Lindeen oversees the program.

Businesses can promote stock to their customers and the general Montana public under the rule without approaching a bank, or crossing into area of more strict investment regulations.

The statistic repeatedly cited by presenters was Montana’s ranking by the Kauffman Index as the No. 1 state for start-up businesses, both in 2014 and 2015.

Other speakers focused on developing business plans and the need for businesses to make community connections, both for advice and investment, but also to make sure that customers see value in a business’s product.

It’s important to have some customer interaction before approaching investors, said Diane Smith of American Rural, which focuses on expanding opportunities for rural and small town businesses by providing access to modern business tools, including technology, education, commerce and healthcare.

Smith is also part of Frontier Angel Fund, a venture capital investment group. She said businesses have to have a product and customers before they attempt to attract investors. Those two things are more important than a person’s cash investment in their own business.

“It’s very little about the money,” Smith said. “What I do want to see is customer transactions. There’s a notion out there that you can get funded for an idea. I hate to burst anyone’s bubble, but ideas are pretty common. We’ve all invented the world’s best dog food, but if you haven’t put it in front of a dog, then the dog don’t know.”