Montana Is Good At Producing Entrepreneurs, But Growth Among Startups Is Weak, Expert Says

By Annie Pentilla The Montana Standard, Butte

WWR Article Summary (tl;dr) One in 10 Montanans own a business, and Montana ranks number one in the country for the share of its residents who own a business as their primary source of income.

The Montana Standard, Butte

The state of entrepreneurship in Montana is a "mixed bag," showing both weak and bright spots.

That's according to a recent report put out by the University of Montana's Bureau of Business and Economic Research.

Bryce Ward, formerly of the bureau and now co-owner at ABMJ Consulting, presented the report Tuesday in Butte at the NorthWestern Energy building as part of the annual Economic Update Series. The Montana Chamber Foundation hosts the event, which tours communities across the state.

According to Ward, Montana generates many entrepreneurs, and the startups they create tend to be successful.

In fact, one in 10 Montanans own a business, and Montana ranks number one in the country for the share of its residents who own a business as their primary source of income.

Similarly, around 50 percent of new Montana companies manage to stay in business after five years -- a rate that Ward says also ranks Montana near the top.

Yet Montana startups tend to be small and stay small, Ward says.

On average, new Montana businesses come out of the gate with a little less than four employees, the smallest new firm size among all other states, and new companies don't grow very much, even after five years.

But perhaps the most surprising findings in the report are the long-term aspirations among Montana business owners. According to a 2015 survey conducted by the U.S. Census Bureau, only 54 percent of Montana business owners say they planned to grow in terms of either profits or sales. Nationally, 64 percent say they want to grow their business.

So startups in Montana start out small and tend to stay small -- the question is why?

Ward said Tuesday that some factors could include things like access to capital, low population density, and less production of intellectual property, among other factors.

But perhaps Montana just attracts a certain kind of entrepreneur.

"Not every entrepreneur is the same, and not every entrepreneur is trying to do the same thing," said Ward. "Some people are lifestyle entrepreneurs. They're just trying to create a job that satisfies their desires for outdoor recreation or (time with their family). And then there are entrepreneurs that are growth entrepreneurs -- the kind of people who want to grow a business and then sell it for a bunch of money."

To compare the two, he said, is like comparing apples and oranges, and to truly gauge the entrepreneurial ecosystem in a particular area, one would do best by comparing firms with similar goals and who operate in similar ways.

Tania Brackett of Butte wants to grow her business.

She started Wild Horse Meadows Soap Company, an organic and natural skincare business on Harrison Avenue, in 2012 in response to her son's allergic reaction to conventional skincare products. Those products landed her son in the emergency room, which led Brackett on a path to starting a business based on a need. Today, she has contracts with national retailers like T.J. Maxx, Marshalls, HomeGoods, and HomeSense, which mostly feature her projects seasonally and have shipped them all over the world.

Brackett spoke before seminar attendees Tuesday, and she said that one of her struggles as a business owner is getting into local stores, some of which tend to favor products from overseas because of their lower price.

Brackett later told The Montana Standard that what she needs to make her business to grow is access to funding. She added that her long-term vision includes seeing her products in stores across the state.

"I like the freedom," said Brackett, a mother of three, when asked what she likes about running her own business. In addition to Wild Horse, Brackett also works as a real estate agent and co-owns Brackett Flooring & Construction with her husband.

Colin Higgins is one business owner in Butte who has successfully grown his company.

Higgins and his brother-in-law Mark Thompson decided to purchase MacKenzie River Pizza in Butte in the 2000s, and together they started Granite Mountain Restaurants. Today, the company owns five MacKenzie River locations in three different states, including Montana and Idaho.

Higgins, who could not attend the seminar Tuesday, said he knew from the beginning that he wanted to grow his company, and he partly attributes his aspirations for growth to his father, who he described as a "serial entrepreneur."

"I think it's nature-driven for sure," said Higgins when asked where his stance toward growth comes from. One might describe Glenn Brackett of Sweetgrass Rods in Butte as emblematic of a lifestyle entrepreneur.

Brackett, no relation to Tania Brackett, has been making handcrafted bamboo fly-fishing rods for over 50 years.

In a day and age when everything seems to be factory made and mass produced, Brackett works in his modest shop on Galena Street meticulously creating the rods, a process that involves around 120 separate steps and about 15 to 20 hours of labor, according to a previous article.

Brackett and his late business partner Tom Morgan got into the rod-making business in the 1970s when they purchased R.L. Winston Rod Co. in San Francisco.

The two later moved the business to Twin Bridges, and over the next 15 years, the company grew, offering composite rods alongside the bamboo and producing thousands of rods each year.

In the '90s, they sold Winston, but Brackett stayed behind and continued to work at the rod shop until 2006 when he and others started Sweetgrass.

"You grow a company just so far, and then you reach a plateau," said Brackett in a previous interview, explaining the decision to sell. "We had no interest in taking it to the next step."

With just three employees, Sweetgrass produces just a little over 100 rods per year, and that's the way Brackett likes it.

Keeping the numbers small, he said, ensures the quality of the rods and a meaningful relationship with his customers.

Plus, it leaves enough time to go fishing.

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