How to Start a Construction Company in Montana | Essential Guide

by
Montana Construction Company

Starting a construction company in Montana can be lucrative and rewarding for anyone with the right skills, resources, and determination. With a strong demand for quality construction services and a consistently growing population of 1,112,668 (2024 data), there is always room for new Limited Liability Companies to thrive in this industry. However, starting a construction company is a challenging task and requires careful planning, dedication, and hard work.

In this article, Webinarcare Editorial Team will discuss the necessary steps to Start a Construction Company in Montana and provide valuable tips for ensuring your success in this competitive industry.

How to Start a Construction Company in Montana

What is a Construction Company?

A construction company in Montana is a business that specializes in the planning, design, and execution of construction projects. These projects can range from residential homes to commercial buildings and infrastructure projects such as roads, bridges, and utility systems. Montana construction companies must adhere to local building codes, regulations, and licensing requirements to ensure their projects are safe, efficient, and compliant with state standards.

Montana construction companies often offer various services, including general contracting, design-build, and specialized construction services. They collaborate with various stakeholders, such as architects, engineers, developers, and property owners, to bring projects to life. By employing skilled tradespeople, project managers, and other professionals, construction companies in Montana work to deliver high-quality, durable structures that meet their client’s needs and contribute to their community’s development and growth.

If you plan to start an LLC for your construction company, hire the Best LLC Services in Montana. They offer the top features and prices for you to check out.

LLC Service

Rating & Pricing

Top Features

Learn More

#1 Recommendation

$0 + State fee

  • Free LLC Formation

  • Legal Support

  • Highly Reputed Company

Learn More

$299 + State fee

  • Single LLC formation package

  • Flat price for all services

  • Legal consultation

Learn More

It is suggested that you speak with a legal professional before you begin setting up a construction company. They’ll understand what’s best for you and your future company. To safeguard your personal assets from business debts, you can always start an LLC in Montana.

– WEBINARCARE EDITORIAL TEAM

How to Start a Construction Company in Montana

To launch a construction business, you must follow the guidelines that include researching the construction industry, developing a business plan, registering your business, securing funding, purchasing equipment and material, hiring a skilled team, and marketing your construction company.

Step 1: Research the Construction Industry

Before diving into starting your construction company, it’s essential to understand the local construction industry in Montana. Research your area’s market trends, major players, and potential competition. This will help you identify gaps in the market that your company can fill and allow you to make informed decisions about the types of services you want to offer.

Some key areas to research include:

  • Types of construction projects in demand (residential, commercial, etc.)
  • The average cost of construction projects in your area
  • Local building codes and regulations
  • Key stakeholders in the industry (architects, developers, etc.)
  • Licensing and certification requirements for contractors in Montana

Step 2: Develop a Business Plan

A well-thought-out business plan is crucial for the success of any new business, including a construction company. Your business plan will act as a roadmap for your company’s growth and development, helping you make informed decisions and keep your business on track.

Some key elements to include in your construction company business plan are:

  • Company Overview: Describe your company’s mission, vision, and goals. Include the legal structure of your business (LLC, corporation, sole proprietorship, etc.) and your company’s name and location.
  • Market Analysis: Summarize your research on the local construction industry, including the target market, competition, and growth opportunities.
  • Services Offered: Clearly define the types of construction services your company will offer, such as general contracting, design-build, or specialized construction services.
  • Marketing and Sales Strategy: Outline how to attract and retain clients and your strategies for generating leads and closing sales.
  • Management and Organization: Detail the roles and responsibilities of your management team and any key personnel you plan to hire.
  • Financial Projections: Provide a realistic estimate of your company’s financial performance over the next few years, including projected income, expenses, and profits.

Step 3: Choose a Business Name

Selecting a name for your Montana construction company is essential to forming. Your business name should be unique, memorable, and reflective of your products or services. There is a complete guide on Montana Business Name Search for you to have a proper Montana construction business name. 

In Montana, if you do not wish to file your construction business company right away but want to hold the name that you have decided on, then you can reserve your Montana construction business name for 120 days. You must file a name reservation application with the Montana Secretary of State to keep the name. 

You can register your business under a different legal name if your preferred name isn’t available. Once you have chosen a name, you can submit an application for Montana DBA (doing business as). In this manner, you can choose any name you desire for your business. A DBA allows a company to operate under the name of the person or entity who owns it. If you have decided to file for a DBA, you can file it in one method, online.

However, before filing a DBA, you should know that you need to renew your DBA every five years, which costs $20.

You can check the availability of your desired business name by searching the Montana Secretary of State Business Search‘s website.

Recommended: Embark on your entrepreneurial journey confidently and affordably with LegalZoom’s DBA service, the beacon that guides businesses to credible branding and comprehensive compliance. Discover how effortless success can truly be!

– LegalZoom – ($99 + Filling Fees)

Step 4: Register Your Construction Company

Register your business with the appropriate government agencies before officially starting your construction company in Montana and obtain any necessary licenses and permits. 

Hire a Registered Agent

A Registered Agent is a person or entity responsible for receiving legal documents and official notices for your construction business. The qualifications of a Registered Agent vary depending on the jurisdiction, but generally, they must meet the following criteria:

  • Age: The Registered Agent must be at least 18 years old.
  • Residency: The Registered Agent must reside where the company is registered or authorized to do business in that state. In some jurisdictions, a domestic corporation or limited liability company (LLC) can act as its Registered Agent if it has a physical address in Montana.
  • Physical Address: The Registered Agent must have a physical street address, not just a post office box, where the company is registered. This is where they will receive official correspondence and legal documents on behalf of the company.
  • Availability: The Registered Agent must be available during normal business hours (9 a.m. to 5 p.m., Monday through Friday) to receive and sign official correspondence and legal documents.
  • Good Standing: If the Registered Agent is a business entity, it must be in good standing with the state and not be in default, suspended, or revoked.
  • Compliance: The Registered Agent should know Montana requirements and deadlines for the company, such as Annual Reports and Montana franchise tax filings, and ensure that the company stays compliant. 

You can serve as your Registered Agent, appoint a friend or family member, or hire a Professional Montana Registered Agent Services.

Recommended: Professional services will ensure your business gets legal notices and critical mail. With LegalZoom’s Registered Agent Services, they offer peace of mind and expert support for businesses, ensuring compliance and seamless communication with state authorities. That’s why we recommend using –

LegalZoom – $249/year

File For Articles of Organization or Articles of Incorporation

If you form an LLC for your construction company, you must file the Montana Articles of Organization, which costs $70. However, you must file the Articles of Incorporation if you form Montana Corporation for your construction company. The Articles of Incorporation filing fee costs $70 for filing online.. It is crucial to provide accurate and complete information on this document, as errors or omissions may result in delays or rejection of your filing.

  • Online Filing: Create an account/Log in to the SOS site, get the online form, fill it, and submit online 
  • Offline Filing: there’s no offline method of filing the documents

Recommended: Filing the Articles of Organization and the Articles of Incorporation is easy and hassle-free if you hire a professional service. We recommend using –

LegalZoom – ($0 + State Fee)

Create an Operating Agreement

Operating Agreement is a document that contains all of your company’s organizational details. Drafting an operating agreement in Montana is optional. Yet, having one as an internal document is strongly advised. 

Recommended: Creating an Operating Agreement is like having a personal legal guide at hand; it’s efficient, thorough, and ensures the smooth and compliant operation of your business. With LegalZoom’s operating agreement, it will protect your rights as an owner, keeping misunderstandings at bay and your business on the path to success. That’s why we recommend using –

LegalZoom – Starts at $99

Obtain an Employer Identification Number

You must first obtain Montana Employer identification number (EIN) from the IRS if you will open a bank account or hire an employee for your Montana construction company. 

The application of an EIN in Montana can be through the following:

  • Apply Online- The online EIN application is the preferred method for customers to apply for and obtain an EIN.
  • Apply by Fax- Taxpayers can fax the completed Form SS-4 application to the appropriate fax number), after ensuring that the Form SS-4 contains all of the required information.
  • Apply by Mail- The EIN application Form SS-4 can be filed via mail. The processing time frame to receive the mail is four weeks.
  • Apply by Telephone-International Applicants – International applicants may call 267-941-1099 (not a toll-free number) from 6 a.m. to 11 p.m. (Eastern Time) Monday through Friday to obtain their EIN.

Recommended: Professional services have the EIN included in their LLC formation package. We recommend using –

LegalZoom – ($0 + State Fee for LLC formation)

Step 5: Obtain the Necessary Licenses and Permits

Starting a construction company in Montana requires several licenses and permits. Some of the most common licenses and permits you’ll need include the following:

  • Business License: Your local city or county government may require Montana Business License. The business license fee in Montana ranges from $50 – $300.
  • Contractor’s License: A contractor’s license is required in most states for construction businesses that perform specific types of work, such as general contracting, electrical, plumbing, HVAC, or other specialized trades. Requirements for obtaining a contractor’s license may include passing an exam, providing proof of experience, and obtaining bonding and insurance.
  • Building Permits: Construction projects typically require permits issued by the Montana building department. Building permits ensure the construction project complies with local building codes and regulations.
  • Occupational Licenses: Some states may require occupational licenses for specific types of work, such as asbestos abatement, lead paint removal, or the installation of fire protection systems. Check with your state’s licensing board to determine if any special licenses are required for the work your construction company will perform.
  • Montana Sales Tax Permit: A sales tax permit from the Montana Department of Revenue allows you to collect sales tax. Currently, the Montana sales tax rate is 0% since Montana has no sales tax.
  • Environmental Permits: Depending on the nature of your construction projects, you may need to obtain environmental permits, such as stormwater discharge or air quality permits.

Step 6: Secure Funding

Starting a construction company requires significant capital to cover equipment, materials, and labor costs. To secure funding for your Montana business, you must explore various financing options and determine the best fit for your needs.

When seeking funding, be prepared to present your business plan and financial projections to potential lenders or investors. This will demonstrate your commitment to your company’s success and help build their confidence in your ability to repay the loan or generate a return on their investment.

However, consider applying for your construction company’s Montana Small Business Loans.

Step 7: Purchase Equipment and Materials

Once you have secured funding for your Montana construction company, you must purchase the necessary equipment and materials to begin operations. This may include items such as:

  • Construction vehicles (trucks, excavators, etc.)
  • Power tools and hand tools
  • Safety equipment (hard hats, safety goggles, etc.)
  • Building materials (lumber, concrete, etc.)
  • Office equipment and supplies (computers, printers, etc.)

Invest in high-quality equipment and materials, as this will help you deliver exceptional results to your clients and build a strong reputation in the industry. Consider purchasing insurance for your equipment, as this can help protect your investment in the case of theft, damage, or accidents.

Step 8: Hire a Skilled Team

Your Montana construction company’s success will largely depend on your team’s skills and expertise. Hire individuals with experience and knowledge in the construction industry to build a strong workforce. This may include:

  • Project managers
  • Construction laborers
  • Skilled tradespeople (electricians, plumbers, etc.)
  • Architects or engineers
  • Administrative staff (accountants, receptionists, etc.)

In addition to hiring qualified employees, invest in ongoing training and development programs to help your team stay current on industry trends, technologies, and best practices. This will improve the quality of your services and help you attract and retain top talent in the competitive construction industry.

Step 9: Market Your Construction Company

You must develop a comprehensive marketing strategy to attract clients and grow your Montana construction company. This may include building a professional website that showcases your services, portfolio, and testimonials from satisfied clients; creating and distributing print materials, such as brochures, business cards, and direct mail advertisements; networking with industry professionals, such as architects, developers, and real estate agents, to generate leads and referrals, and utilizing social media and digital marketing strategies to reach a wider audience and drive traffic to your website.

By consistently promoting your Montana construction company and showcasing your expertise and quality work, you can build a strong reputation in the Montana construction industry and attract a steady stream of new clients.

Benefits of Forming a Construction Company

Forming a Construction LLC is best for a start-up company since it offers the following advantages.

Limited Liability Protection

LLC provides limited liability protection to its owners, also known as members. This means that the personal assets of the LLC members are separate from the company’s debts and liabilities. In the construction industry, where accidents, property damage, and contractual disputes occur, limited liability protection is crucial to protect business owners’ assets.

Pass-through Taxation

An LLC typically offers pass-through taxation, meaning the company’s profits and losses are reported on the owner’s tax returns. This avoids the double taxation corporations may face, where the company and its shareholders are taxed separately. Pass-through taxation can lead to potential tax savings for the Montana construction company’s owners.

Flexibility in Management

LLCs have a more flexible management structure than corporations. They do not require a board of directors, and the owners can choose how to manage the company through member or manager management. This flexibility allows Montana construction companies to adapt their management structure as needed.

Simpler Record-Keeping and Compliance

LLCs still require formalities; they typically have fewer record-keeping and reporting requirements than corporations. This can save time and resources for Montana construction companies, allowing them to focus on their core business operations.

Credibility

Forming an LLC can provide the Montana construction company with increased credibility and professionalism in the eyes of clients, vendors, and financial institutions. This can be beneficial in securing contracts and building a positive reputation in the industry.

FAQs

What are the requirements for starting a construction company in Montana?
Montana requires all construction businesses to hold a contractor’s license.
How do I obtain a contractor’s license in Montana?
You must fill out an application, provide appropriate documentation, and pass the license exam.
Can I use my out-of-state contractor’s license in Montana?
No, you must obtain a Montana contractor’s license to perform construction work in the state.
How long does it take to get a Montana contractor’s license?
The process can take several months, so it’s advisable to start early.
What type of insurance do I need to start a construction company in Montana?
You will need liability insurance, workers’ compensation insurance, and property insurance.
How much does liability insurance cost for a construction company in Montana?
The cost of liability insurance depends on several factors, such as the size of the company and the type of work performed.
How many employees can I hire when starting a Montana-based construction company?
There are no explicit restrictions on the number of employees you can hire.
Do I need to register my construction company with the state of Montana?
Yes, registration is required with the Montana Secretary of State.
What type of business entity is recommended for a construction company in Montana?
An LLC (Limited Liability Company) is often a wise choice due to its flexibility and legal protections.
Do I need a business plan to start a construction company in Montana?
A well-crafted business plan is often beneficial for securing financing and setting goals.
What is the minimum capital required to start a construction company in Montana?
There is no minimum amount of capital required to start a construction company, but it’s advisable to have adequate funding to cover startup costs.
Are there any grants or loans available for Montana-based construction companies?
Yes, there are several small business financing programs available, such as the Montana Loan to Defray Certified Technological Company Licensing fees.
What is the average success rate for construction companies in Montana?
The success rate varies depending on multiple factors, such as the quality of work and timing.
Are there particular areas of Montana that are more conducive to starting a construction company?
Many areas of Montana have robust construction demand, making it ripe for this type of business.
What are some examples of successful construction companies currently operating in Montana?
Longfellow Construction, Inc and Hanser’s Automotive & Wrecker are both examples of successful companies.
What types of construction projects are most common in Montana?
Many construction projects in Montana are focused on highway infrastructure upgrades and fossil fuel extraction facilities.
What are the biggest risks associated with starting a construction company in Montana?
One of the most significant risks is a lack of demand in the specific region, causing low profits or business failure.
How do I make sure my construction company is in compliance with Montana’s labor laws?
Check with the Montana Department of Labor and Industry for the state’s labor laws and regulations.
What permits and licenses do I need before starting construction in Montana?
You’ll likely need to obtain several permits, including a building permit for construction of any physical structure, among others as per project specifics.
How much do construction workers get paid in Montana?
Between $15-$20 per hour is typical for Residential and sub-contracts and as high as $50-$60 for highly trained specialized skilled people.
Do I need a specialty license to offer certain construction services in Montana?
Yes, any team training offered by Oregon State will require additional certifications or licenses.
Can I use Montana-made products for construction projects?
Yes, using locally sourced materials is often preferred in Montana for a variety of reasons.
How long does it take to build a typical home in Montana?
Building a standard residential property can take anywhere from 6-12 months, depending on various factors.
What should I look for when hiring subcontractors in Montana?
It is crucial that subcontractors are licensed to handle the specific tasks for the project, as needed.
How do I market my construction company in Montana?
Establish yourself in high-density location sites with strong online presence, spreading word of mouth where possible, and advertise more openings for attracting customers.
What are the benefits of starting a construction company in Montana?
With a resurgence of interest in relocating to more open land throughout the United States construction projects appear to be on the rise. Montana is known for supporting such Public infrastructure, as well as offering construction or trade-inclined incentives to assist starting the business.
When is the best time to launch my construction company in Montana?
Montana provides clearance of land for building grounds year around, launch when you have secured well-rounded team/skills needed requirements.
How do I evaluate the competition for my construction company in Montana?
Do research in the higher traffic areas and network with industry professionals to step off to the right start.
Do construction companies in Montana pay taxes?
Of course, as a licensed construction company you do pay tax (sales tax, income tax) at relevant rate which is often 4-6% in the state of Montana.
How do I secure reasonable payment options for customers once my construction business takes off in Montana?
Request project-specific down payment that covers excess working expenses. Unless payments cover the expenses accordingly, project advancement to complete won’t be proposed.

Also Read

Conclusion

Starting a construction company in Montana can be challenging yet rewarding for those prepared to invest the time, effort, and resources necessary for success. By following the steps outlined in this article and dedicating yourself to providing exceptional service and quality work, you can create a thriving construction business that stands out in the competitive Montana market.

Leave a Comment