Idaho, Wyoming, and Montana score a Top 10 ranking in small business growth
Small businesses are an essential part of a strong economy, and in the Mountain West, recent data suggest that the entrepreneurial spirit remains strong.
Idaho, Wyoming, and Montana all ranked among the top ten states nationwide for small business growth. Idaho placed second, Wyoming ranked seventh, and Montana came in ninth. The results highlight the region’s entrepreneurial activity and reinforce the importance of tax and regulatory policies that allow businesses to thrive and expand. Washington did not rank among the top ten states for small business growth in the study, coming in at 25th.
Idaho led the region, recording a 3.53% increase in small businesses and adding 1,595 businesses between 2021 and 2022. Only Nevada, which experienced 3.83% growth, ranked higher. Growth extended across the state, with Pocatello leading Idaho cities at 5.63%, followed by Coeur d’Alene at 5.17% and Idaho Falls at 4.6%. Even outside of the larger cities, smaller communities also experienced increases, which created opportunities for local entrepreneurs.
Governor Brad Little emphasized the importance of ensuring that employers can invest and grow while simultaneously preparing workers for new job opportunities. Little said, “Idaho continues to stand out as a place where people want to live, work, raise a family, and build a business. These projections are another strong sign that our economy is positioned for continued opportunity.”
Wyoming and Montana also performed well in the national ranking. Wyoming ranked seventh, with a growth of 2.83%, and Montana ranked ninth, with a growth of 2.63%. Together with Idaho, the results put all three states among the top 10 nationally for small business growth during the period studied.
These rankings also provide an opportunity to examine the policies that can help entrepreneurs succeed. As we previously highlighted, Idaho’s efforts to review administrative rules and reduce regulatory burdens are paying off. Idaho reduced its administrative code from 8,553 pages to 5,318 pages through regulatory reforms. Occupational licensing reform is also important. Unnecessary licensing barriers can make it harder for qualified workers to enter occupations and pursue economic opportunities.
These reforms matter to small businesses because entrepreneurs often must navigate licensing requirements, administrative rules, and other government processes before they can begin operating. Complicated requirements can consume time and resources that business owners could otherwise use more efficiently.
Montana has also embraced regulatory reforms, as the Treasure State amended or repealed 25% of state regulations over four years through its Red Tape Relief Task Force. The effort, as well as reductions in business filing fees, has saved Montana businesses approximately $1.14 million.
Regulatory reform does not require eliminating every rule, but evaluating whether requirements serve a clear public purpose and whether their costs are proportionate to their benefits.
Along with regulatory reform, taxes also play an important role in business health. Although Montana has already enacted major tax relief, moving to a flat tax could improve the state’s ability to compete for workers, businesses, and investment.
Of course, taxes and regulations are not the only factors affecting business growth. No single policy reform will guarantee that a business will succeed. Nevertheless, tax competitiveness and regulatory efficiency are among the factors policymakers can directly influence.
Idaho’s second-place finish, Wyoming’s seventh-place ranking, and Montana’s ninth-place ranking give all three states reason to recognize their small business communities and their success. Washington’s lackluster ranking shows that additional tax and regulatory reforms are needed.
The challenge now for all states is to continue with pro-growth policies that make it easier for entrepreneurs to start and grow businesses.
