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Rapid City, SD
Rapid City
MSA: Rapid City, SD
Best places ranking: #4 among small metro areas
Population: 122,522
Rapid City has long been a tourist destination for travelers making their way to Mount Rushmore, but the city offers scenery and a small-town atmosphere that entrepreneurs say make Rapid City a good location for starting a company.

South Dakota has no income tax and a low cost of living, which contributes to low overhead for Rapid City firms. The city benefits from sales generated by the nearly 3 million tourists who come to Rapid City each year, as well as business from nearby Ellsworth Air Force Base. Manufacturing continues to be a strong industry in Rapid City, and the town has emerging science and research sectors. South Dakota School of Mines and Technology and the nearby Deep Underground Science and Engineering Lab provide local talent and resources for those fields.

Unemployment concerns some Rapid City entrepreneurs, but not in the way you'd expect: Rapid City had an unemployment rate of 4.2% in July, compared to a national rate of 9.4% . While that's good news for local workers, business owners say the scarcity of available employees can make it difficult to fill open positions.

Entrepreneurs say it's the quality of life that keeps them in Rapid City. Friendly neighbors, a wealth of outdoor activities and the scenery of the Black Hills make the city an ideal place for relaxing after hours and raising a family. -Sheena Harrison

Launch Toolbox:
Resources for getting started in Rapid City, SD

BORROW

Local smallbiz lenders

  • Black Hills Federal Credit Union
  • Great Western Bancorporation
  • Wells Fargo & Company
  • Minnwest Corporation
  • Dacotah Banks
See all local lenders

Rapid City Business Statistics
Employer establishments with 1-49 employees
(2007)
4,130 3,516
Small business growth rate
(2004-2007)
7% 4.1%
State business tax climate ranking
(out of 50 states)
2 N/A
Percentage of population with bachelor's degree
(ages 25-34)
28.8% 23.5%
Violent crime
(rate per 100,000 inhabitants, 2007)
336.8 385.1
Property crime
(rate per 100,000 inhabitants, 2007)
2,617.9 3,395.2
Population growth
(2003-2008)
5.7% 4.93%
Per-capita income
(2007)
$36,260 $31,933
Per-capita income growth
(2002-2007)
28.7% 23.6%
GDP (in millions)
(2006)
$4,450 $4,952
GDP growth
(2001-2006)
33% 33%
Average hourly wage
(2008)
$15.87 $17.50
Housing foreclosure rate
(first half of 2009, 1 per every X housing units)
4,885 850
Median rent
(2009, for a 2-bedroom housing unit)
$756 $737
Housing price-to-income (HPI) ratio
(first quarter of 2009)
1.5% 1.8%
Long-term HPI ratio
(20-year average, 1984-2004)
1.3% 1.7%
HPI deviation from long-term average
14% 0.1%

All statistics are for the full Metropolitan Statistical Area. For a complete list of data sources, see "How we picked the Best Places."

From the November 2009 issue
"The costs of living and doing business in South Dakota are less expensive, especially since we have no income tax. So we're able to charge about 10 to 20 less for our services than the national average." -Bryan Vulcan
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The factors that matter most to me are:
 Affordable wages  Few foreclosures
 Educated workers  Low housing costs
 Low crime  High local incomes
 A growing economy  Population growth
 Growing small business population

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This year we partnered with the Ewing Marion Kauffman Foundation to find the 50 most business-friendly communities in America.

With help from Robert Fairlie, an economist and leading scholar of entrepreneurship at the University of California, Santa Cruz, we developed a methodology and sifted through such data on factors such as per capita income, hourly wages, workforce quality, crime rates, taxes and foreclosures. More

Comments? E-mail the editors
Data partners

This package was produced in partnership with the Ewing Marion Kauffman Foundation.

Foreclosure data provided by RealtyTrac.

Housing price-to-income data provided by Moody's Economy.com.

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