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