Most Pennington County businesses have no employees: 10,204 nonemployer businesses in 2024 against 4,137 employer establishments in 2023 (U.S. Census Bureau). Palmbrook Funding, a small-business funding broker in Rapid City, South Dakota, uses county payroll averages by sector to estimate what a first hire costs and how owners fund the first pay periods.
Pennington County, SD is mostly one-person businesses
Pennington County counted 10,204 businesses with no paid employees in 2024 (U.S. Census Bureau, Nonemployer Statistics 2024) and 4,137 employer establishments in 2023 (U.S. Census Bureau, County Business Patterns 2023). The two programs measure different things in different years, so they are never added, but the gap is clear: most local businesses are one person. Among employers, 2,222 had fewer than five employees and 764 had five to nine.
About 10.9 percent of employed county residents worked for themselves in 2020 to 2024, more of them unincorporated (6.6 percent) than incorporated (4.3 percent) (American Community Survey 5-year estimates). Crossing from owner-only to employer is a step a minority of businesses ever take.
Signs it is time
- You turn away work you could profitably do.
- You spend hours each week on tasks someone else could do for less than your hourly value.
- Customers wait longer than they used to.
- Revenue has held at a level that could carry a salary for several months, not just one good month.
What a worker costs here: county payroll averages
Dividing each sector's annual payroll by its employees gives a rough average per worker, including part-time staff and owners on payroll. These are averages, not wage offers:
| Sector | Payroll | Employees | Average per employee |
|---|---|---|---|
| All employers | $2.68 billion | 52,402 | about $51,100 |
| Ambulatory health care | $285.5 million | 4,083 | about $69,900 |
| Construction | $306.2 million | 4,729 | about $64,800 |
| Professional and technical services | $124.7 million | 2,011 | about $62,000 |
| Retail trade | $324.4 million | 8,867 | about $36,600 |
| Restaurants and bars (NAICS 722) | $151.9 million | 6,100 | about $24,900 |
Source: U.S. Census Bureau, County Business Patterns 2023; averages calculated by Palmbrook Funding. Low averages in food service and retail reflect part-time work.
Costs beyond the paycheck
Payroll taxes, workers' compensation coverage, unemployment insurance, payroll software and the owner's time spent training all add to the wage. A first part-time employee keeps the commitment smaller and is a common way to test the need.
Contractor or employee?
Some owners bring in help as an independent contractor before hiring. Whether a worker can be treated as a contractor depends on how the work is controlled, not on what the paperwork calls it, and getting it wrong has tax consequences. Ask your accountant before choosing.
Funding the first pay periods
A new hire rarely pays for themselves on day one. If the gap between the first paychecks and the extra revenue is short and predictable, working capital can cover it: a lump sum repaid on a schedule. If the extra payroll will rise and fall with jobs or orders, a line of credit lets you draw only what each pay period needs.
Borrowing to cover payroll makes sense only when the hire will bring in more than they cost within a reasonable time. If the business cannot carry the wage after the ramp-up, a loan just delays the problem.
A hypothetical example
A Rapid City, SD residential electrician working alone turns down two jobs a month. A helper at a wage near the county's construction average would cost a little over $5,000 a month in payroll alone. If the extra jobs bring in more than that after materials, the hire pays. A credit line could cover the first two or three months while the extra jobs start billing. The figures are illustrative, not an offer.
Next steps
How a request moves explains what we ask first; local Census statistics give the full county picture; the Palmbrook blog has the other posts.
By Palmbrook Funding ยท Updated