KC small businesses part of national growth trend
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Kansas City is part of a national entrepreneurial hot streak, where Americans are starting businesses at a record pace.
Why it matters: The high rate of new startups in the years since the pandemic likely plays a role in KC's economic resilience and that of the U.S.
The big picture: Small businesses employ about half of the American private-sector workforce. So far this year, the nation's smallest businesses are doing the bulk of hiring.
- Through the first four months of 2026, the smallest companies — those with fewer than 20 employees — have added 236,000 jobs, according to payroll processor ADP. That accounts for a whopping 95% of the economy's net gains over that period.
- In Kansas City, first-time employers create 66% of the region's net new jobs, according to a recent report by KCSourceLink, a network of more than 200 entrepreneur-support organizations run out of UMKC's Innovation Center.
State of play: Americans are filing paperwork to start new businesses at near-record rates — about 66% above pre-pandemic norms. This year, those applications are running even higher.
Zoom in: KCSourceLink saw 80% year-over-year growth in entrepreneur meetings, along with gains in web traffic and completed business action plans.
- Callie England with UMKC's Innovation Center says the data represents "real people actively seeking support to start and grow businesses."
Yes, but: Would-be entrepreneurs filing applications with planned wages — meaning they intend to take on employees, the surest sign of a real, lasting company — fell back to pre-pandemic levels in 2025 and are tracking even lower this year.
- That means the startup surge is increasingly composed of solo operators rather than businesses with plans to hire.
What they're saying: The increase aligns with "what we have historically seen during periods of economic uncertainty," KCSourceLink program Director Rebecca Castro tells Axios.
- That means "more individuals exploring entrepreneurship, whether to pursue a long-held idea, create additional income, or respond to changes in the labor market," she says.
What we're watching: AI tools may be enabling this. A one-person business can do the work that previously required staff.
- Fed research shows AI adoption among the smallest businesses — those with fewer than 50 employees — is stronger than would be expected based on size alone.