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.

Your local coffee shop isn't just selling breakfast anymore — it's building a fanbase.

• Restaurant merch "is the new band tee."

The big picture: Restaurants, coffee shops, and fitness studios are moving beyond their core products, dropping merch like streetwear, crowdsourcing ideas from followers, and documenting behind-the-scenes stories on Instagram and TikTok.

Case in point: Jackie Nguyen, owner of Cafe Cà Phê, says her artistry and personality are reflected in her business's social media, merch and drinks.

• "Your platform and merch are a reflection of who you are, and that is what people really support," Nguyen tells Axios. "My branding for my coffee shop might as well be a peek into my closet — maximalist, bold, colorful."
• The cafe has roughly 66,000 followers between TikTok and Instagram: "Café Cà Phê customers are some of the most loyal customers I can imagine," Nguyen says.

💭 Travis' thought bubble: After the store had its door smashed, I went out and bought a hat — my little way of supporting local.

The pandemic may have touched off a historic startup boom, but many of those new businesses have struggled.

State of play: Among the new businesses started in 2022, an above-average share shuttered within three years, according to government data.

• Those businesses launched on the assumption that low interest rates and strong demand would last. But they got hit right out of the gate with rapid rate hikes and an inflation shock.

The latest: Confidence among small business owners fell below historical norms in March in the wake of the Iran war energy shock, according to a survey by the National Federation of Independent Business, conducted for the past 50 years.

Immigrants play an outsized role in entrepreneurship, launching more than 20% of U.S. businesses while representing just 15% of the population, according to a National Bureau of Economic Research paper published in 2024.

• About 3.5 million immigrants are self-employed, according to the Immigration Research Initiative.

Zoom in: Many of the country's most valuable companies were founded by immigrants.

• Immigrants or the children of immigrants founded nearly half of Fortune 500 companies as of 2023, according to one analysis.
• Those include Jensen Huang's Nvidia, Elon Musk's SpaceX and Tesla, and Sergey Brin's Alphabet.

What to watch: Mass deportations and stiffer immigration restrictions could undermine small businesses, as entrepreneurs fret about their own residency, face expensive visa rules and struggle to retain foreign-born employees.

🏳️‍🌈 The city council is pushing a new ban on conversion therapy that restricts "dangerous therapies," a workaround designed to comply with a recent Supreme Court ruling. It repealed its 2019 ban a month ago. (KCUR)

• Go deeper: KC's conversion therapy ban is gone, for now.

🏥 Nurses at Research Medical Center say they aren't equipped to safely treat pregnant patients, who still come to the ER after the hospital closed its labor and delivery unit last year. (KCUR)