Americans are starting businesses at a record pace — an entrepreneurial hot streak that helps set the U.S. apart from the rest of the global economy.

The big picture: Small businesses employ about half 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, companies with fewer than 20 employees have added 236,000 jobs, according to ADP — 95% of the economy's net gains.

Small businesses drive our economy.

• "You rarely find a large business that just appears out of nowhere with hundreds, if not thousands, of employees," Holly Wade, executive director of the National Federation of Independent Business, a small business lobbying group, tells Axios. "They start off small."

State of play: Americans are filing paperwork to start new businesses at near-record rates — averaging 470,000 applications a month in 2025. That's about 66% above pre-pandemic norms.

• This year, those applications are running even higher.

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 comprised of solo operators rather than businesses with plans to hire.

Zoom out: 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.

What to watch: The White House is betting AI will be the "great equalizer," Trump's top economist Kevin Hassett told Axios recently.

• "It's making it so that small businesses who start to use AI can compete better with big businesses," Hassett says.

The pandemic may have touched off a historic startup boom, but many of those new businesses have struggled. Truth is, it's been pretty hard to run a business in the recently rocky economy.

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 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 an NFIB survey.

🌀 South Louisiana is cleaning up after Tropical Storm Arthur late last week.

• Nine tornadoes touched down across Southeast Louisiana and Mississippi. One in Avondale sent two people to the hospital. (WWL)
• Kenner got about 6 inches of rain in two hours, stranding dozens of drivers in flooded streets and blocking airport access. (Fox 8)
• New Orleans had numerous reports of tree damage, and SWBNO says some pumps lost power.

🪺 Baby night herons are nesting in the trees on Esplanade Avenue near the Degas House. Signs in the area ask drivers to be mindful. (Instagram)

• WWNO has a great explainer about the rookery.

🌶️ New Tabasco CEO Adam Graves is the first person outside the McIlhenny family to lead the hot sauce company, which is on track to break its own sales records this year. (The Times-Picayune 🔒)

📺 Chef Dook Chase's new national cooking series with WYES debuts next month. (Facebook)

🚔 Col. Robert Hodges, the New Orleans native who leads the Louisiana State Police, is retiring. He'll be replaced by Lt. Col. Frank Besson. (WAFB)

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

• Restaurant merch "is the new band tee," as many have put it.

The big picture: The pandemic forced small businesses to get more creative online about reaching customers. The loyalty has stuck around and evolved.

State of play: Hats, hoodies and pins are now part of the restaurant playbook.

• They drop merch like streetwear brands, crowdsource ideas from followers and document behind-the-scenes stories on social media.

Case in point: Most New Orleans restaurants sell shirts, and many go a step further.

• Parkway has aprons and poboy beads.
• Li'l Dizzy's has gumbo kits.
• Turkey and the Wolf has plates.
• Commander's Palace has a whole merch shop next door.

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 had immigrant founders.

• Immigrants or the children of immigrants founded nearly half of Fortune 500 companies as of 2023, according to one analysis, including Nvidia, Tesla and 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 largest ownership transition in American history is quietly underway: Baby boomers are retiring, and no one knows who — if anyone — will take over their small businesses.

Why it matters: Baby boomers own about a quarter of all small businesses, about double the share held by their predecessors 20 years ago, McKinsey estimates.

• Their children often don't want to take over the family business, a particularly acute issue for Louisiana's fishing industry.
• The risk is those firms close instead of selling to a capable investor, slowly wiping out jobs across the country.

By the numbers: About 6 million businesses with fewer than 500 employees will face ownership transitions between now and 2035 as owners retire, according to McKinsey.