KCMO investing $900K in entrepreneur support as advocates push for more funding

The City of Kansas City, Missouri, has budgeted an $900,000 investment in its KC BizCare Office as part of a broader plan to better support the metro’s entrepreneur community

While advocates from within Kansas City’s entrepreneurial community love the city as much as its next fan, they acknowledge it can be a tough place to get a business started — and keep it afloat.

A newly approved tranche of funding — $900,000 within KCMO’s 2024-2025 budget to expand offerings within the KC BizCare Office — is just the beginning, say leading entrepreneurs who lobbied the city for a greater financial commitment to its emerging startups and small businesses.

The budget was approved March 28. The text of the full budget has not yet been approved, but is expected by April 28.

They’re at a disadvantage

Wes Rogers sees KC entrepreneurs competing at an unfair disadvantage, he said, noting it only takes looking into other nearby communities to see the disparity.

Wes Rogers, KCMO city councilman, speaks with Eze Redwood, entrepreneur, March 27 during a KCMO budget hearing; photo courtesy of Darcy Howe, KCRise Fund

“We’ve got multiple jurisdictions, and the non-Kansas City jurisdictions are just a lot easier to do business in than Kansas City is,” said Rogers, second district councilman for Kansas City, Missouri

“That’s just the reality of it,” he added. “Kansas City is half a million people versus even one of our bigger neighbors like Overland Park or Independence where there’s 100,000 or 150,000. There’s going to be more processes. We can’t change that.”

While Rogers serves on the city council — and is chair of KCMO’s Small Business Task Force — he also has ties to a small business himself. His family owns Prime Chemical Solutions, a cleaning equipment leasing and solvents company that employs two generations of the Rogers family and was founded in the 1950s. 

So, he knows business and entrepreneurship challenges firsthand, he said. 

“When it comes to getting a permit, when it comes to paying a fee, when it comes to getting an inspection, it’s longer, it’s more complicated in Kansas City than it is any other city anywhere near Kansas City,” Rogers observed. “So, it really puts small businesses at a disadvantage.” 

In the face of an increasingly tough business environment, the city has an opportunity and obligation to improve processes that would not just benefit small businesses — taxpayers and the city itself would win, too, Rogers added.

What’s standing in the way?

Entrepreneur and consultant Eze Redwood — among the organizers of a group of small business advocates who pushed the city for funding — brings to the table a list of specifics he hopes will be addressed in the year to come. 

“I think doing business inside city limits is difficult because City Hall does not realize the importance of small businesses to the city,” he said. “[Small business is] the fabric that is Kansas City, that makes people want to come visit Kansas City.” 

KCMO’s investing and banking environment within the city leads to an “ultra conservative” mindset dominated by dreams of high-dollar mergers and acquisitions, Redwood said, adding it’s a mindset that drives lenders to keep “pristine” balance sheets and “top-tier commercial lending portfolios.”

“That makes them risk averse. Even successful entrepreneurs can easily be viewed as a risk,” he said. “You can have all the cash flow in the world, and if your credit score is a 600, it would be significantly challenging to find funding.” 

Redwood’s claims are supported by research from the Ewing Marion Kauffman Foundation. It notes in its 2023 report, “Access to Capital for Entrepreneurs: Removing Barriers,” that “businesses in the six-county Kansas City metropolitan area [faced] an acute capital gap estimated at more than $1.4 billion in 2020.” 

In a post-COVID and high-inflation environment, though, this shortfall has likely grown, Redwood said.

Millions more for tech startups, mom-and-pops alike

One of the co-founders of Made in KC — the local-first retailer that spread across Kansas City over the past 12 years — has been an essential voice rallying support for more small business support from the city.

Tyler Enders’ dream started as a pop-up; now Made in KC works with more than 250 local artists, makers and small business owners.

The entrepreneur and his fellow advocates — including Rogers; Redwood; Melissa Roberts Chapman, a longtime entrepreneur community advocate who now works as director of entrepreneurship and ecosystems at the Federation of American Scientists (FAS); and Adam Arredondo, community engagement director for Tractics; among others — are close to securing millions of dollars of additional city funding that could go a long way to mitigating the challenges businesses face in KCMO.

If all goes well over the next few weeks, Enders said, the city will indefinitely redirect 4.5 percent “of all revenues generated by small businesses for further small business support.”

“We’re hoping this will total over $10 million annually,” he added, offering an estimate that Rogers and Redwood also said they feel is a solid bet. 

Enders and the group of advocates also hope the city will consider the recommendations of Cities Work — a consulting group consulting with KC’s new Small Business Task Force that Enders said has done insightful research on ways the city can improve processes, requirements and systems.

RELATED: Starting a business in KCMO is too expensive, study says; here’s how the city can cut those costs

And, while potentially securing a funding source would be a win, that’s just the beginning, he added. Advocates already have plans for any potential new streams of funding. 

“That funding [will] support a range of activities from access to capital to procurement practices at the city to streamlining licensing steps and reducing fees,” Enders said. “While Kansas City is noted for its high level of business starts, we also hold the undesirable designation of having a high level of business closures.”

Enders and his fellow entrepreneurs are currently seeking co-sponsors for a city ordinance that would finalize their efforts.

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