The previous blog was on Start-Up Business Mistakes. This blog focuses on some things new start-up businesses in Kona, Hawaii should consider in the business planning stages.
- Avoid the highly competitive business sectors. Fishing charters, manta night snorkel tours, burger restaurants and massage therapy are very over-represented in Kona. Find a different take on these ideas and you might have a business.
- Find a high margin business that doesn’t require you to compete on price. Most business owners vastly underestimate their costs and overinflate their sales projections. Solar, up until recently, has been a high margin business that did not compete on price. Now, with many new entrants into the area the past few years, that may be changing.
- Market your business creatively. Spending a boatload of money on radio or newspaper ads will only reach a relatively small percentage of the local population. Work on word-of-mouth advertising, community engagement and online marketing.
- Plan for a tough first year. Make sure you have enough to survive at least six months, if not a year, before you begin. Your expenses will be high; you can count on this.
- Be realistic. Someone else has thought your idea before you. Why did they not pursue the idea? Or, have they pursued the idea and failed? It might just not be that great of an idea. I can remember one water activity business we worked with at Kona Impact that was just boring. After 5 minutes doing the activity, I was bored. It was just a really bad idea and not something that people would spend their money or time on. They were in and out of the market in six months.
- Consider buying an established business. Look at the financials, talk to customers, clients and suppliers. Paying a premium for an established profitable business might be a good idea, as a lot of the risk will be gone.
- Location matters. Restaurants in alleys and off the beaten path pay much less rent, but suffer from very poor visibility. Parking, especially in the Alii Drive area, is troublesome, so much so that many locals avoid trying to shop in that area. The Old Industrial area is inexpensive, but it’s a ghost town at nights and on weekends. South Kona is lovely, but the population and wealth Is in North Kona. The Waikoloa resort area has high rent, a lot of visitors, but your business will be tied to the visitor industry and the ups and downs of seasonal fluctuations in visitors.
At Kona Impact, we know that business is hard on a good day and incredibly frustrating on a bad day. After nearly 3,000 projects in the Kona community with hundreds of companies, we have a good sense of what works and what doesn’t work. If you would like to put our experience and knowledge to work for your business, give us a call at 329-6077.