Author Archives: brian

Is Hawaii the Land of Oz for Small and Medium-Sized Businesses?

“Toto, I’ve a feeling we’re not in Kansas anymore” Dorothy, girl lost in the Land of Oz

“The more things changes, the more they stay the same.” Alphonse Karr, French novelist

There is a constant pull, a tug of war, between the sides that argue Hawaii is a unique land, a place like no other, and Hawaii is a fundamentally like any other place to do business.

The truth is somewhere in between; that is, there are some unique aspects to business in Hawaii, and, for certain, most of the normal best practices found elsewhere tend to be apropos.

Here, are three “Land of Oz” business issues in Hawaii

  1. Hawaii receives an “F” for friendliness to small business. in a recent study by Thumbtack and the Kauffman Foundation. Much has been said about burdensome regulations, high taxes and employer obligations in Hawaii. Hawaii receives an “F” for its convoluted tax code and the onerous General Excise Tax. It is one of four states to receive an “F.” It is one of four states to receive an “F” for regulations. This is the reality of business in Hawaii.
  2. Personal networks often trump sound business decisions. These connections might come from shared ancestry–Asian, Hawaiian and Caucasian–or through shared educational connections– Kamehameha, Punahou and Iolani or through geographic ties (i.e., born here vs. “flew here”). These undercurrents are often unspoken, but they are very real and salient. You might not be able to break into certain parts of business or government just because of who you are.
  3. There are strong interest groups who often guide public discourse. Some Native Hawaiian groups are very effective at halting or greatly slowing down developments based on historical and cultural grounds. Environmentalist groups are very adept at using their voice and the court system to block developments, including the now-defunct inter-island ferry. Public unions for teachers and police have been very successful in ensuring a lack of change and strong union protections. No value judgments here, but a business owner needs to understand that there are many interest groups that can affect one’s ability to do business. Understanding these groups and working with them, when possible, can make a huge difference in the success or failure of an idea or project.

What is someone to do if they are thinking about starting a business in Hawaii?

The simple answer is to do a lot of research and know the lay of the land, so to speak. Talk to potential customers or clients, scope out your competitors. See what government permits are necessary and try to figure out what groups might be opposed to what you plan to do.

Make alliances with those who are likely to support you, including potential suppliers or others that might benefit from your business. Join groups of like-minded business leaders, including a Rotary club or your local Chamber of Commerce. Make connections through membership in a church, a sports club, a gym or a networking club.

Above all, set reasonable expectations and don’t be discouraged by things you can’t control. Thousands of thriving businesses exist in Hawaii; if you would like to be one of them, give us a call at Kona Impact 808-329-6077). We offer design and marketing solutions to small and medium-size businesses in Hawaii.

hawaii-receives-an-f

Happy Fourth of July!

We wish everyone a safe and enjoyable Fourth of July weekend.

As we enjoy the beach, the BBQs and the fireworks, let us not forget the struggles of those who came before us to make the United States what it is today.

By no means a perfect country, but by all means the best country in the world to live, work and have that ever so important concept of freedom to guide us day-to-day and into the future.

See ‘ya on Monday, July 7!

Happy Fourth of July

What Makes Your Business Special?

Most markets are brutally efficient. Start doing a bad job providing products or services to your customers and someone else will. Become arrogant and over price and a competitor will come in and eat your lunch. At Kona Impact we have worked with hundreds of businesses over the years, many of which have thrived because they keep innovating and meeting their customers’ needs. We’ve also seen many fail because they haven’t.

The way to not only survive, but to thrive, is to be the best at what you do. By best, I mean the best products, service, order fulfillment, prices or some combination of these. These are what Marcus Lemonis of “The Profit” fame call the “3Ps”: Product, Process and People. Excel at all of these and you probably have a good business.

At Kona Impact, we have identified five things that we feel set us apart from any local competitor, and perhaps more importantly, people buying online.

They are:

Local Service. This includes having an office for clients to meet with us and discuss their goals and projects. This means being able to visit our client’s businesses and have a deep understanding of what they do and what works for them. You can’t get this online.

Fast Turnaround Time. For many of our signs, we can do them the next day, and in many cases, same day. We try to keep ample inventory of all of our materials to ensure that our clients to not have to wait while we wait for supplies.

Highly-skilled staff. All of the Kona Impact staff have been doing what they do for tens of years. We are not learning how to do what we do; we are highly skilled at what we do and are not using our clients’ projects and money for on-the-job training. This makes our work top quality and, because we are very efficient, our clients’ costs are kept down.

Community Involvement. We are actively involved in making our community a better place. We volunteer. We donate materials and finished products. We organize events for non-profits. While growing Kona Impact is not the reason we are involved in our community, the outcome of the contacts we develop and the goodwill our efforts create is a stronger business.

Local Knowledge. As people who have lived and worked in Kona for tens of years, we have a good understanding of what works and doesn’t work here. We often share insight and connections with clients, many of whom have moved from the Mainland recently. We love connecting clients with people and businesses that will help them grow or solve a problem. When businesses go online for most of their needs, they miss these connections, and from our perspective, they make a lot of bad decisions and miss a lot of opportunities.

Kona Impact local business

Project Compassion to Benefit Habitat for Humanity

One of Kona Impact’s favorite non-profits is Habitat for Humanity West Hawaii. It’s an extremely well-run organization, and their impact on the community is immense.

I encourage anyone who has an interest in Habitat to check out the national website or the local website. Their list of accomplishment is vast and their management of resources is impressive.

As with most non-profits, they need to fund raise. Houses are not built for free, even though a lot of materials and most of the human power is donated, there are still costs.

One way you can support Habitat for Humanity West Hawaii is to eat at the Kona Denny’s this Sunday from 4pm to 9pm. During this time, 100% of tips to the special guest servers and 20% of all food and drink sales will go directly to help Habitat with their next build project. All you have to do is eat! How easy is that!

Hope to see you at Denny’s this Sunday night!

habitat-banner-dennys

 

 

Mistakes are Unavoidable: How to Avoid Them

I used to start each university class by writing, “make misstakes” on the board. The misspelling was intentional. I wanted to encourage my Japanese students to push themselves to the extent that they would make mistakes. I would tell them that making mistakes in writing shows you are expanding your skills, and, when identified by a fellow student or the professor, mistakes are a great way to learn.

Now that I run a business, I still expect mistakes, for making mistakes is how we learn about to innovate and offer new products to our customers.

Careless mistakes, however, are the bane of design and marketing companies. For example, sending a file to a printer with a typo or misspelling is like throwing money out the window.

Over the years, we have developed procedures and policies to avoid the (costly) mistakes. They include:

  • Requiring client approval, even if the last change was just adding a comma, before anything is printed
  • Requiring review of all products by at least two sets of eyes Kona Impact prior to finalizing
  • List of procedures for all equipment use
  • Regular meetings to discuss mistakes we have made and how we can prevent them
  • A culture of accepting mistakes as learning opportunities
  • Keeping equipment is proper working order
  • Replacing cutting blades frequently. This is a big way to reduce cutting mistakes

In the end, mistakes are often made when employees or clients are in a rush, unfocused or simply not attentive to their work. Find ways to help employees overcome these issues, and careless mistakes will decrease.

And, yes, the inspiration for today’s blog came from my lunch today:

no tomato please

No Tomato, Please!

Perceived Value Pricing or Cost Plus Pricing?

Pricing is always a challenge for businesses. In the ideal world (from a business perspective), prices are set high relative to costs and combines make a bunch of money. In the ideal world (from a buyer perspective) products and services would be priced slightly above cost, just enough to the keep the supplier in business and innovative, but not so much that the buyer’s capital was going to fund excessive seller’s profit.

These two perspectives roughly correspond to perceived value (charge as much as you can because your product has a high perceived value to the buyer) and “cost plus” pricing where products are priced at some level above costs, usually a small percentage above cost. At the extreme of this is commodity pricing, which basically says corn is corn and the buyer wants the lowest price.

One extreme of perceived value pricing was in the news recently.  Apple paid $3 billion to buy Beats by Dr. Dre headphones.  These high end headphones, which retail for up to $450 dollars, cost only about $14 to make, a markup of 3,200%! . This, of course, is a dream margin for any business.

How can Beats get away with 3,200% margins? They have a very high perceived value to the buyer. Aligned with youth culture, the iconic Dr. Dre and music, these headphones brand the wearer as a hip, youthful music lover. It doesn’t matter that the headphones have only receive mediocre reviews; they are cool and the thing to have.

We see these margins on everything from Air Jordan sneakers, Apple computers and nearly all perfumes. Perceived value can be very profitable.

Few businesses can make products that buyers are so caught up in perceived value that they have near limitless pricing power. Try to charge and arm and a leg for notebook paper and pencils and you’re destined to failure.

Here are a few local business types in Kona that have very strong pricing power due to perceived value:

  • Specialty Agriculture
  • Urgent Care providers
  • Tow Trucks
  • Bail Bondsmen
  • Pest Control Companies
  • Star Gazing Tours
  • Helicopter Tours
  • Wedding Providers
  • Medical Specialists

All of these have scarcity—we’re on a geographically isolated island—and a high emotional value to the problems they solve. The price of beauty, health, weddings, freedom and access to remote areas give these business a strong case to price according to perceived value instead of cost plus a small markup.

Businesses that can develop ways to create a niche of high perceived value products that are in demand, will have good pricing power. The closer you come to the commodity level, the lower your per unit profits, and the higher need you’ll have to sell a large volume.

At Kona Impact, we work with businesses in Kona, Hawaii every day and often talk about product pricing with them.

perceived value

Getting Found Locally: How Clients Find Coaches

How do your clients or customers find you? Do you ask?

One of the keys to successful local marketing, attracting and selling to people in your community, is gathering information about how people find you. One thing we do at Kona Impact is to ask every new client how they found us.

Was it a referral from an existing client? If so, I want to reach out to that client and say thanks.

Was it online? Did the new client click a paid ad or was it through organic search? The difference is important.

We keep this client acquisition data private, of course, because it becomes part and parcel of our marketing plans, budgets and strategic planning.

I can, however, share how coaches get their new clients. By coaches, I mean Life, Business and Wellness coaches, not soccer, baseball and swimming. This data comes from a marketing survey we did for FindCoaches.com an online coaching directory.

How do coaches find clients?

Of the following, what are the THREE most common ways your current clients have found you? (Check no more than three.)

Referral (from other client, friend, relative, etc.) 83.5%
Personal connection (you knew each prior to your coaching relationship) 67.1%
Your website 41.2%
Social media website (Facebook, Twitter, Linkedin, etc) 23.5%
Seminar, retreat or training session 23.5%
Online coaching directory 14.1%
Print advertisement (newspaper, phone book, magazine, etc.) 5.9%
Online ad (Google AdWords, Bing ads, etc.) 2.4%
Radio or television appearance 2.4%
Direct mail 1.2%
Radio or television advertising 0.0%

As you can see, referrals and personal connections are critical for coaches to grow their business. Social media, seminars and coaching directories also had a role in client acquisition.

Traditional media–radio, television, mail–were seldom used by coaches.

The results are clear: if you have a personal services business, you need to get out in the community and make connections with people. Don’t neglect your online presence either; a website, social media and online coaching directories might make the difference between a few clients and a lot of clients.

Should you avoid the traditional media like radio, television, mail and newspapers? These might be missed opportunities for coaches, or, as many might assert, they are not cost effective for coaches.

Clients often ask us where they should be found. Our answer is always the same: everywhere! This is especially true when it comes to professional services: you want anyone who is considering your services to come up with your name first. Simply relying on one medium or strategy is clearly not effective. That said, the survey results clearly show that some of the old media are likely to be ineffective.

The other thing that comes from the coaching survey is the need to ask clients or customers how they find you. Keep records. Use this information to fine tune your marketing.

survey your clients

 

Business Leaders in Hawaii: What Sets Them Apart?

Business Leaders: What Sets Them Apart?

We all have come across business owners who have an uncanny ability to inspire and lead. These are the business owners who seem to make effortlessly astute decisions and guide the business and its employees to success.

At Kona Impact, we have worked with around 400 businesses over the years, and most of the time, we are working with the owner or one of the top people in the company. We have seen a lot of great managers, people who make sure stuff is done and in an organized, orderly and cost efficient manner.

A much rarer breed, however, is a great leader, the person who sets an ambitious tone for the business and has the skills to ensure that the business not only stays on track but thrives.

It’s been said many times that a great leader will choose the destination, and a great manager will makes sure there are enough supplies and human power to get there.

Here are five characteristics of great leaders I have seen in Hawaii:

  1. Decisiveness. Leaders make decisions, and they make them quickly. This does not mean that they make decision without considering all the pertinent details—they do—but they make decisions without over-analyzing or dwelling on the inconsequential. We see this with many of our most successful clients: when we ask the leader of the business for a decision; we typically get an answer within seconds. Granted, ownership of a business enables one to make decisions without consulting others, but leaders tend to be men and women of action: get things done and move on.
  2. Loyal. Employees make mistakes. Suppliers make mistakes. Strong leaders accept this is true and use errors to grow and strengthen relationships. Most of Kona Impacts most loyal customers are some of the best business leaders, because they value consistency, reliability and trust. They know that they only get this from long-term customer-supplier relationships. They also know that we can count on their business in the future, so if something needs to be done and it’s on a weekend, we do it. Loyalty breads loyalty. Leaders know this.
  3. Future focused. Leaders tend to seek out innovation and game-changing products and services. We are constantly amazed at some of the ways our most successful clients innovate and offer products or services that meet a current need in the market, or in many cases, create a new market. Few leaders, from our experience, spend a lot of time looking in the past, and to some extent, focusing on competitors. They set the standards, and they know that by excessively focusing on competitors, they will always be behind or second best.
  4. People people. We have one client that makes everyone around him feel good about what they do and how they help the business. He communicates well, and with sincerity, from the dishwasher to the manager. One of our real estate clients, once said, “it’s easy to bring people down. I want to bring them up.” It’s a simple approach to relationships, but it is at the heart of being a leader.
  5. Focused on value, not cost. Our most successful clients, those who run business that everyone in town knows, are focused on what a person, product or service brings to the business in terms of adding value. This is quite different from cost. A new sign might cost $1000, but if it brings in ten times that in profit a month, it is a good value. The cost is irrelevant as long as there is sufficient value.

Academics have argued for decades if leadership can be taught. It’s really not the right question.

Leadership is not a binary thing: you have it or you don’t. We find that some leaders may be stellar with people, but be less decisive. Others might be high on loyalty, but more cost conscious. Leadership a singular trait of; instead, it is a basket of behaviors, attitudes and ways of working with people.

leadership concept

How to Make an Effective Sign: Purpose and Design

Signs basically have three main purposes: 1) give direction and location, 2) branding and 3) take an action. For example, a roadside sign for a taco truck might have an arrow, the logo of the business and “Tacos Two for the Price of One. Today only!” This accomplished all three purposes in one sign: direction, branding and a call to action.

So, the first principle of sign design is to know your purpose. A stop sign, for example, has one goal: get the driver to stop. There does not need to a logo of the city or state. Stop. That’s it.

A sign on the building of a new business might just have the logo of the business, as the goal is to give location and enhance the brand. A sign in a window might just say, “Inventory Reduction Sale.” Take action. Buy our stuff.

Keep the content to a minimum.

This is where most do-it-yourself sign designs fail. Less is more. The less you have, the more salient your main points can be. They can be bigger, bolder and not be encumbered by surrounding text or graphics.

Your sign is not your business card.

If the sign is a call to action; that is, “buy this now,” you don’t need your email, website and business address, assuming the viewer is already in your store. Make a clear purpose and avoid anything that does not contribute to that purpose.

Avoid unnecessary graphics.

The goal of a sign is not to win a graphic design contest. The goals are to give direction, branding and take action. There is no need to clutter your sign with unnecessary and distracting graphics.

Go with high contrast.

Gray letters on a brown sign are a guaranteed way for no one to be able to read your sign from afar. Red letters on yellow? Perfect. Black, red, white and yellow have excellent contrast with most colors if set in the proper content. Here are some failsafe combinations: black text on white or yellow; red text on white or yellow, yellow background with dark blue, red or black text, and white text on black or red or dark blue.

Size matters!

If you want people to read your sign from afar, your letters need to be big, the bigger the better. All things being equal, two inch, high contrast letters can be read from 30-50 feet; three inch letters from 50-75 feet. Print out a few letters at and attach them to the location of the sign and see how far you can move away until they are difficult to read. You can almost never go wrong with bigger, as opposed to smaller text. The same is true for directional arrow and company logos.

Kona Impact has made signs for business all around the Hawaiian Islands: Kauai to South Point, Hawaii Island. Most of our work is in the Kohala and Kona areas of Hawaii Island. If you have a sign idea in mind, give us a call at 808-329-6077.

Here, by the way, is how NOT to design a sign:

bad-sign-design