Author Archives: brian

One Year Past the Most Difficult in Time Kona Impact’s History – Happy Ending!

It’s hard to imagine but it’s been one year since we have been in our current location, 74-5599 Luhia Street. Kona Impact has been in business nearly ten years, and this was our second move.

We had no idea when we began 2015 that within a month we would be moving. We also didn’t know that we would have to go through some of the darkest days of being in business until we could turn things around.

In mid-January our poorly-maintained and horribly managed building suffered its third “brown water” leak into our office in two years. This one was horrible, putting us out of business for nearly half a month and destroying thousands of dollars of equipment and materials. We had dealt with the usual problems with office space in Kona: creepy crawly things and even some hairy creepy crawly things, but alas, that was part of renting an old building with an off-island owner and incompetent management.

We were told by several people, including a lawyer friend, that we’d have a good case to sue the building owner and the management company and win, but we decided it would be easier to move on. To this day, I am glad we just terminated our lease—as we had the right to do—and move on.

A few things we learned:

  1. The manager of your building works for the owner and not the tenants. They are there to protect the owner’s interests. Do not, for an instant, think they will put the tenants’ best interests before the owner’s.
  2. Your lease will probably release your building owner from any and all responsibilities, no matter how negligent the owner is in maintaining the property. If your building has consistent and serious problems—plumping, security or electrical—get out as soon as possible. Neglect is neglect and it won’t get better.
  3. Business disruption insurance will have so many loopholes and restrictions that it might not cover very much.
  4. Always be looking for a better deal. Had we realized that we could find double the space for the same rent, we would have moved much earlier. Sure, there is the fear that you will lose customers if you move, but always look for ways to find a better place.
  5. Don’t give into fear or bully tactics. As a business owner, it is your responsibility to run a profitable business and to follow the terms of your lease. Your building owner and property owners best interests are making you stay, even it means bending the truth. Ironically, a leasing agent will encourage you to move, as they only get paid when they lease a new location. Everyone has a vested interest! Follow yours!
  6. Don’t be afraid to move. It took us about four days to prep, paint and move to our new location. Given the huge and proven risk of staying where we were, this was not a hard choice. We’ve now had 365+ days of absolutely no building issues. I haven’t had to contact our property manager even once!

It’s been a year since we have been at our current location. We have seen significant year-on-year growth since we have moved. Our workflow is much smoother, and our extra space for inventory has meant that we can complete many projects in a day; whereas it would take two or three days before or longer.

Best of all, we are love renting a space where we can significantly lower our risks of business interruptions. The peace of mind is priceless!

Some people have asked if we are bitter about the whole experience with the property owner and the management company. The true answer is, of course, is a resounding yes! We make sure to share our experiences with business owners when they ask about good buildings, leasing agents and management companies. We always tell the truth, and in case of our old building and property managers, the truth is truly scarry.

So, as we celebrate the beginning of our second year on Luhia Street, we look forward to what the year will bring.

Success in 2016

Apples to Apples, Oranges to Oranges: Banner Pricing in Hawaii

Three things we have all grown to hate are hotel, air fare and car rental pricing. We have all found prices for these and then realized that they don’t include taxes, airport fees, cleaning fees, resort fees, convenience charges, broker commissions, and so and so on. These can add 50% or more to the rate you think you are going to pay.

Unfortunately, the sign business has a similar problem: using a low teaser rate for a product, but when all is said and done, that rate is not even close to the out-the-door rate you pay.

Here’s an example:

Banners $3 sq ft. (an ad for a Honolulu sign company)

Sounds great until you read the fine print. This price is for a low-quality material. Good quality material is extra. The rate does not include any layout or basic design. With few exceptions, almost all of Kona Impact’s clients do not have the software, skills or know-how to design a banner. So, unless you have these things, add an extra charge. The $3 sq ft charge does not include hemming. An unhemmed banner will curl up on the side and is inherently much weaker. So, add an extra charge for that. The $3 rate does not include grommets. So, unless you are one of the 1 in 1000 banner buyers that are going to staple a banner to a board or wall, you will have an extra charge for grommets.

Do you want the banner to be full color? If so, that’s extra!

Oh, and the $3 rate is for “standard processing” which means you will get your banner (low-quality material, your design, no hemming, no grommets) in a week. Want quick processing? That’s extra!

Kona Impact has made approximately 2,000 banners, and the number of times a client has wanted an unhemmed, un-grommeted banner on inferior materials with a print-ready file they have made is exactly zero! In other words, what the $3 sq ft pricing is advertising is something no one is buying!

At Kona Impact, we offer two prices for banner, which I am confident costs less than the out-the-door price of most companies:

$8 sq ft for a high-quality material banner with hem and grommets. This includes a basic layout with a turnaround time of a day. There are no extra charges for full color.

$6.50 sq ft for a high-quality banner with hem and grommets. The client provides the print-ready design. The turnaround time is a day. There are no extra charges for full color.

We also offer volume pricing and non-profit pricing discounts.

For example, one local company that advertising $27 banners has an out-the-door cost (6’ x 2’ banner with hem, grommets, “basic” layout, uncertain turnaround time) for $107! Kona Impact’s price is $96 with a one-day turnaround.

apples to apples comparison

It’s become a time when companies like to lure customers in with rates that seem to be reasonable. Hotels, car rental agencies, airlines, and, yes, sign companies do this. At Kona Impact, we are a full-service company that likes to treat our customers like we like to be treated when we are customers: fair, honest and transparent pricing. We do not give teaser rates and then engage in the “that’s extra” dialog with customers.

So, the next time you come across an extremely low price for a banner, ask the following questions:

  1. What is the material? Is this your best material?
  2. Does the price quote include any design time?
  3. Does the price quote include a full-color printing?
  4. Is there a setup charge?
  5. Does it include hemming or grommets?
  6. What is your turnaround time?
  7. Do you outsource your work to the Mainland?
  8. Are there any shop charges or additional costs?

At Kona Impact, we are very competitive when it comes to apples to apples and oranges to oranges comparisons. But be sure when you call for a price quote you are comparing the similar quality, costs and turnaround time!

Kona Impact

Kona Decaf Coffee Company: All the Flavor, without the Buzz

Kona Impact is a short drive to the world-famous Kona coffee growing area.  This area stretches from the North end of Kailua-Kona to about 20 or so miles South of town. In many areas, it is only a few miles wide. It is here that the stars align to make for the perfect growing conditions for coffee: a tropical climate, volcanic soil, leeward side of a mountain, morning sun/afternoon shade and good rainfall. There are about 300 Kona coffee farms. Most sell unprocessed coffee cherry to processors and many sell roasted Kona coffee direct to the public.

A few farms sell decaffeinated, but most do not. Those that do sell decaf Kona coffee often have their coffee processed off-island using the Swiss Water process. There are obvious problems with this process, which created an opportunity for a new way of decaffeinating coffee.

A new business and processing model for Kona decaf coffee has been pioneered by the Kona Decaf Coffee Company. They use a CO2 process, which offers a far superior taste, on-island processing and a process that is devoid of harsh chemicals.


There are three main ways to decaffeinate coffee: 1. The solvent process, 2. Swiss Water, and 3) CO2.

The solvent process sounds horrible because it is. Coffee beans are steamed to open the pores, and then a chemical solvent is used. The solvent bonds with the caffeine molecule’s, and then the beans are steamed again to remove the solvent. Taste, of course, is affected, and many people would probably choose to avoid this process because of the chemicals used. Unfortunately, most inexpensive decaf coffee is processed this way.

The Swiss Water process requires hot water to be passed through the bean, and then that water is charcoal filtered to remove the caffeine. The beans are then soaked again in the water to re-add the flavor. Kona coffee farmers who use this process send their beans off-island, and will not receive the same beans in return. Taste, according to many people, is affected by this process.

The CO2 process, which is used by Kona Decaf, is simple. Carbon Dioxide, a naturally occurring gas, binds with the caffeine molecule when it passes through the beans.  The caffeine is removed and the great taste of the coffee remains. The process is done in Hawaii, and few would argue, that it results in superior coffee and is more environmentally friendly than the solvent process.

I am personally very excited to see a new, innovative entrant to the Kona coffee market. For years people who have wanted Kona decaf coffee were stuck with two bad choices. Now the taste profile of Kona coffee—low acid, aromatic, flavorful—can be had without the caffeine buzz.

 Kona Impact
74-5599 Luhia St, E-7
Kailua-Kona, HI 96740

Kona Businesses and Barriers to Entry

Wouldn’t you like to own a business where there is no competition? Better yet, wouldn’t it be great not to have to worry about competitors coming into your market? There are, of course, very few businesses that have such high barriers.

barriers to entry

In Kona, Hawaii some of the big barriers to entry include the following:

  1. Exclusive distributorships. Many people don’t know that the major car dealerships in Hilo and Kona are owned by the same company. So, in effect, if you want to buy a new Toyota on the Big Island, you have to buy from the one dealer (with two locations) with the exclusive rights to the Big Island. It’s highly unlikely that Toyota would grant another distributorship on the island, so our local Toyota dealer is in a very enviable position: a monopoly.
  2. Government regulations and permitting. The old joke about slips at the harbor was that you needed to buy a “business” to get a slot. The business was an old, beaten up boat in a slip. The boat was worth nothing, but the slip was worth a lot. Another area with insurmountable barriers is Mauna Kea summit tours. There are no permits available, and the supply of tours is much smaller than the demand, so those with permits have a very protected and profitable market.
  3. Customer loyalty. Many B2B businesses that come to Kona Impact complain about the “old boys network” in Kona. They claim that they will offer better prices, products or service, yet the “old boys” don’t give them the time of day. I’m not so sure how much this is true, but loyalty to businesses you know and trust does create strong barriers to entry.
  4. Capital Costs and Market Needs. Some machinery-based businesses and transportation businesses require hundreds of thousands, if not millions of dollars, to get started. Given the small Kona market, it does not make sense to have two businesses doing the same thing. If you think of Kona Trans or a few of the big snorkel charter businesses, you can see how startup costs would be a formidable barrier to entry.

If we look at a business like Fair Wind, we can see that they have all four of the above barriers to entry (an exclusive spot at Keauhou Bay, Kealakekua Bay mooring permit, high customer loyalty and huge startup costs), which is probably why they are the envy of every water recreation business.

Here are few things we see as ineffective barriers to entry for Kona businesses:watch The Revenant 2015 film now

  1. Reliance on new technology. We’ve seen this with several upstart businesses: they buy into a new technology, thinking it will be so compelling that it will dominate the market. I’ve seen this with video production/filming, printing, cleaning machines and products and lot of franchise based businesses. The problem is that technology inevitably improves while costs  go down, so the presumed barrier is very short lived.
  2. Relying on saturating traditional advertising. I’ve seen businesses start in Kona that do big, full-page newspaper ads hoping that will kick start the business. Then, after spending several thousand dollars in a short time, they realize the foolishness of such a big print ad spend. That old saying about not putting all your eggs in one basket is very apropos when it comes to advertising.
  3. Using predatory pricing. This is another often ill-fated approach to building a business and establishing barriers to entry. Rushing to the bottom in pricing is a sure-fire way to make you busy and broke. Changing the perception that you are a low-cost provider (often associated with inferior goods and service) is a very hard perception to change. We often find that the low-price entry has often miscalculated costs of doing business in Kona, and, over time goes out of business because it is unable to achieve profitability.

When you are starting or buying a business in Kona, Hawaii, think carefully about what barriers to entry exist and how you can create more. Some business with very low initial barriers to entry includes massage therapy, real estate and landscaping. That does not mean that these are horrible career choices; it just means that you need to work hard to differentiate yourself from your competitors. You also need to keep innovating and marketing to find sustained success.

For a great list of barriers to entry, click here. Take a look and figure out how many you can buy into or create.

Kona Impact
75-4499 Luhia St, E-7
Kailua-Kona, HI 96740

Bad for Hawaii’s Businesses: Tax Inversions by Multinationals

I don’t find Washington politics that interesting, to be honest. I know I will have more effect on my standard of living by getting up every day and providing value for my clients and love to my family than complaining about what happens in Washington. I don’t feel getting all riled up about politics and politicians to be that productive.

Two things, however, get my goat. I don’t like waste, and I don’t like unfairness. I expect all my community to pay its fair share of taxes, as I do, and when the government has my money, it should not waste it.


It seems, however, that something has gone vastly wrong in our country. Today I heard of another merger of companies—Tyco International and Johnson Controls—which will become “headquartered” in Ireland to save the businesses about $150 million in U.S. corporate taxes. The Pfizer and Allergan merger is expected to “save” them billions of dollars a year by becoming “headquartered” in Dublin, Ireland. This is called tax inversion.

This charade has to stop. I suspect that none of the executives, head offices, R&D facilities, production facilities, marketing departments, etc. will be moved to Ireland. It’s simply moving the business registration abroad.

These companies will still benefit from all things taxes pay for in the United States: IP protection, a transparent legal system, military spending and national defense, research grants and subsidies, federal highways, ports, health care subsidies and all the state and local benefits like schools, police and roads.

Tax inversion lets some of the biggest companies in the world receive all the benefits of United States without sharing the tax burden of what supports these benefits. In other words, they are taking a lot and giving very little. In the long run, we can’t all be takers if there are not enough givers.

Sure, you can argue that the law allows them to do this, and any sane business executive would be foolish not to take advantage of ways to lower taxes and provide a better return on investment to shareholders. I get this.Watch Full Movie Online Streaming Online and Download

The laws need to be changed. I don’t know the how or what: much smarter people than I should figure this out.

As a small business owner, I pay a lot of taxes, but it would be impractical, very difficult and, indeed, unethical to shirk my tax responsibilities. It’s all about fairness.

In the end, when the large multinational corporations avoid taxes, someone has to make up for that revenue. It will fall, in part, on the small and medium-sized businesses in Hawaii.

If you, too, you find tax inversion to be something that is contrary to principles of fairness and good governance, let your representatives know:

Hawaii’s Elected Leaders

Senator Brian Shatz
300 Ala Moana Blvd., Rm 7-212
Honolulu, HI 96850

Senator Mazie Hirono
300 Ala Moana Blvd. Rm 3-196
Honolulu, HI 96850

Congresswoman Tulsi Gabbard
300 Ala Moana Blvd, 5-104
Honolulu, HI 96850

Congressman Mark Takai
300 Ala Moana Blvd, 4-104
Honolulu, HI 96850

Make a (Kona) Impact: Buy Local – Office and Art Supplies

Kona Impact has been in business nearly ten years. We recently took a deep look at the kind of businesses that have been the clients that have kept us in business; we found that almost all are locally owned. This is despite the fact that locally-owned businesses comprise only a small part of our local retail economy.

The big box stores: Walmart, Target, Costco, Home Depot, Kmart have huge amounts of revenue, yet very little of that profit stays on the island. With few exceptions, most of their products are shipped in, and all the profits are shipped out. Not to mention most of the well-paid management jobs (and decisions) are not here.

small business kona hawaii

For lack of a better way to say it, Kona Impact wants to be known as a “local evangelists.” That is, we want to sing the praises and shout from the mountain tops about the value of local businesses. To that end, we will try to draw attention to local gems of local entrepreneurship.

I’ll introduce two today. They are NOT our clients, but I am a customer of them.

Imagine if just ten percent of the art and office supplies purchased at Walmart or Office Depot were spent locally? My guess is that would add a job or two to our economy and keep a few hundred thousand dollars on island, money that would circulate again and again through our economy.

Akamai Art Supply & Kona Coast Office Supply – Big Box Alternatives

Akamai Art Supply, located above Home Depot, has just about every art supply you could imagine. I have bought glue, poster boards, notebooks and colored pencils here. I wish that I had some, well, any, artistic ability, as I think this would become a hangout spot for me. What I do buy, however, is always very reasonably priced, and the selection is exceptional.

Next time you’re thinking about buying art supplies, stop by Akamai. They probably have what you need, and the money you spent here will stay here. I would also add that by supporting small specialty shops, you are keeping them in business. So the next time you need a tube of lime green paint right away, they will be there for you.

Kona Coast Office Supply

This is another store that we want in the community. Where else can you buy one sheet of Baronial Ivory paper? If you want a whole ream, they have that, too. My point is that by buying your boxes of paper, pens and desks here, you are supporting a place that also has the obscure and hard-to-find items.

When Office Depot opened a few years ago, I, too, went it wide-eyed and excited about all the “possibilities.” What I found, however, was low-quality furniture (that I had to assemble myself) and prices that were comparable to Kona Coast Office Supply. So, in the end, spending my money locally made a whole bunch more sense.

For certain, you will, at times, see me in Walmart. I don’t know of any locally owned businesses convenient to my home or work that sells motor oil, dental floss or Band-Aids. I do know of local businesses that sell paper, pens, drawing pads and adhesives. For them, I will choose to buy local.

I’m Proud of this One-Star Review!

I’ve been online long enough to remember the famous 1993 cartoon, where one dog is “talking” to another dog. He says, “On the Internet, nobody knows you’re a dog.” It’s an internet classic .  The joke is that the anyone can post anything online.

Well, 26 years later and we still (and always will) have people who take to their keyboard and write without thinking. Fortunately complete privacy is no longer (and probably never was) possible.

Last weekend, we received a one-start Google + review from Anela Bonafede. Her review is attached to her name, so I did not have to do any detective work.  I have never met her, nor have we provided business services to company any for which Anela works.

Her review was, “Refusing business because of possible competition with kayak businesses.” (one star)

anela bonafede review of kona impact

I quickly connected this review to a call I had last week. A guy called and said that we were highly recommended by another business. He said he was in the kayak rental/tour business in Kealakekua Bay. I stopped him right away and told him that I probably couldn’t help him because I was already working with a tour company at the Bay. I had a handshake agreement that I wouldn’t work with competitors of my client for marketing work, but I would for signage.

My client has become very successful, partly because of the work we have done for him. He also runs a great business. Given that there are only a few businesses working (legally) in that area, growth can only come from taking customers from another business. That is, the pie is only so big and to get a bigger piece of it would require someone else getting a smaller piece.

Helping a competitor would mean taking business away from an existing client.

We are unwilling to do that. We agreed—for good reason—not to do that. End of story.

So, our one-star review from Anela Bonafede (who I don’t know) is because Kona Impact will not engage in unethical behavior. I am very proud of this one-star review.

I ask Ms Bonafede the following:

  1. If Kona Impact was willing to cheat an existing client to help you, don’t you think we’d do the same to you eventually? Why would you want to work with a business that didn’t keep its promises?
  2. Do you run the kind of business that doesn’t honor agreements? If so, why would Kona Impact want to work with you?

Kona Impact
74-5599 Luhia St, E-7
Kailua-Kona, Hawaii

Free “Buy Local” T-shirts at Kona Impact

We did a lot of thinking last year about how we can help our community become a place where entrepreneurism thrives and locally-owned and operated businesses start, grow and prosper.

We all know the numbers: very little of the money spent at big box retailers cycles through our community. We know, for example, that a big part of every dollar spent at a locally owned business stays here and helps create a stable and vibrant community.

Late last year we ordered 100 t-shirts (from a local business: CG Tees) and are now giving them away to anyone who stops buy. I was delighted when two of our clients who sell organic lettuce (Aina Tribe) said the shirts will become their “uniform” when they are selling at the local farmers markets.

Our offer is simple: stop by and get a free shirt. First come, first served.

This is the beginning of our “buy local year” at Kona Impact. To celebrate ten years as a locally owned and operated business, we want to give back a little, to give a hand up to those small and medium-sized businesses that have helped us succeed. More to come…. Stay tuned!

buy local kona

Business Lessons from David Bowie

A life well lived, a game well played: David Bowie (1947-2016, RIP)

It’s hard not to imagine anyone from my generation, the one before it, and perhaps current generations, who has not been inspired and touched by a David Bowie song. For me, it was “Changes,” which I played incessantly as an early teen. It spoke to me.

david bowie business

Now, some thirty years later, I look at Bowie a bit differently: a trendsetter who figured out how to stay relevant and wealthy throughout his fifty or so year career. He knew the business of art, and, yes, he played the game well, very well.

There are few recording artists who continue to grow throughout their career. There was Bowie the “space oddity,” “glam rocker,” “the Thin White Duke,” “the New Waver,” “the pop star,” and “the experimental/electronic”—all this over fifty years. Few can match that level of change. Michael Jackson had his childhood period and an adult career that (in my mind) didn’t evolve much. When you go to a Rolling Stones concert, admit it, all you want to hear is “Satisfaction.” Mariah Carey and Britney Spears are essential the same as they were ten years ago. The only musical performer that reaches the level of Bowie’s level of change is Madonna.

At Kona Impact, we have gone through a gentle metamorphosis over the years. Of the six initial pillars of our business, we no longer have three of them. They have been replaced by five new areas of business. In 2016, we hope to add two more pillars to our business. Change to us is not scary in the least bit; it is essential for our growth.

When we think of change, we think mostly of expanding and contracting things we do. It’s not an upheaval of our business model on a whim; in fact, every change comes from information we receive from customers. It’s not what we want to do; it’s what our customers tell us (in various ways) what they want us to do. Business to us is not self-indulgent; it’s customer-centric evolution.

Another thing Bowie did was to realize that his business, the music business is a business. In 1990, he gave up the royalties on his music catalog for ten years, creating “Bowie Bonds.” In return, he received a cool $55 million. I can’t help but think of Picassos going for hundreds of millions of dollars these days, more than Pablo could have imagined earning in many lifetimes. He led a good life, for certain, but most of the value of his work has been realized after his death.

My point is that innovation, protecting assets and knowing when to capitalize assets is part of what every business should do, whether it’s a construction company finding innovative ways to lease and maintain heavy equipment or a small mom and pop shop clearing out the storage locker and converting inventory to cash.

Like any small business, we seek ways to improve our financial position. We would love to see more clients pay with checks, as they save us 3% credit card processing fees. Ideas how to make this happen, including not accepting credit cards for large purchases, come up now and then, but this type of change is perhaps too bold. My point is that small businesses (and medium and large for that matter) need to focus on money; how to make more and spend less. Bowie, at least, figured out how to make more by securitizing his music catalog.

Bowie, the artist, will be missed, but we can always revisit the feelings of love, angst, introspection and joy by listening to his music. Bowie, the businessman, is someone we can study and emulate. How can our businesses stay relevant for years? How can we change? How should we change? What can we do to keep more of what we earn?

 Kona Impact | 329-6077 | 74-5599 Luhia Street, E-7, Kailua-Kona, HI 96740

The futility of repeating previous entrepreneurship habits – Is it time to try something new?

I was thinking the other day about what conversations I have that are the most frustrating. These are the conversations I have several times a year, and they all have the same script.

The entrepreneur…

  • Realizes she is struggling with her business.
  • Knows the business is important to her livelihood
  • Has used several off-island, low-cost providers
  • Has tried a lot of the do-it-yourself design, printing, signage and website services
  • Has a brand that is a mess, a hodge-podge of discordant messages
  • Has a website, often built on a “website tonight” template that looks horrible and does function correctly

She then comes to Kona Impact, and one of the first questions begins with, “How much is…?”

She (or he—I’m not referring to any one client I have had) has spent all her time, energy looking at the price of services, and, as a result, her business is a mess. She has sunk a good deal of money into trying to string together a mix-match of service providers and products, with the main concern being,

How cheaply can I get this done?

If this strategy was working, she would, of course, not be at Kona Impact. But the “race-to-the-lowest-price approach” to business seldom works.

If I can convince these entrepreneurs to understand that with all the focus on price, she will find little value, we can begin a meaningful conversation how Kona Impact provides immense value, but, for certain, not the lowest prices.

If she is unable to see value in what we do, the conversation will be reasonably short because we are not a low-cost provider. We have learned in ten years of business that no client wants ineffective or poor products though that is all a low price would allow us to provide.

Clients want effective solutions to their business needs, and to provide those, we need to charge a price that allows us to provide quality products and services.

Simply put, price correlates very highly to value; it’s impossible to offer exceptional products and services at low prices.

That is why, for example, contractors don’t buy their tools at Wal-Mart, and you don’t go to McDonald’s for a nice meal.

We encourage all entrepreneurs to look realistically at how and what they are doing. If you haven’t achieved the success to which you aspire, maybe it’s time to make fundamental in how you’re doing business.

 Kona Impact
75-5577 Luhia Street, E-7
Kailua-Kona, HI 96740

learn from mistakes, move on