Category Archives: Business Essentials

Working with a Sign Shop: Know What You Are Buying

The other day my 10-year-old daughter asked me what a “bait and switch” is. I told her it is when you are led to believe you would receive one thing and at the end, you might receive something of lesser quality or value. It’s trickery, I told her.

At Kona Impact, we never want our customers to feel like they were going to get one thing and receive another. It’s bad for the client and the business. Over the past ten years, we have had very few times, perhaps two, when we’ve had to deal with the accusation of a bait and switch or just a customer asking for something we did not include in the sale.

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We make great efforts to be very forthright and transparent to avoid surprises—for our clients and us.

Here are a few things ask your sign company when purchases a product:

  1. Are design costs included? Sign shops will often separate design/setup costs from the cost of materials and the production costs. For an intricate sign design, the design costs will exceed the cost of materials and production. At Kona Impact, we usually include “basic design” in the sign cost for banners or simple signs, but if you want something that will take a lot of design time, that’s extra.
  2. Can I have the sign design file? If you pay separately for design, we will gladly give you a pdf or jpeg of what we have done. If you have not paid for design time, ask if you can buy the design afterward.
  3. What is the material? Is this material suitable for my intended use? Discuss this in depth before you order!
  4. How long will the sign last? This to a sign professional is like asking how long a marriage will last! There are many variables: use, location, material, orientation to the sun, environmental wear, and so on. Most signs are printed on vinyl should have a 5-10 year expected life (or more), but one facing South next to the ocean will likely have less, and one facing north at a higher elevation in the shade will likely have more.
  5. Will the sign be ready to mount? Yes, but if you want holes in the sign, you need to be very specific about the locations. The standard real estate sign is 24” x 18”, but mounting poles and brackets might be two to six inches in. If you want the holes drilled, most sign shops, including Kona Impact will drill them for you, but we need to know where.
  6. Is installation included? Installation might double the cost of a sign, so be sure to ask. I should not be assumed.
  7. Can I self-install? For most small signs, we highly recommend self-installing, because our time to drive to your location, install and then return are costs we need to recoup.
  8. Do I need a permit? We do not advise on County of Hawaii permitting. The sign and construction codes are on the County’s website; read and decide what you want to do.
  9. Does it include mounting hardware? We can certainly provide mounting hardware, but you can save a lot of money by going to the hardware store—the same one we would go to—to get you stainless screws, washers and brackets.
  10. Is there a warranty? Every sign shop, including Kona Impact, wants your signs to last a long time. That said, where and how a sign is mounted are huge factors in the life of a sign. As such, we give broad guidelines—based on our product manufacturers’ information—for the life of signs, but we do not warranty anything once it leaves our shop. That said, if material fails prematurely—and it does on occasion—we want to hear from our clients, as we will do our best to make it right.

Everyone likes to believe they are getting what they think they are paying for. In our experience, most issues come from a misunderstanding or lack of clarity at the initial stages of the project. At Kona Impact, we try to go through all the eleven points above at the quote price stage, as we know nobody likes surprises—us or our clients.

If you are looking for signage on Hawaii Island, give us a call. We are happy to help!

Kona Impact 74-5599 Luhia Street, E-7, Kailiua-Kona, Hawaii
808-329-6077

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A Few Things Every Entrepreneur Needs to Know

At Kona Impact, we love working with entrepreneurs! We love to see someone take an idea and make it a viable, sustainable business. We love to see people get rewarded for their innovation and hard work. It is, after all, what has built this country.

We have worked with hundreds of businesses and have completed thousands of projects over the years. We have worked with teenagers and retirees, PhDs and non-high school graduates, multi-millionaires and people scrimping to buy groceries. We like to think we have seen it all.

I was talking with a young entrepreneur the other day about business and doing business in Hawaii. He was inquisitive and seemed to be searching for ideas, so we spent some time going through the basics of business. Here are four ideas I shared with him about becoming a successful entrepreneur. Based on what we have seen in our ten years of business, they are important.

Get a Good Understanding of Business Law

I’m not saying you need to become a lawyer, nor do you need to hire one for a lot of your business decisions and day-to-day operations. You do need to understand what licenses you need for your business to operate, a proper business entity to register, your tax obligations, and you need to have an understanding of contract law.

I see a handful of businesses a year that seem to want to create their version of basic contract law. At a simple level, there is “offer” and “acceptance.” For example, if you come to Kona Impact and discuss a project and we offer a specific product, and you accept the offer verbally or in writing, you have entered into a contract. When that product is delivered or produced, you are responsible for paying for it. For certain, there are many nuances to this part of business law, but it’s important to have a fundamental understanding of the “offer-acceptance” nature of business. There is nothing that will turn off suppliers or partners more than a client or customer that is unreliable and is operating under flawed reasoning about legal responsibilities.

Here’s a pretty good primer on business law. It’s just a start; you need to learn more!

Don’t Get Caught Up in the Manini (the non-consequential)

A business owner will make hundreds of decisions a day, some of them of great consequence to the business and many decisions of less importance. Focus on the three things you think will drive sales, innovation or productivity and spend as little time as possible on the things that don’t add value to your business.

If you’re spending hours on a business card, you are wasting time. If you spend a substantial amount of time on social media checking out what your friend’s had for dinner last night, you’re wasting time. If you find yourself putting off sales and marketing tasks while working on polishing the silverware, so to speak, you need to stop and start doing the hard work of the business.

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Know What You Know and Be Willing to Admit What You Don’t Know

The most successful business owners I know in Hawaii are masters at doing what they do best and hiring good people to do other tasks. Seldom do I see an entrepreneur who does the sales and marketing, accounting, design, product delivery and customer service work at an “A” level for each. It’s just impossible to be good at all, so why waste time doing a thing for which you are inefficient? If numbers are your thing, hire a salesperson. If you’re a people person, and you would rather get a root canal than do the accounting and payroll every month, hire an accountant.

I see a lot of sole proprietor businesses where the owner is trying to do it all, and in the end, does nothing very well. Sadly, these micro-managers also tend to over-focus on the unimportant, robbing their business a true chance of success.

Be Over-Capitalized!

Starting or running a business is tough, and despite the best planning and intentions, a lot of businesses die due to running out of money. They might have survived over time, but the owners ran out of funds too early.Watch Full Movie Online Streaming Online and Download

At Kona Impact, we tell new entrepreneurs to have a year of operating capital when they begin. They should keep half their marketing budget for the second half of the year. We like to say, “you don’t know what you don’t know,” so have enough reserves to get through the unexpected.

In Conclusion

If you want to bias your business for failure, make bad legal and contract situations, focus on the inconsequential, try to be a “know-it-all” and start your business under-capitalized.

Want bias for success? Read up on business law, focus on the big issues, delegate, outsource and have reasonable financial expectations and resources.

Kona Impact | 808-329-6077

Thirty Business Ideas for Kona, Hawaii

Kona Impact has been helping new businesses for nearly ten years. We’ve seen some of the best ideas one could imagine, and, truth be told, some of the worst. Most businesses fall somewhere in the middle: a pretty good idea, but success depends entirely on hard work and effort acheter viagra 25mg.

Here is a list of 30 businesses that could, in my mind, do OK in Kona, Hawaii. Some are more commercially viable than others, and I am willing to admit that some are probably very bad ideas for one reason or the other. My intent is simply to get some ideas out there and perhaps inspire some great ideas for the readers. To my knowledge, they are not copies of anything that exists now.

  1. Energy consultant – unbiased consulting services for home and business energy use
  2. Low-cost airport shuttle for residents and visitors with remote lot parking
  3. Bakery
  4. Made on the Big Island store
  5. Reputable dog breeders
  6. Commercial co-packer for Big Island foodstuffs
  7. Dedicated performing arts center for hula
  8. Business incubator space
  9. Hawaiian language school for adults
  10. Viable alternative media for Hawaii news
  11. Nice made-in-Hawaii furniture store
  12. Triathlete training school
  13. Maker space
  14. Waterpark
  15. Dedicated vehicle painter
  16. Quality Hawaii-inspired clothes store
  17. Vocational training center
  18. Residential recycling service
  19. Children’s theater
  20. Addiction specialists (exist, but need more)
  21. Home-based nursing homes (exist, but need more)
  22. Big & Tall shop
  23. Saturday school for Japanese
  24. Comprehensive wellness center with nutritionists, trainers, physio-therapy, counselors
  25. Big-Island theme restaurant
  26. Vegetarian restaurant
  27. Quality antique shop
  28. Campground
  29. Kids’ recreation center
  30. After school college prep center

I’m sure there are hundreds more great ideas. Pick on. Go with it. And, when you’re ready to start building your business in Hawaii, give us a call!

Kona Impact | 808-329-6077

How NOT to Negotiate Price with a Sign Provider

We had a potential client come into our shop the other day. She is a local business owner who wanted to have graphics put on her delivery truck. At the end of the discussion we told her, in very polite terms, to go to another provider. We were just not a good fit for her project. We felt we were not a good fit for the way she wanted to do business with us. And, based on ten years of business, we knew that working with her would be difficult and stressful, and we should pass on the project.

Here’s what he did to set off our alarm bells for a difficult project:

  1. In the first minute of talking, he said, “Your competitor, XXXX, said he could do it for $XXXX dollars.”
  2. She then said, “Can you beat his price?”
  3. After that, “I need this done this week.”

Here’s where she went wrong. First, I suspect she was making up a price quote. Never lie. We can spot a lie a mile away. Second, I know the “competitor” and what equipment he has. If the price quote were true, it would not be a comparable quote, as the “competitor” does not have the proper equipment to do a professional job. Third, if you are fixated on price—usually a bad idea—you can’t expect quality and a quick turnaround, too.

Price, time, quality: pick two

At the end of the day, we have several variables that affect pricing. They are:

  1. Design time
  2. Materials
  3. Installation time
  4. Shop overhead (rent, utilities, insurance, bookkeeping, supplies, etc.)
  5. Employee cost
  6. Profit

We have a very good understanding how #1-5 factor into our goal, #6.

So, based on the above, here is what NOT to do:

  1. Don’t tell us what our price should be. We know our inputs into the price. You don’t. We’ll give you a fair price quote. You are free to look elsewhere if you don’t like it.
  2. Don’t make false comparisons. Sign shops are not selling commodity goods, so you need to understand material differences, design expertise, and the installer’s skill level to understand how the same project might have a different cost.
  3. Don’t compare us to online. If you buy online, you will have to do the design work, create an account, pay upfront, pay to ship and then wait two to four weeks for your sign. If the quality is poor, you get to start over. At Kona Impact, we’ll (in most cases) make a professional design for you and have your sign done in a day or two. There are no delivery charges, and there are no quality risks.
  4. Don’t do the old, “If you help us on the price on this project we’ll bring you a lot more work.” This labels you as a price-only buyer, and we know your loyalty will be fleeting, at best. If you won’t let us make money on the first project, why would we expect anything different in the future?
  5. Don’t show us price quotes from other sign shops. Let’s imagine you get a written $300 price quote from Company A and then you take that to Company B and Company C. First of all; you are wasting your time and the time of the people who make your price quotes. Second, you may only save $10-$20, yet you have wasted $50 of your time and $75 of the time of sign company’s. Get two quotes if you must. Pick one. Move on.

Here is what to do:

  1. Be upfront about your budget and what you want. Our prices do not change based on your budget. We’ve had multi-millionaire clients and small sole proprietor clients: they all get the same pricing! Just be direct about what you want, and we’ll give you a fair price quote.
  2. Be willing to accept a smaller sign or lesser quality materials if your budget does not allow for exactly what you had in mind.
  3. For many signs, like exterior signs on posts or buildings, self-installing can save you money. Offer to build a frame or supports yourself as a way to reduce sign costs.
  4. Focus on value instead of price. Most sign shops do high-quality work, and if you want something on the cheap, you are not allowing the shop to have the resources (money) to do quality work. At Kona Impact, we will avoid jobs that do not allow us the budget to do quality work.
  5. Always be polite. Pushiness or aggressive tactics seldom get you the best work at the best price. They are a big turn-off and counter-productive. We will treat you with politely and with respect, and we expect the same.
  6. Pay your invoices promptly. Every shop has a list of clients for whom they will not do more work. The reasons are usually non-payment of invoices and being a pain to deal with.

The best way to get what you want is to be open, direct and honest in your dealings with your sign shop. This, of course, is how you want people to deal with you and your business, so doing the same to your providers should be easy to do.

 Kona Impact | 808-329-6077

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Understanding Why Clients Don’t Pay…And What to Do About It!

One of the most onerous parts of running a business is trying to get paid. In a perfect world, a business completes an agreed project and receives payment immediately. That is, of course, how retail works: you pick a product off the shelf, proceed to the checkout area, make payment and leave. You know own what you paid for. For most non-consumer businesses, however, invoicing is the way it is.

Many of Kona Impact’s clients lament how much trouble they have to go through to get some customers to pay. After over 4,000 invoices, 800 or so clients and ten years in business, we’ve learned a few things. Here’s our take on getting paid.

Why clients don’t pay …and what to do about it

Bankruptcy / Legal Problems – These are the hardest, as the court has probably set out who can get paid and under what circumstances. You probably have little chance of being paid. The only leverage you have is if your client needs something you have—a service or product. There is no use in digging a deeper hole, so demand payment upfront, and try also to require payment on past due amounts. You have no responsibility to provide services or products to a business or individual for which payment is uncertain.

They say they are broke – This is seldom the case that a client has absolutely no money to pay for what you have provided. They do have resources, but paying you is not as compelling as keeping those resources. Here is where a three-prong approach often works. First, be the squeaky wheel and keep reminding them of their non-payment. Apply late fees (if you have made these clear at the time of initial invoicing). Another prong is to get something, anything from them on a regular schedule. A hundred dollars a week on a thousand dollar invoice will reinforce to the client the need to get paid. Finally, consider Small Claims Court. Kona Impact has filed a few times, and it’s amazing how quickly a client can find the money to pay. We always received 100% payment before the court date in both instances.

Slow accounting practices – We find this with several big businesses: the local guy submits the invoice, which goes to the regional office in Honolulu, which goes to the Mainland office, which goes to the accounting department, which, by practice, processes invoices on a Net 30 (or worse) basis. As a result, it might take 60+ days to get paid. At Kona Impact, we’ve found that local office most likely has a credit card for expenses, so try to get paid that way. Otherwise, you will wait and wait, and there is little you can do about it. Our record late payment this way was from Mainland hamburger restaurant that took six months to pay!

paid invoicestreaming movie Fifty Shades Darker 2017

Poor accounting practices – At Kona Impact, we send all initial invoices by email with tracking, so we are reasonably certain if the email has been opened or not. If after a week, we have not received payment, the invoice appears not to have been opened, and it’s a new client, we’ll double-check the email and send a paper copy of the invoice. If after two weeks—we are Net 15—we’ll send a Past Due Invoice and sometimes follow-up with a call. We accept that there are disorganized clients, and it is our job to help them stay on top of things! (Not really—all we want to do is get paid!)

“Dissatisfied” client –  I put this in quotes because it’s common for clients to invent dissatisfaction because their true reason for not paying is that they have poor cash flow or are broke. That said, every service and product provider will occasionally fall short of providing what was promised. The important point, as it relates to billing and getting paid, is that you need to open the lines of communication and seek resolution, as you won’t get paid when a client thinks they didn’t get what you want them to pay for. Yes, this is a perception game, and the truth might not be that important, as long as someone feels slighted. Make a call and try to figure out how to reach some compromise. If they dig in their heels, it might just be a bullying attempt prix de viagra en pharmacie. Don’t give in; just file against them in Small Claims if you are certain you have provided what you are asking them to pay for.

Poor Cash Flow – This is when a client’s finances are irregular, and there is not enough money in the bank to meet liabilities. The good news is that your client or customer will probably eventually pay, but the bad news is that it might be at some uncertain time in the future. If it’s an established and reliable client, patience (and a few reminders and maybe some late fees) are in order. If it’s a new client, you need to have ‘the talk.” For the most part, clients and customers will meet whatever boundaries you set, and if they can’t or won’t, you might want to reconsider keeping them as clients. I’ve always found that if you set Net 15 day terms, you get paid in about two weeks; if you set Net 30 terms, you get paid in about 30 days, and if you set Due on Receipt terms, payment can be immediate or up to 30 days.

The important issue in all of the above scenarios is to find out the reason for not getting paid. Your choices might range from patience—there is nothing you can do—to filing in Small Claims Court or Circuit Court, if it’s a large amount, to protect your rights. I always advise trying to work things out informally instead of working through the legal system, but at the end of the day, you deserve to get paid.

Some recommend trying to set up payment plans. At Kona Impact, we have mostly found these ineffective unless we have a credit card on file that we can charge on the set schedule. We find that clients who don’t pay what’s done when it’s done seldom have the responsibility and integrity to pay on installments.

The other important issue is to manage risks. New clients should pay more upfront and be subject to a “Cash on Delivery” system until they gain your trust. Clients that violate your trust and become difficult to collect payment from might be clients you want to drop.

At the end of the day, you have no obligation to serve any client, especially ones that subject your business to unnecessary risks. It’s perfectly OK to refuse service to someone that might not meet your terms and conditions.

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

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
808-329-6077

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.

kona-decaf-coffee-company

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
808-329-6077

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
808-329-6077

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.

tax-avoidance

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