Category Archives: Friday Commentary

Why So Many Vacant Commercial Rentals in Kona, Hawaii?

I went to lunch the other day to a small hamburger restaurant a bit off of Alii Drive. The restaurant, Island Ono Grill, is one of my favorites, but I could not help but feel a bit of amazement that there area near the restaurant was a bit like a ghost town. The restaurant’s neighboring spaces were both empty, as was the retail space across from it. The whole complex seemed to be about 40% vacant. The amazing thing is that much of that space has been vacant for years.

The lost opportunity for established businesses is evident; there are few businesses to bring shoppers around.

vacant commercial

Why are there so many long-term vacancies in good and not-so-good commercial spaces? It would seem to make sense that building owners would get their rent to a level that the market would bear. In other words, price the office space to be rented. Makes sense, or does it?

There are a few assumptions of a price-it-at-market demand model:

  1. There is sufficient demand for office/commercial/industrial space to fill demand if the price is right. In other words, at a price, there would be a renter. Perhaps Kona has over-built commercial real estate.
  2. Lowing rental costs to attract new renters would not require lowering rent for existing clients. This can be a challenge. Tenants talk, and nobody wants to be paying more than their neighbor.
  3. Building owners do not somehow benefit from vacancies.  Is there a tax incentive for NOT renting property? I’ve never heard of it, but that might be a reason for the abundance of vacancies.

That said, it does seem a lot of commercial space in Kailua-Kona is woefully underutilized.

I am certain that building owners in Kona could approach vacant space much more creatively. For example, a lot of vacant space on the Mainland is (at least temporarily) occupied by so-called “pop-up” stores. Building owners could also provide low-cost temporary office space with basic amenities like cubicles, desks, and basic Wi-Fi. Small, emergent businesses could rent a space for a reasonable amount. Another possibility would be creating incubator or maker spaces.

I suspect that a lot of property owners, perhaps acting on bad advice from consultants and property managers, might be waiting for a time when Kona enters a boom phase, and they will magically find high-paying renters for all their vacant space. I’ve seen several boom and bust cycles and Kona, and I highly doubt what they are waiting for will arrive. If I owned commercial property in Kona with a vacancy, I would certainly be more creative than what I see now in the marketplace.

Kona Impact is thankful for

Kona Impact is thankful for

…having great employees who do their best to provide awesome products and services to our customers.

…the several hundred businesses that chose to do business with us in 2015.

…our suppliers who have helped us go from two or three-day turnaround to same and next day turnaround this year.

…those clients and non-clients who run exceptional businesses, and by doing so, have shown others how businesses can and should be run.

…those who show how businesses should not be run!

…those who the Kona community who are volunteers, teachers and mentors.

…living in a country, despite its faults, that provides more opportunities and freedom than any other country.

2015 IRONMAN World Championships: Kona Business Owner’s Perspective

We hear the same old tired complaining every year about the IRONMAN in Kona. Here are the complaints I hear every year:

  1. “The athletes don’t spend any money here.”
  2. “Many businesses have to close on IRONMAN day.”
  3. “IRONMAN is a huge business, and it takes advantage of the goodness of the people of Kona.”
  4. “The athletes are rude, arrogant and a safety hazard.”

“The IRONMAN athletes don’t spend any money here”
This is the biggest and most easily refuted claim of the naysayers. There are a few thousand athletes and probably a few thousand of their family, friends and supporters in Kona for one to two weeks. Where are they staying? Condos, hotels, B&Bs. What are they eating? Food and beverages from restaurants and locally-owned grocery stores like KTA and Sack ‘N Save. What are they driving? Cars rented from the airport. Now go deeper. Every cleaner, waiter, shop attendant and car lot worker had two (or more) solid weeks of work.

Kona Impact was busy for two weeks making signs and installing graphics for IRONMAN sponsors. Every restaurant owner I have talked to (some of the most well-known restaurants in town) said that IRONMAN is a huge boost for business. Even businesses like the music shop that rents audio gear for the event and the tour companies that see a big IRONMAN boost benefit.

So, the idea that IRONMAN has only a small impact on our economy is complete and utter baloney. It makes no sense and is just plain out false. If the average participant and family member just spent $2000 (which is highly conservative), you’re looking at many millions of dollars a year in direct spending.

“Many businesses have to close on IRONMAN day.”
This is true. Yes, Kona Impact was closed. The locally-owned office supply store we use in the Old Industrial was closed, and several other places were inaccessible as well. The real question concerns impact. If I couldn’t buy a ream of paper at my preferred office supply store on a Saturday (traditionally their slowest day), did they lose a sale? No, I would just wait until Monday or plan ahead and buy on the Friday. This office supply store, by the way, saw several hundred dollars of business from Kona Impact in the weeks leading up to IRONMAN as we completed projects for sponsors—a definite plus.

Sure, if you wanted to go to Target on Ironman day, it was difficult. My response: get over it. IRONMAN is one day, and you’ll do just fine without shopping at Target one day of the year.

“IRONMAN is a huge business and it takes advantage of the goodness of the people of Kona.”
Yes, IRONMAN is a HUGE business, worth several hundred millions of dollars. And, yes, the people of Kona are good people. Are they being taken advantage of? Most certainly not. Thousands of people from Kona volunteer, cheer on the athletes and take part in IRONMAN in different ways. Nobody is forced to volunteer; they do so because they want to help out and be part of the event. We do so because we like it.

Everyone in the Kona community benefits from the additional taxes paid on food, lodging and purchases. Most benefit from the exposure Kona gets from the IRONMAN, which helps attract tourists and helps our economy year-round.

I’d also add the IRONMAN Foundation has been responsible for many tens of thousands (perhaps hundreds?) of dollars to the Kona community. I have worked on park build projects that have been partially funded by the Foundation and I know they helped fund a van for PATH and have made several other community contributions a year.

“The athletes are rude, arrogant and a safety hazard.”
Agreed! So are some of the residents of Kona! And so are some of the tourists that come here! I can drive a bit slower or more cautiously around the time of IRONMAN and still be happy. I also do the same around the holidays and in February when the snowbirds come. When I see an elderly person driving slowly or erratically, I give him extra space. I can certainly do the same for the few weeks when the athletes are training and racing here.

My feelings as a business owner and a resident are the same: IRONMAN is great for Kona’s image and economy. I am certainly willing to accept that I may be inconvenienced for a day or two if it means my neighbor can buy a few extra bags of groceries, and if my fellow business owners can make some extra money.

To all of those who complain year-after-year, stay home. Go to Hilo for the weekend. Read a good book. Work in your garden. Let your friends, neighbors and community enjoy the fun, volunteer and run their businesses.

Kona Impact | 329-6077

What to Do When Your Competitor Plays Dirty

Most of Kona Impact’s clients have a love-hate relationship with social media and review websites. When they get a lot of positive reviews, they are, of course, happy. When a customer or client writes a bad review, they are not happy. When a competitor plays dirty, they are furious.

How do competitors play dirty online?

  1. Writing fake negative reviews about your business.
  2. Writing fake positive reviews about their business
  3. Engaging “black hat” marketing firms to spread incorrect information online.

How many online reviews are fake?

There is a lot of evidence that 15-20% percent on Yelp! and TripAdvisor reviews are fake. That is a huge number, because most business do not write or pay for fake reviews. That means, there is a relatively small number of businesses that are responsible for a huge amount of dishonest content.

What can an honest business do?

The first thing is never to write fake reviews or pay a company to write fake reviews for you or a competitor. It’s dishonest, and it violates the Terms of Service of every review site. You might get away with it for a short of long time, but trickery and dishonesty are no way to build a reputable business. Most of the review sites are very good at detecting large-scale fraud, so if you go from zero reviews to ten five-star reviews, written on the same computer, in a few days, it will be detected.

The review sites have one fatal flaw: they have no way to connect the review/reviewer to business.

That is, anyone can write a review about any business, whether he or she was a customer or not. Until that happens, all online review should not be imagined to be from actual customers. We saw this with the Minnesota dentist who killed the lion in Africa. His business got thousands of negative reviews on Yelp! by enraged people, and almost none of these was from his patients.

How can you deal with fake reviews about your business?

Unfortunately, Yelp! and TripAdvisor will seldom remove reviews, even if you claim the review is not from a customer or client. In practice, it seems to be an exercise in futility to contact the websites. You will also find it to be a long, expensive uphill struggle to bring legal action against the site. Don’t waste your time.

You could hire a lawyer and try to identify the person posting the review. This, again, seems like a waste of time and money; that is, by following the steps below you should be able to mitigate the damage of a fake review.Watch Sugarbabies (2015) Full Movie Online Streaming Online and Download

The first step should be to reply to the review. Here is a fake review posted by Manon Holroyd, who works for our competitor. We have never met her. She posted it on our Google+ profile.

fake review from Manon Holroyd

Fake review from Manon Holroyd

If you are certain the person has never been your client, say so. Most readers of reviews understand that fake reviews are common. Keep it factual and short.

The next step is to work on diluting the value of the negative review by asking customers to write reviews. You might want to have a sign at the counter or on the door, or you might print out some cards with your profiles on the review sites. Note: it’s against the Terms of Service of all the review sites to offer any incentives like money or free merchandise. Another strategy is to send an email thank you to clients and request reviews.

If you have one fake, planted review, ten positive ones will make that one look like an aberration.

Unfortunately, there is little you can do about competitors that fake reviews for their website. I know of one vacation service provider in Kona that has tens of excellent reviews, yet all the “reviewers” only seem to have written one review—for that company. Clearly this is someone trying to game the system. Volume is not the issue–we have one client with 170+ genuine five star reviews–it’s reviews that seem overly vague and laudatory coming from “reviewers” who have not written many reviews.

My advice is to focus on your business. Eventually the scammers and unprofessional businesses all get their just desserts.

 Kona Impact | 329-6077

My Three Favorite Productivity Tools

There are a few things that I use every day to ensure that I stay connected, remember ideas and allow me to stay productive online. I thought I’d share them, as they are all great ways to improve your business productivity.

idea concept

My favorite recent discovery is Dashlane. If you’re like me, you have tens of passwords to websites that you want to remember. The absolute worst thing to do is to use the same password on every website; all is takes is one piece of information to wreak havoc on your life. Another bad strategy is Post-it Notes on your monitor!watch Split 2017 film online now

Dashlane is a password manager that can help you make strong, random passwords when you create new ones, change a whole bunch of passwords to common sites effortlessly, and best of all, it will automatically fill in your passwords when you get to a website where you have an account. It will then sync these passwords to your Dashlane phone app, notebook computers, tablets, and desktops. I have it on my phone, two tablets, a notebook, and two desktop computers, and it has kept all my passwords up to date and easily accessible.

Another one of my favorite tools of late is a small, pocket size notebook. I like the Field Notes and Moleskin brands. They are small and easy to fit in a pocket. I write everything from business ideas to notes what to pick up at the store. When you got a lot going on, it’s great to have some notes to remind you.

My third favorite tool is my new Samsung S6 phone. I used to have a Samsung Note, and that was like carrying a brick around. The new S6 has an awesome screen and keeps me in contact by phone, text or email anywhere I may be. My family is iPhone users, but I just don’t like the small screen and small space on the “keyboard”.  One of my favorite features is the wireless charging: I just set the phone on a charging pad, and it charges, which is way more convenient than plugging it in. My favorite apps are Dashlane, Quickbooks and Audible (audio books).

These three tools—a password manager, a small notebook and a new phone have been great ways to keep connected and get what I have to get done every day. Dashlane is $40/year, the notebooks are a few dollars and the new phone, well, that’s a bit more!

Kona Impact | 329-6077

Easy-to-Do Marketing Options in Kona, Hawaii

I’ve had some good chats with clients this week about their marketing efforts. Some were sharing successes, and some were looking for ways to reinvigorate their businesses and sales. The one thing that was clear is that good marketing takes creativity and sustained effort.

marketing concept

Here is a list of opportunities that you might help your business:

Use what you have

  1. Email marketing has a huge return on investment. If you have a few hundred contacts, sending out an announcement, coupon, some pithy advice, etc., will generate instant business.
  2. This is also true with mailings. Sending out a postcard, letter or newsletter to your existing base of clients and contacts will generate repeat business.
  3. Call ten existing clients a week. Ask them how you are or aren’t meeting their needs. Introduce new products/services.

Being Seen More

  1. Use your vehicles to promote your business. Vehicle magnets are inexpensive, removable and can be made in a day or two. If you have a work truck or van, go with cut vinyl, see-through window materials or partial wraps. Bumper stickers are another idea.
  2. Put a business card holder on your vehicle. Card Caddie has inexpensive business card holders that affix to your vehicle.
  3. Get embroidered or screen printed shirts for you and your staff. I have embroidered ones for the office and screen printed ones for the weekend.  I am always marketing!
  4. Use your office or storefront windows to tell your message. I wonder how many customers the dental offices across from Safeway have gotten because of the see-through window treatments seen by everyone exiting Safeway. I see a lot more branding and window displays (many of which we made) in town. They certainly catch my eye.
  5. Go with some eye-catching vertical flags or banners for special events or promotions. The key to outdoor advertising is attention—what is new in the environment—so keep it dynamic and always changing.

Networking

  1. I say this a lot: get involved with a volunteer, religious, sports, environmental or political group in the community. We are more likely to buy from those we know and trust.
  2. The Kona-Kohala Chamber of Commerce and some the networking groups like BNI are a good source of events and meetings to make some connections.
  3. Avoid spending all your time online on social media: you are likely preaching to the choir instead of prospecting new clients. Get out and interact with people in person.

Advertising

  1. If you are a business focusing on other businesses, it’s easy to send out a targeted piece of direct mail.
  2. Depending on your product, it might make sense to send out direct mail to a neighborhood or to a targeted mailing list. It takes a bit of work, but the results can be spectacular.
  3. Look very carefully at traditional advertising: TV, yellow pages, radio, newspapers and cut any that don’t have a very high return on investment. Habit is a poor reason to do something that is not working. Reallocate funds to online marketing. The costs are lower, and you’ll reach a lot of potential customers.
  4. Consider sponsoring an Aloha Theater production, one of the local community events, a sports team or a sporting event.

Walking the Walk

  1. This is one of my pet peeves. If you are a local business and you expect people or other businesses to buy from you, you must do the same: buy locally. I am a potential customer of every business that does business with Kona Impact. In fact, I will go for long periods of time where I only buy from our clients’ restaurants, shops, farms and gas stations. I know the same is true with many business owners I know: they only support those who support them.

My goal is to get your creativity flowing. One thing I love to do is to spend some time each week looking at how other businesses are doing their marketing. What has caught my eye? What was compelling? What seemed off-message or a waste of time? There is not a lot that hasn’t been done; a clever marketer is a master observer and “repurposer”!

Kona Impact | 329-6077

Is it time to kill the phone book / yellow pages?

If you’re like me, you hate waste. I hate wasting food, time, money and natural resources.

To me, the yellow pages is a huge waste of natural resources, and for those who advertise in it, I believe it’s a waste of marketing dollars.Watch Full Movie Online Streaming Online and Download

phone book on vacant lot

It’s time to kill the phone book.

On Hawaii Island, there are approximately 10,000 households and business addresses. If we count one phone book per home and two per business, we’re looking at least 12,000 phone books distributed, the vast majority of them unused. At 335 pages, we’re looking at over 4,000,000 pages of junk dropped off at our doorsteps, left at the bottom of our driveways and placed in our businesses a year every year.

Here are my main reasons why it’s time to stop unsolicited phone book delivery:

  1. Nobody uses them! A highly informal and unscientific poll of Kona Impact clients and employees shows that exactly 0% of respondents have used the yellow pages in the past year. I think the last time I used one was about five years ago.
  2. Ineffective use of marketing dollars. As a small business owner, I want to get the best return on my marketing dollars. Kona Impact advertised in the yellow pages one year and spent several thousand dollars. I can honestly say that I could attribute zero calls to the ads. If I spent the equivalent on online marketing, I would expect (and most certainly get) at least five hundred inquiries and probably a few hundred new clients over a year. I often talk with clients about marketing options, and without exception, all who have advertised in the phone directories have a similar experience: spending several thousand dollars and getting virtually no tangible results.
  3. Environmental waste. There are three directories for our island, and each directory puts at least one or two books at the bottom of my driveway and gives my business two books. Doing the math, we can estimate that 12,000,000 or so pages of printed material is shipped to our island, with the majority of it ending our limited landfills. I have seen hundreds of phone books dumped by mailboxes at condo complexes and left there for months. I can only believe that these eventually end up in our landfills. Here is a picture of my neighborhood that shows four phone books that sat next to the homeowners’ mailboxes for three days! They didn’t even bother to take them in with the mail!
  4. phonebook-anyoneTechnology will continue to make them less and less relevant. When I need a phone number, I usually just talk into my phone and say, “phone number for Bianelli’s” Google search, by voice or by keyboard, almost never fails when I need to find a business’s phone number quickly. This will only continue. The phone book is a dying industry with no hope for survival.

I started this blog by saying how much I hate to waste anything. This is certainly true. I also work in marketing, so I want to offer the most cost-effective solutions to my clients as possible. Believe me, if phone book advertising worked, I’d recommend it with vigor. Given, however, that it doesn’t work, it’s a waste of environmental resources, and they are unused, it’s time to recognize this anachronistic publication and give it a good burial. Thanks, so long, goodbye!

Kona Impact | 329-6077

Think About it Friday: How to Kill Dreams

Taking an idea to a sustainable business is the goal of every business owner. It all starts with an idea, a dream if you will. How can I deliver a superior product to the marketplace? How can I offer a service that will solve a problem? How can I take a successful mainland concept and make it work in Hawaii?

These are all the things we dream about every day.

Few of these ideas, however, become reality.

This is probably a good thing.

When I was in high school I wanted to own a coffee shop with a used record store (yes, I’m that old!) and a used book store. Those were the things I loved: coffee, pastries, music and books. This was in the 1980s and I lived in a university town, so I thought this would be a can’t miss business. Well, not much later Amazon was beginning its dominance of the book business; Starbucks was settings up chain coffee stores with vigor, and Apple was setting the foundation for legal digital music distribution. My dream would have been crushed and I’m certain my business would have failed. Fortunately, I didn’t follow that dream and I now live in Kona, Hawaii with some of the world’s best coffee; I get a pastry now and then from a local bakery; I listen to streaming music online; and, most of the books I read are on a tablet computer. And, best of all, I’m not a failed coffee/book/music store owner!

Here is a great TED talk on ways to kill your dreams:

 

Think About it Friday: Do leaders or followers create movements?

This is one of my favorite TED talks. In only a handful of minutes, the speakers shows how some movements begin.

1. Are movements leader-driven? Well, at first someone needs to come up with an idea, but it is only a good idea when the second person (and 3rd, 4th and so on) validates it.

2. Is a leader be a visionary or is he just a lone nut? Again, it is only a movement when more than one person joins.

3. How can a leader get buy in from others? The key seems to be–at least in this video–acknowledging the second person and the early followers.

4. When is it a movement? Tricky question, but one could argue that it becomes a movement when the costs of non-participation are greater then the cost of participation. Or, at least when there is no cost to participation. We find that in a lot of social movements in the United States. At some point the cost of being against women voting became much higher then the cost of being for it, or at least being indifferent. Perhaps the same could be said of opposition to gay rights, civil rights, marijuana legalization and other big changes.

 

Think About it Friday: How a Japanese Kindergarten Design Can Help Your Business

I love TED talks. I love them so much so, that I decided to replace my morning news reading with a TED talk. They are much more uplifting than the news, and I find them a great way to get my mind thinking about what I do and what I can be doing.

One of the best talks I’ve seen recently is one about the design of a kindergarten in Japan. The basic premise of the talk is that design and architecture mold our environment and smart design can encourage movement, interaction and development. Here’s the video:

My take aways from video (as they relate to business) include:

1. Creating useful space can be achieved through removing barriers and clutter as much as it can be made through adding.

2. Communal space (like the four-sided wash basin) will create interaction and community.

3. Risk taking can be encouraged through design and planning.

4. Sometimes the solution to what we need is not at ground level.

5. Kids (and adults!), given the opportunity, will explore the space you give them.

6. Nature in a work environment can bring beauty and connection to the outdoor world.

What could your business do differently?

Kona Impact | 329-6077