Kona, Hawaii Start-Up Business Mistakes

Anyone who has been in business in Hawaii knows that doing business here can be difficult. This is probably true of almost everywhere, but Hawaii does offer some unique challenges. They include local customs, unique market conditions, isolation, high costs, permits and the permitting processes, taxes, insurance requirements and many others.

Here several things that many Hawaii entrepreneurs often miscalculate, disregard or completely overlook when starting businesses in Kona, Hawaii.

It’s Not a Huge Market

The population of Hawaii Island, which is called the Big Island for obvious reasons, is only about 175,000 people with the population in Kailua-Kona only about 12,000. There are approximately 1.5 million visitors to Hawaii Island a year with two-thirds of these coming to the Kona side, which includes the main resort area of Waikoloa 30 miles north of Kailua-Kona.

The take-home lesson is that we don’t have a large resident population, and the tourist population is big, but when you consider where they go—mega resorts on the Kohala coast—many of their dollars are not spent at locally owned businesses.

Everything Will Cost More

Gas today (8-13-14) is $4.30/gallon; a gallon of milk is $5.50. New vehicles often have a “local area markup” of $5,000, and a basic starter home on the Kona side will set you back at least $400,000. Many people come here from the Mainland to start a business and completely underestimate the costs of getting a business going and living here.

Traditional Marketing Options Don’t Work

There is no Kona television station, only one newspaper and the radio stations (like everywhere else I suppose) are highly fragmented. Roadside signs are mostly prohibited. Like everywhere else, the yellow pages have ceased to be effective long ago. Add to these, the trend for many households to stop cable TV subscriptions, and you have a residential population that is very hard to reach. If you are marketing to tourists, you will have to work with booking agencies and concierges who will take 20% (or more) of the booking revenue.

Mother Nature Can Change the Game Overnight

Kailua-Kona has an inactive volcano, which last erupted 200 years ago, on one side and an ocean on the other side. A large part of our oceanfront retail area suffered significant damage from the tsunami coming from Japan in 2011. In 2006, we had an earthquake that caused a lot of damage. In August of 2014 a storm just below the level to be called a hurricane hit the east side of the island causing substantial damage. So, you have dangers from lava, earthquakes, hurricanes and tsunamis that can become overnight game changers for local businesses.

Kona Impact has been helping start-up businesses in Kona, Hawaii navigate these often treacherous waters for years. We offer a complimentary initial consultation and specialize in developing design and marketing solutions for businesses of all sizes.

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