Read the title again; this is how NOT to succeed in Business in Hawaii!
There are plenty of, “how to be successful in business” blog posts out there, so I thought I’d change things up and offer my understanding of why businesses fail in Hawaii. My perspective is that of an business owner who works primarily with small and medium-sized businesses in Kona, Hawaii. I have literally worked with hundreds of businesses at Kona Impact, and, as one would expect, I’ve seen many fail.
Here’s how to fail at business in Hawaii
1. Don’t have a firm grasp of costs and pricing. Everything here costs more than the Mainland, except papayas! Seriously, gas, housing, rent, electricity, taxes, basic services, and, of course, any supplies you need to bring in. This is why you see very few franchises on Hawaii Island; the costs of importing the franchisors supplies are very high. Many businesses make the mistake of pricing low while hoping to gain market share. This seldom works. Figure out costs, all your costs, and add a reasonable profit.
2. Discount the savvy and acumen of already established businesses. Over the years I have seen a lot of bravado and arrogance by entrepreneurs thinking that local business are inefficient and easy to beat in business. Businesses often have deep and long-lasting ties to consumers and other businesses in Hawaii. Relationships matter. Traditions matters. This is especially true in Hawaii politics and many of the older businesses here.
3. Believe because it works or sells well on the Mainland, your product or services will do well here. Understand that Los Angeles has tens of millions of consumers nearby; Hawaii 1.4 million resident who mostly live on five main islands. Also understand that most people choose to live in Hawaii because they, to some extent, are not interested in a Mainland lifestyle.
4. Don’t become involved in the community. Buy everything for your business online. Avoid the farmers markets. Shop at “big box” retailers. Don’t join a church, a Rotary club, the Lions or a paddling club. Business that do not connect with potential consumers or other business owners have a very hard time growing.
5. Start a restaurant/B&B/coffee farm/etc because “you have always wanted to.” Business is tough enough; starting a business that you have no background in is a sure way to waste a lot of money and time. The power of will and hard work are, for certain, important elements in any business, but experience, training, qualification and real-world experience are far more important. Do what you know.
How many businesses survive? Only about 40% of new businesses make it to year six.The reasons for failure are many, but based on our experience helping hundreds of businesses in Kona, Hawaii, the five reasons above–usually combined with others–are some common reasons why businesses fail in Hawaii.
Would you like to increase your chances of success? Kona Impact can help. Give us a call for a free consultation today! 808-329-6077