Five Reasons Businesses in Hawaii is Do Poorly

Kona Impact works with hundreds of businesses a year and has worked with thousands of businesses since its inception ten years ago. We have seen tremendous successes, some moderate successes, and, of course, several failures. In this blog, we love to share our observations on how to create and grow sustainable businesses in Hawaii. Here are some of our observations on why businesses do poorly in Hawaii.

  1. Bad cost assumptions. Rent, fuel, shipping, materials, labor, taxes, and regulatory compliance are higher in Hawaii than in almost all locations in the U.S. When you start a business in Hawaii, gather all your anticipated costs, multiply by 20-30% and you might be close. Failure to understand costs dooms a lot of businesses, as costs are the most salient and direct input into what you will charge your customers.
  2. Mainland concepts. Just because an idea is popular on the Mainland, does not necessarily mean it will be so in Hawaii. Our work and leisure habits are certainly different. We typically see multi-generational households, and many of our communities can be quite insular. We tend to drive much less (except commuters on Oahu), and our culinary preferences are very eclectic.
  3. Lack of community integration. Whenever a new business opens in Kona, people talk. Whose business is that? Do you know him/her? Have you been there? We call this the “coconut wireless,” which basically means that a lot of business comes from referrals from acquaintances. Joining a paddling club, theater production, sports team, service club, business networking club or faith community helps to foster connections. These connections are essential to getting your business known.
  4. No marketing plan. “Build it and they will come” is the worst business strategy ever. At the very least, you need a solid website and a coherent set of graphics for your business. Add to that signage on your business and vehicles, some online advertising, and perhaps print, radio, or television advertising. Without a solid plan, you are doomed to failure. Work with professionals for this, as they are many aspects of marketing have emerged in the past 5-10 years that can be game changers for companies.
  5. Lack of effort. I find myself working many Saturdays, and almost without exception, I see three other cars in an otherwise empty parking lot: the owners of the three businesses adjacent to mine. They are there because they love what they do, but they also know that being successful at business requires working harder and smarter than your competitors. If you don’t want to work night and day, work for someone else. It’s much easier!

We always tell new clients that if we had everything figured out we’d be sipping margaritas on our yacht. We don’t. We do know, however, that business success is tough, though not unattainable. Hard work, good ideas, solid planning and a bit of luck are all part of the equation.

Kona Impact | 808-329-6077