Five Things About Business in Kailua-Kona, Hawaii that May Be a Challenge

Business, even on the best of days, can be challenging. I’d be on my yacht today if I had it all figured out. I don’t even have a boat. That said, Kona Impact has been in business for over 17 years, and in every one of those years, we’ve grown, so I feel we are doing something right.

What do I wish that everyone starting a business in Kailua-Kona knew? In other words, what things should they look out for when starting a new business in Hawaii?

It’s not THAT different!

Things like having the right products or services at the right prices apply no matter where you are. Having strong marketing, excellent customer service, and good inventory controls apply no matter where you are. Treating employees well, paying taxes, and following the law are business universals no matter where you operate. Hawaii is just like every other place when it comes to the fundamentals of business.

Labor/staffing can be a huge challenge

The unemployment rate in Hawaii County is now just 3%. That means that very few people want to work and are unemployed. Every employer I talk with, especially those in the hospitality and general labor industries, is woefully understaffed. Even mid- and upper-level jobs often need to be fulfilled. 

Anyone who wants to start or grow a business in Kona, Hawaii, will have to contend with few qualified workers and, as a result, may end up hiring underqualified people. They might not commit to performing well at a job and may imagine leaving quickly.

Imported supplies and inventory are expensive and slow to get

If Kona Impact were in LA, we would get the same or next-day delivery of everything we need, including inks, sign blanks, and machine parts.  Amazon on the Mainland now takes a day or two; in Hawaii, it can take 2 to 4 weeks. 

In Kona, Hawaii, we have two options: FedEx/UPS or ship. The express couriers can get stuff here in two to three days, but that often doubles the price for anything we buy: a $400 roll of printing materials might become $800. Having supplies shipped in is very inexpensive for us, but can take two to three weeks. Inventory management is one of the most critical parts of our business.

Costs can be high

Energy costs here are some of the highest in the nation, with .48 Kwh rates on Hawaii Island. For comparison, the average Kwh rate on the Mainland is .18 Kwh. Gas is similar to the cost in California but about 30% higher than most of the Mainland. Milk can be $6/gallon. The lowest-priced single-family home in Kailua-Kona today is $649,000. Home rentals are around $5,000 and one-bedroom condos are often $2,000.

The point is that everything you need to live and run a business here can be quite high. 

Hawaii Island’s population can be somewhat insular

There are many historical reasons why it can be challenging to integrate into some communities here, and they are what they are. You won’t change them. Understanding them, though, is essential to starting and maintaining a business here.

Kona Impact has seen hundreds of businesses come and go during our 17 years in business here. The reasons are varied, but we’ve found that those who engage the different communities and lifestyles on the island tend to do better. Into sports? Join a paddling club. Want to volunteer in the community? Become a Rotarian. Are you a creative person? Become part of the Aloha Theatre community or learn lei-making. We have many vibrant communities of faith. Referrals and word-of-mouth (the “coconut wireless”) are essential to starting, sustaining, and growing all businesses here.

I like to say that if you are looking for reasons not to start a business here, there are many. If you are looking for reasons why businesses fail, there are many. It’s not easy anywhere, and Hawaii Island can be particularly challenging. Realizing these challenges, however, can be the first step in making your business successful.