Newcomer’s Guide: Starting a Business in Hawai‘i

Find out how to make the Islands work for you.
Kevin Kaji, First Vice President and Business Banking Manager at American Savings Bank. 

Hawaiʻi is more than just a paradise with amazing weather and beautiful sights—it's also a great place to do business. But what type of business is best? The key in the Islands is the same as it is anywhere else: start a business that supports the economy.


With Hawaiʻi's economy primarily revolving around tourism, real estate and military spending, it's crucial for any small business owner to find an idea or concept to support these areas. It's also important to identify your ideal customers—are they residents, or are they tourists? Since Hawai‘i is superbly located between the mainland and Asia, Hawai‘i could be a great place for your business if it caters to, or is dependent on, the Asian market. Knowing your target market and creating a strategy that fits will get you off to a great start. 


Hawaiʻi geographic location can present expense challenges. Retail space, for example, varies from island to island. More than two-thirds of Hawai‘i’s population lives on O‘ahu. Not surprisingly, most of the commerce in the state also centers on O‘ahu, which can drive up the cost of retail space. “As important as thinking about your business,” says Kevin Kaji, first vice president and business banking manager at American Savings Bank, "is deciding on where your business will be located. Take the time to understand the different islands and the pros and cons for each.”


Once you've determined your type of business, its target market and location, think about when you'll open up shop. Consider the fact that this decision can impact your finances. If your business ebbs and flows depending on the time of year, you’ll want to be open and running months ahead of when you think your business will be busiest. A lot of small businesses typically follow the calendar year in financial. “However,” says Kaji, “if a business finds itself busiest in December, closing the books on December 31 can be a challenge, depending on the type of business. In this case, the business may want to consider an alternate fiscal year-end date.” Obviously, shipping costs are higher for people in Hawaiʻi than on the Mainland U.S.  To counteract this fiscal reality, make sure your business will fill a demand and have clients and revenue lined up when you open your doors.


Introducing a new product or service to the Hawaiʻi market has the potential to be very successful, especially if it supports demand. But if you're looking to start something with a lower risk factor, says Kaji, start a business that offers a service, and consider your personal expertise. “Small business owners that work in their business and understand all facets are always more successful.”


A Step-by-Step Guide to Starting a Business in Hawaiʻi


1. Seek input from others in your business, particularly the ones who are successful.


2. Learn all there is to know about your business and understand how to run a successful business. A great concept or product alone does not make a successful business. Take the time to seek resources like the Hawaiʻi Small Business Development Center or the Small Business Administration for guidance and expertise.


3. Start building your team of experts – a great business starts with a great team! Include a business banker, certified public accountant, bookkeeper, lawyer, insurance agent and commercial real estate agent. Each of these professionals can provide valuable guidance that will help you start and run a successful business in paradise.


4. Get your finances in order:

  • Know your personal financial situation. Check your FICO score and address any issues before looking for funding. Your personal credit score is vital to running a small business, particularly as you work with outside partners.

  • Startup costs are an essential part of starting a business. Have a plan on how much you will need and where the money will come from. Have an alternate plan to obtain startup capital if your initial plan doesn’t pan out. Sometimes there are opportunities to apply for startup grants and alternative funding sources.

  • Your business plan is a blueprint of your business. Take the time to create a complete plan, then follow it. A good business plan will help turn your dream into reality. Make sure your revenue and expense projections are realistic and provide a five-year outlook.

  • Different types of business entities may expose your business to different tax liabilities. Take the time to consider what type your company will be—Sole Proprietorship, Limited Liability Corporation (LLC), S corporation, C corporation. Take the time to find a good accountant who can help provide solutions that best fit your needs.


5. Don't forget the details:

  • Register your business with DCCA

  • File for EIN#, if applicable

  • Find the right location

  • Obtain applicable licenses and permitting


For information on American Savings Bank’s products and services for businesses, visit