How to Start a Business in Hawaii: The Ultimate Guide, Step-by-Step

Hawaii has a warm climate, which makes living conditions comfortable and increases business opportunities.

If you want to start a business in Hawaii, there are important steps you must take to make it successful. And this article explains the step-by-step guide on how to start a business in Hawaii.

Meanwhile, before we talk about the steps, you should know that most of Hawaii’s top business opportunities are geared towards meeting the needs of tourists. Because Hawaii has become one of the most visited tourist destinations.

Hence, if you want to establish a business in Hawaii soon, the best business idea that will fly are tuned towards tourists’ satisfaction.

That said, you can start with the business ideas that have shown top prospects from recent research.

But never think it will be a straightforward task for you to scale through. You need to follow through with the step-by-step guide we’ve outlined here.

It’s the ultimate guide you need to start any business in Hawaii in 2021.

Facts about Hawaii

Hawaii is sure a fascinating place to visit and live with its eight main islands. No wonder each year it welcomes over 9.3+ million visitors.

That’s massive!

If taking a trip to the beautiful Hawaiian islands is your dream, you’ll love to know these interesting facts about Hawaii.

Check Out: How to Start a Business in Georgia in 2022

Hawaii has the World’s Largest Island Chain

Hawaii is the only state in the Unites State completely made up of islands.

However, only 7 of 132 islands do people live in: Hawaii (also known as the Big Island), Maui, Molokai, Lanai, Oahu, Kauai, and Niihau.

Hawaii is the Only State with Massive Natural Resources

Hawaii has rich soil, and this makes them the best state with natural resources.

They grow crops like Sugarcane, Pineapples, Coffee, Macadamia nuts, and Flowers, and it has formed an important source of income for the state’s economy.

When you’re visiting Hawaii, be certain to grab a cup of locally grown coffee.

Check Out: How to Start a Business in Connecticut in 2022

Hawaii is the Backdrop of Multiple Hollywood Blockbusters

It’s not difficult to understand why most film studios choose Hawaii as their destination for movies they consider as blockbusters.

From the rugged mountain terrains, the picture perfect beaches, and the islands, shooting movies like Jumanji wasn’t difficult.

Some favorite movies and TV shows filmed on the Hawaiian islands include:

Jumanji
Pirates of the Caribbean
The Hunger Games: Catching Fire
LOST
Forgetting Sarah Marshall
Indiana Jones: Raiders of the Lost Ark

Fast Facts About Hawaii

Capital: Honolulu

Nickname: The Aloha State

Language: English and Hawaiian

Statehood: 1959; 50th state

Biggest City: Honolulu

Abbreviation: HI

Currency: US Dollars

International Airport: Honolulu International Airport

State bird: nene, the Hawaiian goose

State flower: Yellow Hibiscus

Number of Inhabited Islands: 7 (Hawaii; Big Island), Maui, Molokai, Lanai, Oahu, Kauai, and Niihau.)

Common Sport: Surfing

Population (as of July 2015): 1,431,603

Fast Facts About Hawaii

Is Hawaii a Good Place to Start a Business?

In my own opinion, Hawaii is not the best place to start a business.

Yes, a lot have tried, but the failure rate is quite high in Hawaii than in other states. And the only lucrative business (tourism) left to start has tremendous competition.

If you don’t have powerful experiences in tourism in another part of the world, making it in Hawaii will be very difficult.

Also, the cost of renting business spaces, employees, and tax rates are prohibitive.

According to a personal finance website – WalletHub, ranked Hawaii as the worst state to start a business in the United States in its “2018’s Best & Worst States to Start a Business” analysis.

The Aloha State scored 37.16 out of 100 points, making it fall as the 50th place.

This is because Hawaii has the highest labor costs in the country, with the lowest availability of human capital, and the highest cost of living.

Other factors include average growth in the number of small businesses, office space affordability, access to cash, skilled workers, and industry variety.

So, before you think of starting a business in Hawaii, it’s important you consider so important factors.

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Know the Island Well

Maybe you can start by familiarising yourself with the island. The way things get done in Big island won’t mean it will work the same way at Oahu.

Most business analyst recommends for you to live on the islands for a year first. Get to know the business community of the island you’ve selected.

It advisable to never assume that since you shape boards in Florida, that when you move to Hawaii, you can also pick up shaping boards on the North Shore.

Find out what works well for others and implement it in your own idea with a little change.

So if you don’t already live on the island on which you want to start a business, your first step of having a successful business is getting to know it well.

Understand Who Your Customers Are

Hawaii’s population differs from other states in the USA and the world. Hence, it is very hard to assume what locals and tourists are going to love and buy regularly.

So you ought to know your customers and understand how to beat the competition.

What is a Good Business to start in Hawaii?

With Hawaii being the number one tourist destination in the US, all business opportunities in Hawaii gears toward serving tourist needs.

It’s difficult to start up any other business due to how Hawaii’s warm, tropical weather, tourist needs, and activities stay relevant throughout the year.

Now here are top 10 business opportunities in Hawaii:

#1. Vacation Rental Services:

Tourists that visit Hawaii rent about everything that makes their stay interesting. It ranges from lodging to surfboards, snorkeling gear, and bicycles.

Starting Hawaii rental properties can be quite a lucrative business. You can also create a rental service website to publicize your business.

Check Out: Become an Airbnb Host and Make Lots of Money | BEST GUIDE

#2. Tour Guide:

With the huge number of tourists visiting Hawaii every year, local residents have a great opportunity to start a “Tour Guide” business. You certainly know the best places to visit for tourists.

#3. Style Home Store:

Hawaiian-style home decor and furniture is a booming business in Hawaii. If you’re a designer, you have a wider opportunity to start your own retail/online store.

Check Out: 25 Legit Crafts That Make Money From Home In 2021

#4. Restaurants and Bars:

You can’t neglect the place of food and drink in the life of tourists. Restaurants and bars that serve quality food and drinks with a Hawaiian flair have a grand chance for success.

Check Out: How to Become a Bartender with no Experience in 2021

#5. Food Truck Business:

Food Truck Business is also a very lucrative business to start in Hawaii. Being a flexible kind of business and also grants you the chance of mobility, you can make sales anywhere there is an event.

Check Out: How to Start a Food Truck Business in 2021: The Ultimate Guide, Step-by-Step

#6. Transportation Business for Speed Boat and Canoes:

With several islands surrounding Hawaii, water is one of the major means of transportation.

Starting up a transportation business for speed boats and canoes can be a lucrative one for you.

#7. Hawaiian Apparel Maker:

For anyone who has been to Hawaii will always go back with a souvenir (the Aloha shirt).

If you’re a designer, it’s an opportunity to design, manufacture and sell Aloha shirt and clothing to all tourists that visit. It’s i one of the most promising business opportunities in Hawaii.

Check Out: How to Start an Online Boutique : The Ultimate Guide, Step-by-Step

#8. Grocery Store:

This is one of the simplest and an effective way to make money in Hawaii.

Most residents and tourists that visit complain of the lack of major grocery stores nearby; that the right market for you.

Jus rent a small place and stock up things that people often buy.

#9. Wedding & Family Photography Business:

Being a tourist city, many people will come to Hawaii to get married, renew their vow, and family reunions.

With these special life events going on every day, you can maximize the opportunity to start up a photography business.

Check Out: 21 Ways To Get Paid To Take Photos [$100+] | 2022

#10. Dry Cleaning and Cleaning Services

Hotels, restaurants, bars, and even Airbnb homes always need the service of cleaners You can seize this business opportunity by starting your own cleaning company.

Also, the pace of dry cleaning services is always a need for the tourists who visit. You can even add a touch of home delivery to them. Doing this will help you buy off your customers.

Best Places To Start A Business In Hawaii

You can run all the lucrative businesses listed above very well if you choose the right location.

Here are some of the best places in Hawaii to start your business:

Oahu
Honolulu
Lahaina
Hilo
Hana
Kihei
Kahului
Princeville

What are the Top Startups that started in Hawaii?

One major problem in Hawaii is the limited opportunity for businesses to grow. Yet, there are specific industries that are excelling on the different islands of Hawaii.

If you’re having a problem with starting up your business in Hawaii, then you should hear the testimony of these startups in Hawaii.

Listen and read how they could stand firm amidst the restraint in starting a business in Hawaii.

Here are some top startups that are still in their unique business in Hawaii:

Castle Vacation Rentals, Hawaii: One of the best Hawaii vacation rental management.
Aloha Outlet – Hawaiian Goods & Apparel

Do You Need a Business License in Hawaii?

If you want to start a small business in Hawaii, you will need to obtain one or more state license or permits.

However, Hawaii doesn’t have a required general business license for all businesses, unlike other states in the United States.

Some businesses may be required to obtain permits from state agencies. For instance, there are businesses that may need a permit related to health and safety, which the Department of Health can only issue.

Also, some licenses are required to be issued locally. Meanwhile, the requirements vary greatly by city or country involved.

Beyond obtaining required licenses or permits, some legal forms of business, such as corporations and limited liability companies (LLCs), are required by the state to file records.

You can check the Business Registration (BREG) section of the DCCA website for more details.

In addition, if you’re a member of any one of many professions and vocations, you’ll need to be licensed by the State of Hawaii. The DCCA’s Professional and Vocational Licensing Division (PVL) is responsible for licensing for 49 different professions and vocations.

The PVL website lists each of these professions and vocations.

At the same time, there are separate legal definitions for trademarks, service marks, and trade names. They are used to uniquely identify goods (products), services, or a business.

This includes distinguishing a product, service, or business from potential competitors. Anyone starting a business can register for trademarks and service marks with the state.

Note that this is different from federal registration.

How Much Does it Cost to Start a Business in Hawaii?

There is no specific amount to quantify how much you can spend when starting a business in Hawaii.

The amount you spend totally depends on the type of business you want to start.

For instance, a couple that owns “Basique Threads“ shared their story of how they started and the cost surrounding starting their business.

It cost them about $15,000 to build out the 980-square-foot retail space. Inventory cost several thousands more.

In total, the couple spent about $50,000 to open the doors of their clothing boutique last November.

Here is another example.

Melissa Bow, who started Via Gelato, a food truck business, explains her experience of how much cost she spent when starting her food truck business.

She said;

“I found a delivery truck on Craigslist for $4,200. And spent $100 for the countertops and paid another $200 to a friend who cut and installed them. I bought the two freezers on sale at Sears for about $1,200.

In total, she spent $5,900 to start her food truck business in Hawaii.

Looking at both scenarios, the amount might be expensive or affordable. Yet it’s not a guarantee that you’ll spend the same amount when starting your business.

However, this will give you a better understanding of what it might cost you when you choose to start a business in Hawaii.

How Can I Start a Business in Hawaii in 2022: A Complete Guide

It’s obvious starting a business in Hawaii is a brilliant choice for entrepreneurs. However, it can be successful if you know the right step to take.

You can easily start your business today with our simple step-by-step guide and get on the fast track to financial independence.

To Start a Business in Hawaii, follow these steps:

Step 1: Choose a Business Idea

The first step in starting a business in Hawaii is having a good business idea and concept.

Choose a business idea that satisfy your interests, your natural goals, and maybe your personal goals.

If you’re confused and don’t know the right business ideas to choose from, check our library of business ideas to get firsthand information, cost to start, tips to start, and lots more.

Step 2: Write a Business Plan

Most successful businesses that exist in Hawaii were built through proper planning.

Once you’ve got your business idea, the next step is to work on the business plan.

One solid reason people consider writing a business plan is when the back request for it for funding.

That shouldn’t be so.

Writing a business plan gets the ideas out of the entrepreneur’s head and helps create a roadmap for where they want the business to go.

While creating your business plan, have appropriate answers to the following questions.

What should my Business Name be: Choose a brand name that follows Hawaii naming rules, resonates with your customers, and is available as a URL.

What problem does your business solve? (Product Development): What will set your product or service apart from the competition?

Who are your potential customers? (Sales & Marketing): How will you get their attention and convert them into buyers?

People and Partnerships: What roles will you need to hire and what professional relationships will you need to form in order to succeed?

Financial Planning: How many clients or sales will you need in order to break even? How much money will it take to get there, and where will you get the funding?

Asides answering these questions, your business plan should contain;

Executive Summary
Business Description
Operational Plan
Market Evaluation
Market Strategies
Promotional Strategy
Sales Projections
Management & Operations
Financial Projections

Step 3: Choose a Business Entity

The next step to take after planning your business is selecting a business entity.

What do we mean by business entity?

Business entity also called business structure refers to the organization of business legally or how a business is organized legally.

Currently, in Hawaii, there are four primary business entities:

Sole proprietorship
General Partnership
Corporation
Limited Liability Company (LLC)

Here is a brief description of each business entity.

Sole Proprietorship: Sole Proprietorship is the individual that goes into business. In Hawaii, setting up a sole proprietorship is the easiest, as it doesn’t require state filing.

However, a major downside to the sole proprietorship is that the owner is personally responsible for all debts and actions of the company.

General Partnership: A general partnership is just similar to the sole proprietor, except it involves two or more people conducting a business together.

In Hawaii, the cost to register for General Partnership with the Hawaii Department of Commerce and Consumer Affairs is $15.

Corporation: A corporation is a business structure that is a separate entity from the individual. Although setting up Corporations in Hawaii is more expensive than sole proprietorships and partnerships, the advantage it gives provides personal asset protection for the owners, should they sue the corporation.

In Hawaii, the cost to form a corporation by the Department of Commerce and Consumer Affairs, Business Registration Division (BREG) is $50.

Limited Liability Company (LLC): The Limited Liability Company (LLC) is a popular business entity in Hawaii. Because it provides the liability protection of a corporation with the sole proprietorship’s ease of operation.

The initial cost to file the Articles of Organization and form a Hawaii LLC is $50.

Step 4: Register Your Business Name

After selecting your choice business entity, the next step in starting a business in the state of Hawaii is to register the business name.

If you are a sole proprietorship or general partnership in Hawaii and doing business under your full first and last name, there is no filing. For example, Jane Doe.

But if the business will operate under a trade name or business name like Jane Doe’s Apparel, Mr. Handyman, etc., you will need to register the business name.

If you chose Corporation and LLC, you’ll have to pick a name when filing for the entity.

Registering your business name (Trademark) helps to stop others from using your name, slogans, and logos legally.

We also recommend that you check online to see if your business name is available as a web domain. GoD a ddy is a good place to check.

Step 5: Get an EIN for Taxes

The Employer Identification Number or EIN is a nine-digit tax identification number issued by the Internal Revenue Service (IRS).

This number identifies a business operating in the U.S and is used for paying payroll taxes, filing tax returns, and more.

Partnerships, corporations, and most LLCs OR sole proprietorships with employees MUST register for an EIN.

In Hawaii, filling the EIN is done online through the IRS website. This takes only a few minutes and the number will be available.

Check Out: Why Every Business needs a Tax Attorney in 2022 | A Must Read

Step 6: Open a Business Account

Creating a business banking account is essential for personal asset protection. It means it can help you track the business’s income and expenses.

This will also help you learn how to build business credit by getting business credit cards, better interest rates, higher lines of credit, and other financing in your business’s name.

Setting up a business account in Hawaii differs from the bank you choose. Generally, the bank will request the following according to your business entity:

Sole proprietorship & Partnership: Trade Name Certificate, EIN or SSN, and the owner (s) driver’s license.

Corporation: Articles of Incorporation, bylaws, Certificate of Good Standing, EIN, and owner (s) driver’s license.

LLC: Articles of Organization, Operating Agreement, Certificate of Good Standing, EIN, and owner (s) driver’s license.

Check Out: Top 10 High Yield Business Savings Account in 2022

Step 7: Apply for Business Licenses & Permits

To operate your business legally in Hawaii, there are certain licenses you’ll need to achieve.

However, these licenses and permits vary by location and business activities.

The most common license registrations in Hawaii include:

Business Licenses: Most cities in Hawaii may require a business license to operate. However, the state of Hawaii doesn’t have a general business license to give.

You can only get business permits and/or licenses depending on your business.

For instance, a restaurant and bar will probably need health permits, building permits, signage permits, etc.

Professional Licensing: Some services in Hawaii require licensing to operate, not necessarily on the business. These services include accountants, contractors, vehicle repair, pest control, and private detectives requiring licensing in Hawaii.

Step 8: Get Funding

Getting the funds to finance a business in Hawaii is a challenging process for many.

Not only are there unknown terms like collateral, equity, assets, liabilities, and more, but there are multiple sources of financing with different rules, processes, and costs.

You can either source for funds from conventional bank loans, Small Business Administration (SBA) loan guarantees, investors, grants, and many other. However, it’s difficult to navigate what is available and what is best for your business.

Step 9: Obtain Business Insurance

In most cases, you will never find business insurance at the top of the list for those tat want to start a business. However, business insurance is critical as it helps to protect your business.

Opting for business insurance in Hawaii is optional, but it’s essential for regaining your business in case of unprecedented events.

The most common types of business insurance you should consider are:

General Liability Insurance
Workers Compensation Insurance
Professional Liability Insurance

Step 10: Set up an Accounting System

Setting up an accounting system for your business is one of the most important things you can do for your business to ensure its long-term success.

Staying on top of finances not only keeps the business out of trouble with the IRS and stays on top of state taxes, but it can also track and monitor business trends and maximize profits.

Data they say “is life.” Data saves businesses every day.

Setting an accounting system for your business in Hawaii will help you keep track of necessary data that can save your business now and in the future.

Most importantly, you don’t necessarily need an accountant. You can do it with pen and paper, spreadsheets, accounting software, or hiring a bookkeeper.

Step 11: Hire Employees

You can’t have a complete business structure without employees.

However, hiring employees is for new business owner can be challenging. Not to worry, there are multiple agencies to register with and get the right employees you need.

Step 12: Promote your Business

Your business can’t go global if you don’t promote it. Promoting your business helps it get to the right customers.

There are many methods to promote your business as a new business owner in Hawaii, but two are most effective of them all. They are:

Press Releases
Facebook

Also, establishing a professional website for your business can never be overestimated.

A website allows potential customers to find your business online and discover the products or services you offer, and it also enhances your business’s credibility.

Aside from these methods above, you can also consider promoting your business online by:

Setting up social media profiles (Instagram, Twitter, etc)
Creating accounts on review sites (Yelp, Google Reviews, etc)
Registering for a local Google profile

Final Thought

Before you attempt to start a business in Hawaii, it’s important you plan to live on the islands first, at least for 8 months to one year.

With this and the step we’ve slated above, starting any business in Hawaii will be as easy as shaping boards.

References

tripster.com – 10 OF THE MOST INTERESTING FACTS ABOUT HAWAII
makaihr.com – Top 10 Business Opportunities in Hawaii
hawaiibusiness.com – How much does it cost to start up a business?
nolo.com – How to Get a Small Business License in Hawaii
startingyourbusiness.com – Starting a Business in Hawaii | Simple, Step-by-Step Guide
howtostartanllc.com – How to Start a Business in Hawaii