How to Start a Business in Hawaii


Do you desire the personal and financial rewards of owning your own business in Hawaii, and do you see an unmet need in your community? You may be concerned about the high failure rate of new businesses, but if you develop a comprehensive plan and prepare yourself for some investment and a lot of hard work, you can succeed.

Products and Services

Your first step is to identify the need you hope to fill. You need to have knowledge of the industry and a passion for this field to keep yourself interested in and working hard on this business. For example, you may be passionate about surfing and want to offer surfing lessons. You will have heavy competition in Hawaii for this type of business, so it must be a passion. Otherwise, you may not put in the work necessary to succeed.


After you have identified a need and evaluated your desire to fulfill this need, discuss the products and services you hope to offer. For example, will you only offer surfing lessons, or will you rent or sell surfing equipment?


Starting a business involves different types of costs. First, you need to determine what type of business you want. For example, is your business an online-only company, or will you have physical offices? These decisions significantly impact your cost evaluation.


You will have major fixed costs, such as your building rent or mortgage payment, as well as other fixed costs, such as utilities and insurance. You will have variable costs, such as inventory, equipment and legal fees. Don’t forget about employee salaries and marketing. It is important to choose your location during this step so you can calculate your building costs accurately.


Start collecting cost information through in-depth research. For example, you may search Kuaia electric to determine what your average electricity costs will be, while your employee salaries will be based on average salaries in the area and the type of responsibilities the employees’ jobs demand. These costs will be a key part of your business plan.


Hawaii is a great place to start a small business due to its 80.33% small business survival and low property tax rates. Small businesses also make up more than half of the state’s workforce. Be sure the products or services you plan to offer are needed or desired in your targeted area. For example, in Hawaii, the largest small business employers are hospitality related.

Potential Income

Calculating income is especially important if you plan to seek financing for your startup. However, this step requires extensive research. You will compare your monthly and annual costs to your potential income. You can use similar Hawaiian businesses as examples of potential profits, but you must show how your business will compete at the same level.

Business Entity Type

Your next decision should be what type of business you will start? For example, if you are interested in pass-through taxes and running your business yourself, you may choose a sole proprietorship. If you want help starting and running your business, a partnership or LLC may be a better option. Corporations are seen as separate entities, so their taxes differ from other types of businesses, but company shareholders and owners’ personal property is protected and cannot be taken by the company’s debtors or as awards in legal action against the business.

Marketing Plan

Your business goals should be stated clearly in your marketing plan. What is your desired income, what are your company’s mission and values and why are you providing these products or services? Next, identify your marketing goals and budget. For example, what are your desired customer conversion and retention rates?


Identify your target market, including its size and demographics. How will you advertise to these individuals? Will you use digital marketing tools or more traditional marketing methods? Clearly state how you will reach your target customers.


Determine if you will outsource any of your marketing. Then, include tracking and analysis tools in your marketing plan so you are able to consistently update your plan and strategies.


Your final steps include filing for a business license through the Hawaii Secretary of State’s office. You need to pay a filing fee to open your business legally. You will also be required to pay an annual fee for your business license.


After you receive your business license, you need to file for federal and state tax IDs for your business. Each state has different tax requirements, but you can contact the Hawaii Business Express office for help with this paperwork.


You may also need local licenses or permits. For example, if you want to offer alcoholic beverages, you need a liquor license. The Hawaii DCC Professional and Vocational Licensing Division has information on professional license requirements.


Your final steps are obtaining insurance and bank and credit accounts and setting up your offices, including having the utilities hooked up.


After you complete your business and marketing plans and get your business licenses, you are ready to open your doors. Be diligent and continually strive to gain new knowledge and skills that will help you succeed in your business.