What do small businesses in Hawaii need? And what challenges do they face?
The University of Hawai‘i Economic Research Organization, or UHERO, asked and more than 1,000 small businesses answered. The findings were highlighted in a new report released Monday that looked at the state of small businesses in Honolulu last year.
A large-scale survey with 1,024 respondents and "in-depth interview discussions" with 11 small businesses "provided a comprehensive view of the small business ecosystem," the report notes.
“Small businesses are the backbone of Honolulu’s economy, but they face significant hurdles in accessing critical resources,” lead author Ruben Juarez, UHERO-HMSA distinguished professor, said in a statement. “Our findings offer clear, actionable recommendations to foster growth and resilience in this vital sector.”
Financing is among the challenges faced by small businesses. Nearly 53% of respondents reported "good or excellent access to financing," but nearly 30% said they face "significant barriers" that include high interest rates and complex procedures, the report notes.
Employee recruitment and retention also remains a challenge for about 38% of those who responded.
Here are five takeaways from the report, titled "Investigating and Tackling Barriers and Needs for Small Business Success in Honolulu."
— Who was surveyed: Although the survey aimed to measure O‘ahu businesses, the report notes that nearly 18% of respondents were not located on the island and just over 1% of the sample was not in Hawai‘i. Nearly 54% of the businesses were located in Honolulu, but others were located in communities across O‘ahu, as well as Kahului and Hilo.
— Top needs: Marketing and sales, financial resources and human resources were identified as the top needs for small businesses, with minority-owned businesses showing a "higher demand for financial support."
— By the numbers: About 52% of respondents noted the importance of networking but time constraints and geographical challenges were among the barriers in doing so effectively. Nearly 29% of businesses said they face challenges accessing new customers, with marketing and advertising difficulties, and maintaining an online presence identified as major barriers. More than 93% of businesses found "innovation support valuable."
— Small business interviews: Among insights gathered from the small business interviews, UHERO said participants noted concerns about the ability to compete with large online corporations and other e-commerce sites; the need for improved technology support; staffing challenges; and difficulties securing financing — whether for startup costs, expansion or day-to-day operations. Participants spoke also of the importance and value of networking.
— Recommendations: Some of the recommendations noted in the report include continuing and developing programs tailored to minority-owned and new businesses, including those focused on financial planning, marketing and workforce development; strengthening networking opportunities by creating "centralized networking systems to help small businesses build connections and collaborate on projects" and hosting regular industry-specific events and mixers; providing training for digital marketing and e-commerce; working to simplify financing and provide low-interest loans; promoting workforce development by starting initiatives for technical skills training, leadership development and employee retention efforts; and implementing policies from comparable cities to foster small business growth and sustainability.
The report was funded by the City and County of Honolulu's Office of Economic Revitalization and can found in its entirety here. Business owners and stakeholders can also engage with OER through the O‘ahu Business Connector website.
Stephanie Salmons can be reached at stephanie@alohastatedaily.com.
