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The nitty-gritty of starting a business
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| Attendees of Friday’s free workshop, ‘How to Start a Business on Kaua‘i,’ listen to John Latkiewicz, director of the Kaua‘i Small Business Development Center, as he discusses what owning an enterprise entails and the steps required to successfully launch a business on the island. Coco Zickos/The Garden Island |
By Coco Zickos - The Garden Island
LIHU‘E — Starting a business is not as glamorous as it might seem and certainly is no easy feat, said John Latkiewicz, director of the Kaua‘i Small Business Development Center, during a free workshop Friday morning at Kaua‘i Community College.
Difficulties often arise when attempting to discover the truth about how businesses are truly doing on the island, and one could easily be led to believe it’s a breeze to get an enterprise started.
However, Latkiewicz won’t lie when it comes to discussing “How to Start a Business on Kaua‘i” — the topic of Friday’s workshop. He really gets down to the nitty-gritty; there were no sugar-coated rainbow sprinkles for attendees that day.
“I hope nobody here is thinking that running a small business is going to be an easy thing,” he said. “You really have to be prepared for a lot of sweat and tears, that’s just kind of the nature of the beast.”
In truth, he said approximately 80 percent of small businesses fail and, according to the U.S. Small Business Association, over 50 percent of small businesses abort within the first five years.
That’s not to say Latkiewicz discourages entrepreneurs from following through with their individual passions, he just wants to nullify any alluring pre-conceived notions and instead be honest about the hard work required in owning a business and the necessary goals one has to be clear about before getting started.
Randall Francisco, president of the Kaua‘i Chamber of Commerce, agrees that as long as an individual has done the proper research, this could be an opportune time to start a company.
“I think this is a strategic time for anyone to consider going into business, mainly because we know eventually that the economy will turn,” he said in a phone interview Friday.
Someone who might have just been laid off from a job, for example, would have a chance to do a self-assessment and possibly gain a better understanding of their true hobbies and interests.
“If there aren’t opportunities in terms of jobs, you want to look internally to create an chance for yourself,” he added.
There are several ways to help a business propel into a successful future, and creating a business plan is one of them, said Latkiewicz.
Developing a business plan is one of the foundations for launching a business, not only to apply for loans, but to help “test drive your idea.”
“Think about this as an exercise where you can really be clear about what it is you’re doing and what it is you want to do,” he said.
Research, including market analysis, is another element that is fundamental to the inauguration of a business.
“For a lot of you, there’s a passion behind what you’re trying to do, and that’s great, you need the passion, you need the drive,” Latkiewicz said. “Passion can also, at times, blind you to the realities, especially the market.”
Making contacts, finding out about competitors and discovering what customers want are all integral to the initial investigation.
“For the most part, you’ll find that most of your competitors are not really that worried about talking to you, especially on Kaua‘i,” Latkiewicz said.
Francisco agrees that finding out what is marketable is an important aspect of business.
“Customers give the best information; make sure you know what they want” he said. “You might think you know it all, but in the end, they’re the ones that determine your success.”
Francisco adds that while businesses have come and gone on the island, there are always those which stay strong and some that are even expanding operations at a time where many are doing the exact opposite.
“There are pockets of good news that I’m privileged to learn about. People are holding their own, they’re staying focused and making the changes they need to survive this downturn,” he said.
Yet, as Latkiewicz reminded the workshop Friday, starting a business is not for the faint of heart, especially when considering the financial strategizing involved.
“Find the time to really document what you’re doing so you know the kind of numbers that you’re seeing, where they’re coming from and how they break down.”
He calls this “financial intelligence,” and said not keeping track of expenditures can lead to a disaster.
He also specified the important decision about choosing the right location.
“You might be able to get a really fantastic deal on a place that customers won’t come to and the temptation may be to really be thinking in terms of doing extra marketing, but being honest with yourself in this business plan and really thinking things through is important,” he said.
Other expenses which one will incur along the way are fees for an accountant, business attorney and insurance agent, as well as allocating the money necessary to pay for Hawai‘i general excise taxes, which is about 4 percent of a business’ gross sales.
While not exactly as financially charming or economically friendly as some might initially think, especially given the current climate, starting a business can be rewarding.
“Do your planning. If you are really honest and you’ve looked at the market and you think that there’s something there and you’re willing to assume the risk ... it’s not necessarily a bad time,” Latkiewicz said, noting that he is familiar with businesses that are booming on the island. “In one sense, you’re getting ready for the next upswing in the economy.”
SBDC offers free consulting services for individuals seeking advise in expanding their existing business or developing a new one.
For more information visit www.hawaii-sbdc.org or call 241-3148.
Difficulties often arise when attempting to discover the truth about how businesses are truly doing on the island, and one could easily be led to believe it’s a breeze to get an enterprise started.
However, Latkiewicz won’t lie when it comes to discussing “How to Start a Business on Kaua‘i” — the topic of Friday’s workshop. He really gets down to the nitty-gritty; there were no sugar-coated rainbow sprinkles for attendees that day.
“I hope nobody here is thinking that running a small business is going to be an easy thing,” he said. “You really have to be prepared for a lot of sweat and tears, that’s just kind of the nature of the beast.”
In truth, he said approximately 80 percent of small businesses fail and, according to the U.S. Small Business Association, over 50 percent of small businesses abort within the first five years.
That’s not to say Latkiewicz discourages entrepreneurs from following through with their individual passions, he just wants to nullify any alluring pre-conceived notions and instead be honest about the hard work required in owning a business and the necessary goals one has to be clear about before getting started.
Randall Francisco, president of the Kaua‘i Chamber of Commerce, agrees that as long as an individual has done the proper research, this could be an opportune time to start a company.
“I think this is a strategic time for anyone to consider going into business, mainly because we know eventually that the economy will turn,” he said in a phone interview Friday.
Someone who might have just been laid off from a job, for example, would have a chance to do a self-assessment and possibly gain a better understanding of their true hobbies and interests.
“If there aren’t opportunities in terms of jobs, you want to look internally to create an chance for yourself,” he added.
There are several ways to help a business propel into a successful future, and creating a business plan is one of them, said Latkiewicz.
Developing a business plan is one of the foundations for launching a business, not only to apply for loans, but to help “test drive your idea.”
“Think about this as an exercise where you can really be clear about what it is you’re doing and what it is you want to do,” he said.
Research, including market analysis, is another element that is fundamental to the inauguration of a business.
“For a lot of you, there’s a passion behind what you’re trying to do, and that’s great, you need the passion, you need the drive,” Latkiewicz said. “Passion can also, at times, blind you to the realities, especially the market.”
Making contacts, finding out about competitors and discovering what customers want are all integral to the initial investigation.
“For the most part, you’ll find that most of your competitors are not really that worried about talking to you, especially on Kaua‘i,” Latkiewicz said.
Francisco agrees that finding out what is marketable is an important aspect of business.
“Customers give the best information; make sure you know what they want” he said. “You might think you know it all, but in the end, they’re the ones that determine your success.”
Francisco adds that while businesses have come and gone on the island, there are always those which stay strong and some that are even expanding operations at a time where many are doing the exact opposite.
“There are pockets of good news that I’m privileged to learn about. People are holding their own, they’re staying focused and making the changes they need to survive this downturn,” he said.
Yet, as Latkiewicz reminded the workshop Friday, starting a business is not for the faint of heart, especially when considering the financial strategizing involved.
“Find the time to really document what you’re doing so you know the kind of numbers that you’re seeing, where they’re coming from and how they break down.”
He calls this “financial intelligence,” and said not keeping track of expenditures can lead to a disaster.
He also specified the important decision about choosing the right location.
“You might be able to get a really fantastic deal on a place that customers won’t come to and the temptation may be to really be thinking in terms of doing extra marketing, but being honest with yourself in this business plan and really thinking things through is important,” he said.
Other expenses which one will incur along the way are fees for an accountant, business attorney and insurance agent, as well as allocating the money necessary to pay for Hawai‘i general excise taxes, which is about 4 percent of a business’ gross sales.
While not exactly as financially charming or economically friendly as some might initially think, especially given the current climate, starting a business can be rewarding.
“Do your planning. If you are really honest and you’ve looked at the market and you think that there’s something there and you’re willing to assume the risk ... it’s not necessarily a bad time,” Latkiewicz said, noting that he is familiar with businesses that are booming on the island. “In one sense, you’re getting ready for the next upswing in the economy.”
SBDC offers free consulting services for individuals seeking advise in expanding their existing business or developing a new one.
For more information visit www.hawaii-sbdc.org or call 241-3148.
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| Kaua‘i Currency |
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