SBH Sunrise February 26
Bob Sigall - Creative 1

Mon., February 9
Government Day
State Capitol

Wed., February 11
SBH Board Meeting
Pacific Club | 12 noon

Tue., February 17
Aiea-Pearl City Business Association
Pearl Country Club | 12 noon

Thurs., February 26
SBH Sunrise
Bob Sigall
Pineapple Room | 7 - 8:30 am

CONFERENCE AWARDEES | CONFERENCE SPONSORS

Dale Evans of Charley's Taxi was named "Small Business Person of the Year" at this year's SBH Conference. She is shown with last year's winner, Andy Mertz of Andy's Pool Service. Conference details will appear in the upcoming February 2004 Small Business News.

Rutledge, Lingle Bullish on Hawaii
at 28th Annual SBH Conference

By Malia Zimmerman, Hawaii Reporter

Small Business Hawaii hosted the first major business and investment conference of 2004 during its 28th annual conference Wednesday, January 14, bringing more than 250 small business owners together with Gov. Linda Lingle and several of her key cabinet members who outlined their plans to better Hawaii's business climate and their progress over the last year.

The theme of the conference was: "Small Business 2004: Platform for Hawaii's Capital Formation & Economic Growth."

Though Hawaii has been ranked dead last in several national studies over the last few decades in terms of business climates friendly to business, the governor and her cabinet members pledged to reform the policies, rules, regulations, mandates and taxes that have earned Hawaii that notorious rating.

Congressman Ed Case, D-Hawaii, spoke about his role on the small business and education committees in the U.S. House of Representatives, and his bill to amend or abolish the Jones Act, which increases the cost of goods imported to and exported from Hawaii.

Keynoting the conference was Dr. John Rutledge, chairman of Rutledge Capital, a private equity investment firm that has invested more than $150 million in the middle market manufacturing, distribution and services companies. In addition to also being chairman of Rutledge Research and founder of the Rutledge Institute, a forum for capital and growth policy, Rutledge serves as an economic advisor to President George W. Bush and developed economic policy for President Ronald Reagan.

A number of business owners also were recognized for their success and asked to share their experiences during the "Small Business Stories" segment.

Congressman Case called on small business owners, free market advocates and lawmakers to support and help lobby for three bills he introduced in the U.S. House in 2003. The bills which all deal with the Jones Act, call on Congress to either abolish the it or give Hawaii an exemption. Republican lawmakers in the State House and Senate announced they will support Case's legislation and plan to introduce resolutions asking Congress to abolish the Jones Act.

Case, who serves on the small business committee in the U.S. House as well as the education committee, says he and others on the small business committee are working to ensure small businesses and not large businesses, win the federal construction contracts set aside for small business contractors.

The federal government is in the process of awarding $235 billion in contracts for military-related projects, such as the construction and upgrading of military housing.

Four of Governor Lingle's cabinet members spoke on improving Hawaii's business climate. Those include Director of the Department of Business, Economic Development and Tourism Ted Liu; Director of the Department of Commerce and Consumer Affairs Mark Recktenwald; Director of the Department of Labor and Industrial Relations Nelson Befitel, and Director of the Department of Land and Natural Resources Peter Young.

Liu is looking for ways to bring more capital into Hawaii to fund both high technology businesses and small and mid-sized businesses, shared reasons why investors are hesitant to put money into Hawaii's businesses. That includes local real estate booms that attract capital and an "Asian mentality." Liu, who is from Asia, says Asians have an "abysmal" investment record when it comes to business investment and are extremely cautious as to what they do invest in, such as real estate. Hawaii is hampered even more by the fact that it is not business friendly, Liu says.

Recktenwald says he is working to reform the workers' compensation system in Hawaii, which is one of the most expensive mandates of operating a business, including bringing the responsibility of investigating workers comp fraud under his insurance division. He also is trying to eliminate the 4% general excise tax exemption that Hawaii's current medical insurers benefit from because they are non-profit so that more for profit medical insurance companies will have an incentive to operate in the state.

In addition, Recktenwald is working on other options for health coverage. He is striving to eliminate the elaborate regulatory requirements surrounding Medical Savings Accounts.

Nelson Befitel of the DLIR is working to make the labor department more friendly to business. In the past, the department has had the reputation for being hostile and extremely biased against business, but Befitel who has a background in business and labor is changing the department's attitude and policies to make them more fair.

One of the major changes is in the labor inspection department — HIOSH — the single most complained about department by business. He says while in the past, businesses were fined for even the smallest violation, such as running an extension cord to a fan, inspectors are now being asked to counsel business owners instead of fining them.

DLNR Director Peter Young says his department has a big task in managing the state's coastal waters, conservation land and a budget of $70 million, among other responsibilities. He is also trying to become more fair in how the DLNR treats business. Young, who was a real estate appraiser for 25 years, says he is on a mission to overhaul the state's facilities, including restrooms, a major task that will cost more than $100 million. Hawaii is the fourth largest coastal state with 750 miles (compared with California that has 850 miles of general coast area).

Three small business owners attending the Small Business Hawaii conference shared how they became successful in their business.

Fran Egdamin, president of Hawaii Test Borings, Inc., discussed how she has become successful, despite being in a male-dominated profession.

Clarice Johnson, owner of Johnson Property Management, gave tips on how to survive in business, including having at least one year of funds to keep the rent paid and groceries on the table. "Do a well thought out budget for a year, slash your income in half, double your expenses and that is probably what you will have," Johnson said.

Tom Jones, co-owner of Gyotaku Japanese Restaurant, talked about his journey from management to ownership at Gyotaku. He says one of the keys to his business' success is a partner that always asks "the right questions," including what qualified their business as a "success story."

© 2004 Hawaii Reporter, Inc.