Small Business News
May 2005 | Online Edition
Survey Reveals Small Business Needs Help
By Darryl Mleynek, Hawaii SBDC (Hilo)
Results from a recent survey indicate that over 16,000 small businesses in Hawaii fail to support a middleclass standard of living for their owners.
When asked whether their company in 2004 was sufficiently profitable to provide a middleclass or better income for their family through a combination of salary and profit, 32.3 percent of Hawaii’s small business owners surveyed said, “No.”
The percent-ages for Oahu were 26.2 percent and for the Neighbor Islands 36.4 percent. There are approximately 51,000 small businesses in Hawaii.
It is ironic that small businesses, which drive the economy in Hawaii for the benefit of all of the state’s citizens, do not themselves often fare well.
When asked what had a significant positive impact on their business, 46.0 percent of the small business owners surveyed indicated that increased knowledge about how to operate a business improved their ability to succeed.
Conversely, 15.4 percent indicated that lack of knowledge about business operations had a significant negative impact on their business.
The survey also demonstrates that small business owners want to learn more about business operations. When asked, “If you had the opportunity to obtain free consulting for your business from highly trained and experienced professional management consultants, would you take advantage of that opportunity?”, 47.1 percent said they would.
The need for this type of consulting is very high. With the State Legislature’s support, more consulting of this type can be offered.
The Hawaii SBDC Network had a bill before the State Legislature requesting additional funding in order to better meet the demand.
Other significant negative impacts upon their businesses identified by the small business respondents included increased operating costs (noted by 60.6 percent of the respondents), employer-paid payroll taxes and medical insurance (42.6 percent), increased competition (34.5 percent), and excessive governmental rules and regulations (30.8 percent).
The State of Small Business Survey: Hawaii 2005 is an annual survey commissioned by the Hawaii SBDC Network, which is a partnership program of the University of Hawaii at Hilo and the U.S. Small Business Administration. The survey was conducted by Market Trends Pacific, Inc. and consisted of 507 telephone interviews of small business owners randomly selected. It has a margin of error of ± 5.2 percent.
Selected Comments on the Survey Results:
• It is a fact that a state’s wealth is created by its business community, and in Hawaii 96.7 percent of that community is com-posed of small businesses. It is ironic that these small businesses drive the economy, but fail to fully support their owners. (In Hawaii, small businesses account for 96.7 percent of all businesses, which is approximately 51,000 enterprises out of a total of 53,000 companies, according to 2005 figures from Dunn & Bradstreet).
Yet, in the State of Small Business Survey: Hawaii 2005, the respondents indicated that 32.3 percent of all small business owners in Hawaii fail to earn, through a combination of salary and profit, sufficient income to create a middleclass standard of living for themselves and their families. 32.3 percent equals more than 16,000 small businesses.
This finding is one of many facts that emerge from this survey of the perceptions of small business owners in Hawaii.
• More than 1,600 small businesses have had employees called up for service in Iraq. When asked whether any of their employees had been called up by the National Guard or Reserves to serve in Iraq, 3.2 percent of the respondents (which represents approximately 1,600 companies in Hawaii) answered that they had one to two employees called up. Of these small businesses, 62.4 percent (nearly 1,000 companies) said that the call-up of their employ-ee(s) created somewhat of a hardship (37.5 percent) a lot of hardship (18.7%) or extreme hardship (6.2 percent) for the business.
Not surprisingly, given the upturn in Hawaii’s economy, 45.9 percent of the respondents indicated that their sales in 2004 had increased (36.9 percent) or even increased greatly (8.9 percent).
However, 13.6 percent said their sales had decreased. The small business owners attributed the positive impacts on their businesses to increased customer demand (48.9 percent), increased knowledge about how to operate a business (46.0 percent), reduced operating costs (20.5 percent), and increased Internet sales (11.4 percent). Negative impacts included increased operating costs (60.6 percent), employer-paid payroll taxes and medical insurance (42.6 percent), increased competition (34.5 percent), and excessive governmental rules and regulations (30.8 percent).
The State of Small Business Survey: Hawaii 2005 survey of small business owners and managers was conducted by Market Trends Pacific, Inc. on behalf of the Hawaii Small Business Development Center Network (SBDC). A total of 507 completed telephone interviews were conducted from a list of 5,000 randomly selected small businesses in Hawaii.
The complete report is on the SBDC websites at http://www.hawaii-sbdc.org/. Download the PDF file titled “The State of Small Business: Hawaii 2005”. Darryl Mleynek at (808) 974-7515 or by email at Darryl_Mleynek@hawaii-sbdc.org
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