Starting a Business in Hawaii: How to Start and Succeed

The following guide will show you how to start and run a business in Hawaii. It will also provide you an answer to the question: “What kind of business can I start in Hawaii?”

How to Start a Business in Hawaii

Step 1: Choose the Right Business Idea.

To start a business in Hawaii, your business idea is the first thing you need to get right. This will revolve around: “What kind of business can I build in Hawaii?”

This will depend on your background, what you know and who you know in Hawaii. For example, if you have an online marketing background and are good at social media, your starting point would be to set up a consulting firm and make money online.

To find the right business concept for Hawaii (i.e., which market you should target), ask yourself: “What is Hawaii missing?” This can help you zero in on a niche that will provide a gross income stream.

Step 2: Plan Your Hawaii Business.

After you have decided on your business idea, you need to put together a plan that will outline how you are going to make money in Hawaii.

This is commonly referred to as the “Startup Business Plan.” You can use a free startup business plan template to help get your plans underway.

Name Your Business.

Before you can officially start your business, you need to set up a legal entity for your Hawaii-based operation.

There are several types of businesses in Hawaii (LLC, Sole Proprietorship, and Corporation), but setting up a corporation will help protect your personal assets from any liability that may arise.

Business Name Requirements:

  • Must be unique to avoid confusion.
  • Must end in “LLC,” Your name, or a d/b/a (doing business as) name.

If you plan on doing any kind of contracting work for real estate companies, the d/b/a option would be a good choice, i.e.,

Find a Business Location.

Before you start your business in Hawaii, it is important to choose a business location. This will be the “home base” for all of your operations and paperwork that surround your business plan.

Potential customers should also be accessible, as most are likely to visit during the first meeting with you after getting their contact information from networking events and emails.

The idea is to find a centralized office that is easy for you and your clients to access. It should also be located in an area where you can find affordable commercial rent prices (ideally around $300 – $800) or get a low-cost home lease.

Conduct Market Research.

If you are just starting out a business in Hawaii, it is important to understand your target market and how they think.

There are many ways for you to go about this:

  1. Keyword Search: A good way to learn what people are searching online would be to conduct keyword research using tools like Google Adwords or Ahrefs.
  2. Social Media: Another great way to learn more about your target market is by using social media. You can start with Facebook, Twitter, and Instagram.
  3. Competitor Research: If you have a business idea that already exists in Hawaii, it would be a good idea to do competitor analysis that will help you understand any gaps in the marketplace.
  4. Reach Out: Meet up with potential clients and discuss your business with them.

Write a Business Plan.

Another important part of starting a business in Hawaii would be to write a business plan. This will outline your goals, how you plan on achieving them and what resources are needed to do so.

It is also a good idea to include information about the legal entity you set up for your business (i.e., corporation) that lists out its responsibilities and rights.

Step 3: Get Funding.

The next step in starting a business in Hawaii is to get funding. There are many ways for you to go about this:

  • Apply For A Small Business Loan: A small business loan is an excellent way to fund your new business.
  • Do An Equity Investment: If you have investors interested in getting involved with your new Hawaii business, use an equity investment agreement. It will allow them to legally invest in your startup and receive shares of business ownership over time.

Step 4: Choose a Business Structure.

Another important step in starting a business in Hawaii would be choosing the right business structure.

There are three main choices: Sole Proprietorship, LLC, and Corporation. Each of them has its own advantages and disadvantages.

  1. Sole Proprietorship: These businesses offer the least amount of protection to your personal assets. Since one person owns everything, in case of a lawsuit against your company, all of the business’s assets will be taken away.
  2. LLC: Limited Liability Company offers more protection from lawsuits compared to other business structures because it protects personal assets. All the assets are owned and managed by the business entity, but you have limited liability on what happens with those assets.
  3. Corp.: With this entity structure, you enjoy the most protection from lawsuits. The business owns all the assets and not by an individual. Protect your personal assets with these agreements.

Step 5: Register Your Hawaii Business.

The next step after starting a business in Hawaii would be to register your business. This will allow you to receive funding, open a bank account, and more.

To do this, you need to visit the Hawaii Department of Commerce and Consumer Affairs website specifically for small businesses.

NOTE: You need to register a business entity before you can apply for an Employer Identification Number (EIN) with Internal Revenue Service (IRS).

Step 6: Set up Business Banking, Credit Cards, and Accounting.

After starting a business in Hawaii, the next step would be to set up your business banking, credit cards, and accounting.

To do this, you need to start by opening a business bank account. This is also known as a corporate checking account or merchant account.

Step 7: Get Insured.

Another important step for starting a business in Hawaii would be to get insured.

There are several insurance options you can purchase:

  • Business Insurance: This will cover any property damage, injuries, or claims that may occur by your customers.
  • Personal Health Insurance Policy: It is required by law that all employees of the company be covered by health insurance.
  • Liability Insurance: Having liability insurance will cover any damage claims from employees, customers, or other people you may have done business with in the past.
  • Unemployment insurance tax and workers’ compensation insurance.

Step 8: Obtain Permits and Licenses.

The next step after starting a business in Hawaii would be to obtain the necessary permits and state licenses.

Each state requires different types of permits, business licenses, and registrations.

  1. Zoning Permit: If you are opening a new company or expanding an existing one, this will allow you to get the proper zoning permit. They can also provide you with information on how to do so.
  2. Business License in Hawaii: You will need this when starting a new business in Hawaii and if you plan on opening a professional office there. It is required by law that all businesses are properly licensed. A good thing about these online applications is that they are faster, less expensive, and more convenient than the traditional way of doing things.
  3. Business Registration: If your business will be operating on a Hawaii Island but doesn’t have its headquarters there, you will need to register for the county in which it will be located. All businesses are required by law to register with the County Clerk’s Office. Registration is usually handled by the Department of Commerce and Consumer Affairs Business Registration Division. You may need to contact your local county clerk to verify any specific state registration requirements.
  4. Health Permits, Signage Permits, Building Permits

Step 9: Hire Employees.

The last step after starting a business in Hawaii would be to hire employees.

If you do not have any employees, you do not need an EIN and can operate as a sole proprietorship.

Step 10: Define Your Brand Strategy

Now that you have started a business in Hawaii, it’s time to define your brand strategy.

Take into consideration what type of industry you will be targeting and why customers would buy from you instead of competitors.

Step 11: Build Your Business Website

Now that you have started a business in Hawaii and your brand strategy is defined, it’s time to build a website.

The most important step when building your website is to target key phrases.

Depending on your brand strategy, these are the people who would be interested in what you’re selling and visiting your site.

Promoting Your Hawaii Business Online

Online marketing is a powerful way to advertise your business.

You can use different strategies such as blogging, social media marketing, email campaigns, and online advertisements.

Pros of Starting a Business In Hawaii

  • Corporate taxes for the state are relatively low. For instance, The corporate tax rate is 1.4%. Compared to many other countries and states, it’s one of the lowest.
  • There are no personal income or capital gains taxes. However, gift and estate taxes are in place.
  • The minimum wage is lower than the national average in most counties. However, you will need to contact your local county clerk for the specifics on this.

Cons of Starting a Business In Hawaii

  • Living costs are above average compared with the rest of the country. As an example, Honolulu County had the highest overall costs of living in 2009.
  • The cost to rent or own commercial property is high. This is also true for small businesses looking to operate a storefront.
  • The state’s tax registration businesses incentives are poor when compared to other states and countries, which makes starting a business cost more than it should be.

The average cost to start a business in Hawaii state is $2200.

What is an Excise Tax?

A general excise tax is a special kind of tax that can be paid by a business in the state of Hawaii. This type of tax falls under the jurisdiction of the Department of Finance and often has general excise tax licenses, registrations, and permits for businesses to acquire.


Hawaii is a wonderful place to live, but it’s also one of the most expensive places in the country. This means that if you’re starting a business and don’t have a lot of money saved up, you could be putting your financial future at risk by operating here.

This guide has the goal of giving anyone who wanted to form a business in Hawaii the information they would need to operate a successful enterprise.

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