Consulting

By Craig T. Kojima, Star-Bulletin
Winona Chin, left, of the SBA's Business
Information and Counseling Center, helps client
Lani Kaimi. The Bishop Street center offers a
research library and business counselors.

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There’s no need
to go it alone

Fledgling entrepreneurs
can find low-cost help
throughout the state

By Peter Wagner
Star-Bulletin

Bonnie and Steve Chung took careful notes at the two-hour seminar. After struggling on their own to find a market for their shortbread cookies, they needed help.

"We didn't really have a solid foundation," said Bonnie, whose business -- Pieces of Paradise -- was put together with little more than good intentions and a great recipe. "We need to make a business plan."

The Chungs were in a group of fledgling entrepreneurs recently at the Small Business Development Center on Bishop Street, a national organization supported by the U.S. Small Business Administration with offices across the state.

The group included people wanting to start a travel agency, restaurant, wrapping service, bake shop, engine repair shop, greeting card manufacturer, property development firm and other ventures.

One-on-one

About 1,000 Hawaii residents used the center last year, taking advantage of its free and low-cost resources to start or improve a small business. Lacking the $5,000 to $10,000 it can cost to hire a consultant, they learned to write a business plan, research a market, find a location and secure financing.

"What we do is one-on-one business consultations, by appointment," said Laura Noda, director of the center's Oahu office. "We also do a lot with existing businesses, especially how to improve marketing and business plans."

Just down the hall are the volunteer-staffed Service Corps of Retired Executives, the Wo-men's Financial Resource Center, and an ample research library and computer laboratory complete with business software and Internet access.

"I've seen everything from airline pilots to single mothers to folks who think they can do it better than their bosses," said Brock Lawes, a professor of marketing at Chaminade University who spends several afternoons a week at the Service Corps helping newcomers or tweaking a faltering business.

But if the SBA affiliates are a bargain for the self-motivated, be prepared to roll up your sleeves. While counselors are on hand, you'll need time and energy to get through the homework. And remember, your investment will ride on the quality of your work.

Paying your way

Lawes confides it sometimes makes better sense to hire a consultant.

"If I have a lot on the line, I might be inclined to go to a professional to do it for me," he said. "And if I need a lot of financing, a well-done business plan might be necessary."

But a possible drawback of hiring someone to do the footwork for you, he noted, is alienation from your own business.

"If somebody does it for you, you don't have the sense of yourself in it," he said. "Your business is really an expression of you."

Lawes suggests you keep a close hand in the start-up process, even if you rely on a pro.

Expect to pay $100 to $200 an hour for a business consultant, who will do all the footwork and turn your idea into something that might work.

"We're very hands-on," said Kenneth Gilbert, president of Business Consulting Resources. "We actually get our hands dirty and work with them to get the business started."

The UH alternative

Another alternative is the Pacific Business Center, at the University of Hawaii College of Business Administration. Somewhere between the do-it-yourself Small Business Development Center and a pricey consultant, the UH center uses business students to draw up plans and marketing studies. The work is reviewed by faculty.

With fees of $20 an hour, the UH center can put together a business or marketing study for about $3,000 to $5,000. The program produced 50 to 60 business and marketing plans last year.

Still another option is hiring a tax expert or accountant. At Century Small Business Solutions, Inc., certified public accountant Peter Matsumoto will put together a basic package including a business plan for $500.

Whatever your route into business, most consultants agree you'll need:

Business plan: A road map for your business, it identifies markets, projects costs, revenues, and sets goals. You'll need a good one to get a loan.

Structure: Many new startups choose sole proprietorship, the simplest of legal forms. But beware personal liability if you're business falls into debt. Partnerships or corporations are more complex but protect your home and personal property from business losses.

Location: Are you near your market? Visible? Accessible?

Financing: Look beyond your initial start-up costs to include operating costs for at least a year or two. The SBA last year backed 183 loans to small businesses in Hawaii totaling $22.6 million. You've got to be turned down by a commercial bank to qualify.

Marketing: How will you advertise?

Records: A common mistake among first-timers is losing track of paperwork, or commingling revenues with profits. The result can bring chaos, and tax delinquency.

Licenses and insurance: You'll need a general excise tax license; business registration; professional and vocational licenses; federal employer's identification; unemployment insurance; worker's compensation insurance; temporary disability insurance; and prepaid health care. See the publication "Hawaii Business Regulations -- a Summary," published by the state Department of Business, Economic Development and Tourism. Or visit the department's Business Action Center, a one-stop shop for all the paperwork.

Starting points New businesses can find some valuable assistance online. Here are a few Web sites that may help. For a list of more resources, see pages 8 and 9. Small Business Development Center: http://www.hawaii-sbdc.org/ State Department of Business, Economic Development & Tourism: http://www.hawaii.gov/dbedt/index.html Internal Revenue Service: http://www.irs.ustreas.gov/ State Department of Taxation: http://www.hawaii.gov/tax/tax.html Small Business Administration: http://www.sba.gov Service Corps of Retired Executives: http://www.score.org