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POSTED: Sunday, December 28, 2008

Though these are tough times, some small Honolulu businesses - both old and new - are forging ahead. Tough times do not mean giving up, they say, but buckling down, cutting costs, devising new strategies and still focusing on how to improve the quality of services and products they provide.

They have goals, visions and persistence.

And they are not afraid of the challenges that lie ahead next year, as the cost of doing business continues to rise and consumer confidence continues to erode in the face of an economic recession.

Local economists have predicted the horizon won't get any better until at least 2010, at best. Unemployment continues to climb as the year comes to a close, as well as job cuts and layoffs.

Visitor numbers plunged in November, resulting in the state's worst 11-month drop since 2001, and may even surpass the year of the Sept. 11 tragedy.

Several businesses have recently succumbed to the economy - among them Koko Cabana and Koko Head Triathlon at Koko Marina Center, The Place at Ward Warehouse and KB Toys, which filed for bankruptcy and is liquidating its four stores in Hawaii.

But at least three small businesses, profiled here in the Star-Bulletin, are planning to ride out the storm, with a spirit of toughness and perseverance.

 

Cherry fu * girls who surf

Regardless of the state of the economy, Cherry Fu, owner of Girls Who Surf, is pursuing her dream.

Fu, 28 and a Harvard economics graduate, has been hooked on surfing since she herself took her first lesson in Hawaii six years ago. Now she's focused on sharing that passion.

She officially started the business in April 2005 and says today that it is still a growing company.

“;It all depends on how you see it,”; she said of the economy. “;We're always grateful for anybody that calls, whether it's 10 or 20 people.”;

In this down economy, Girls Who Surf is narrowing in on target markets, including kamaaina, sports groups, the military, families, and surfers seeking more than a one-time lesson.

Girls Who Surf is also expanding its offerings to include bundled lessons - whether it be a five-lesson or 10-lesson program, Also, there will be a weekly yearlong program for surfers, much as you would take piano or violin lessons to achieve certain goals.

Also, the company will begin marketing lessons for boys, who always have been welcome, by launching a “;surfer boys”; brand. Girls Who Surf currently has a staff of five instructors, both male and female.

The Honolulu-based company recently had to make some adjustments due to slower times, but Fu says her focus is still on providing a good service.

“;There are changes going on in the nation and world, and they do affect us,”; she said. “;But we're still committed to providing the best in terms of quality and service - in good times and bad - and hopefully it comes through.”;

She said the worst part is the unpredictability.

“;I don't know if (the number of) customers (is) going to go from 5 to 21/2 or to 1 or 3,”; she said. “;We just take it one step at a time.”;

The company tries to offer competitive prices, and will not be increasing them next year, even with tough times. Visitors pay $90 for a two-hour lesson, Kamaaina pay $75. Every month, there also are special kamaaina clinics for just $60.

The lessons are at locations around Oahu, including Ala Moana Beach Park and Kalaeloa. Girls Who Surf also sponsors contests.

For those gearing up for a competition, weekly lessons can be taken for $240 a month for a minimum of two-and-a-half months.

“;We want to help them achieve a level where they would be comfortable competing in a surf contest,”; she said. “;Competing in a surf contest is a big anxiety for a lot of people, like going on stage with your violin to perform for the first time.”;

Marketing is important, according to Fu, but in a down economy, the company has to be careful to only spend dollars that yield returns. The Web site, www. girlswhosurf.com, has brought in some business, and the logo is catchy.

Fu has also found it helpful to have partnerships with Expedia, and JTB, which she plans to activate next year. But the company doesn't have as big of a budget for marketing as larger businesses, so it also relies extensively on community marketing.

That means networking at professional events, working with the community, and generating word-of-mouth referrals.

Relationships are key, she said. Slower times mean there's more time to cultivate those relationships.

Fu's goal is to provide a good enough service that people start recommending Girls Who Surf, much as they would Leonard's malassadas or Matsumoto's shave ice.

Fu says she's not tracking monthly visitor statistics to the tee because she has no control over them. Instead, she's focused on making improvements.

The bright spot?

“;I have a great staff and community that supports us,”; she said.

 

Wally Amos * Chip & Cookie

Ask cookie entrepreneur Wally Amos, 72, about the economy and he'll tell you he's not dwelling on it.

“;First of all, I don't think about tough times,”; said Amos. “;What I focus on is ways I can grow my business. The reality is it doesn't matter what the times are - you still have to focus on ways to run your business efficiently, look for new areas of income and new ways to promote it.”;

Amos, who owns the Chip & Cookie shop in Kailua and in September just opened a second one at the Royal Hawaiian Center in Waikiki, says he still plans to persevere during tough times.

The Waikiki shop is in a tough spot, since it is on the second floor behind the Apple store stockroom, and hidden from view for those just walking by the center on Kalakaua Avenue.

Even though some people know he's at the center, they may get lost trying to find the store.

But he's not sitting back.

“;I'm not just sitting on the second floor waiting for customers to come up,”; said Amos. “;I'm personally going to give samples to everyone in Waikiki. I'm on the street, greeting visitors, thinking of ways to remind people I'm famous Amos.”;

Even though visitor numbers are down, Amos says he's not giving up his Waikiki location, which he's invested significant dollars into building out.

“;I'm still excited because on a bad day in Waikiki, we still have access to more traffic than a good day in Kailua,”; he said. “;I am still very happy to be in Waikiki, and under no circumstances will I give up. I am meant to succeed in Waikiki.”;

There's a significant population of residents who live in Waikiki, he said, which he will target, including those that work there. Also, Waikiki is closer for some folks to drive to than Kailua - and he still gets some visitors who make a special trip because they remember his handmade cookies from 25 years ago.

“;During tough times, you have to be more aggressive,”; he said.

Amos is doing more advertising and marketing to let people know he's in Waikiki - he's targeting the local, Japanese and mainland markets. He's buying time on hotel TV channels.

Among some new ventures he's been able to secure - selling his bite-sized cookies at the Navy Exchange, on the Hawaii Superferry and on all mainland flights of Hawaiian Airlines.

He's added T-shirts, Chip & Cookie dolls and books, and aloha shirts designed by Maui-based Jams to his product line.

He is also watching payroll, rent and cookie dough, but he really has no control over electricity costs to run the oven because those are fixed costs. He will not alter his cookie dough, which he considers the key to his products' success.

Amos, after all, is a business veteran. He's been through several down cycles in the economy, he's been through bankruptcy and lost two businesses, including his Famous Amos brand.

But it hasn't stopped him.

“;If you have to close, you have to close,”; he said. “;I've closed stores before, and you have to do what you have to do but your life isn't over. Then I'll wait, and open another one or do something else.”;

Business owners have no control over the global crisis or world events, he said. The only aspect they have control over is their attitudes.

Amos says he has some hope that president-elect Barack Obama and his team will bring a renewed spirit to the nation. He said he also has faith in Americans, who have proven themselves resilient and resourceful.

He is also proud of his Read It Loud! Foundation, which he says has signed a partnership with the U.S. Library of Congress and U.S. Postal Foundation.

Amos continues to read aloud to kids at the Kailua store every Saturday afternoon, and plans to do so as well in Waikiki.

“;The single most important thing is to be positive regardless,”; he said. “;It's your attitude and belief system that will help get you through everything, including these tough times.”;

 

Phyllis Moore-Shelby * Shelby's sweets

Phyllis Moore-Shelby, owner of Shelby's Sweets bake shop, left her longtime career as a flight attendant because of 9/11.

Though she loved her first career, she realizes now it was a blessing.

If was only after she stopped flying that she realized her hobby for baking could become a business. She went on to culinary school and found a new career without knowing how the airline industry would later be battered by high fuel prices.

Since its founding in 2003, Shelby's Sweets has grown from being just a Web-based business to an established bake shop, which just opened in October at 1130 N. Nimitz Highway, Suite A-150.

“;It's something I always loved to do,”; she said. “;I was always the designated dessert provider. But I never set out to be a bake shop owner.”;

In the beginning, Shelby's Sweets were ordered mostly online. She sold her baked goods at various fairs, Chinatown's First Friday and by mail order from www. shelbyssweetshawaii.com.

Her specialties include family recipes for sweet potato, chocolate pumpkin and pecan pies (Moore-Shelby is originally from Houston), as well as lemon-blueberry scones, red-velvet cupcakes, lemon lilikoi cake, several kinds of cookies, and quick breads.

She describes her sweets as “;made with southern charm and Hawaiian flair.”;

But customers kept asking where they could find her bake shop, and that's what prompted Moore-Shelby to finally open one on Nimitz.

Since it does not have a built-in kitchen, Moore-Shelby uses the Pacific Gateway Center's “;kitchen incubator”; in Kalihi and transports the baked goods to her shop.

The idea is to offer fresh-baked goods in small tasting sizes for customers, who can also get a cup of tea and coffee with the sweets.

In January, she plans to start serving high tea - finger sandwiches, along with sweets, coffee and tea for parties of up to 15.

During tough times, Moore-Shelby's fully aware that people may forgo sweets because they are considered a luxury - not a necessity.

“;Everyone's suffering,”; she said. “;Everyone's watching their budget and these are gourmet items.”;

Her goods are baked fresh and made to order, which has on the other hand also resulted in cost savings because she doesn't waste ingredients on some 20 pies that are still sitting on the shelf.

But she will continue to offer high-quality baked goods, and try to reach out to people who will understand that paying for one from her bakery will be worth it.

Moore-Shelby is marketing, but carefully.

She is targeting only major holidays as occasions to run her ads. She is also targeting bridal fairs for her wedding cakes.

Moore-Shelby, 45, was able to launch the business with an extended line of credit, which she obtained just in time before the economy headed south, along with a loan from the U.S. Small Business Administration.

She's aware of the statistics of how few businesses actually make it. But personally, she's also thrilled.

“;Economic times are really hard, but I am fulfilling a dream,”; she said. “;As hard as it may get, I'm still getting to do something that I love to do.”;

And she's not afraid to put in the hours.

The shop is open Monday through Saturday from 8 a.m. to 5 p.m. and closed on Sundays. Moore-Shelby only has one part-time employee as help.

She's up at 6 a.m. every day, and after closing up the shop, spends several more hours baking in the incubator kitchen. Her philosophy is that: “;Food is not just to satisfy the stomach. It satisfies the soul.”;

The greatest reward, she said, is to see a customer's face light up after tasting one of her creations.

 

Small business resources

The following resources help aspiring entrepreneurs get counseling and obtain loans for starting a small business.

>> SBA Hawaii www.sba.gov/localresources/district/hi/index.html * 541-2990

» SCORE Hawaii free counseling * http://www.hawaiiscore.org * 547-2700

>> Hawaii Women's Business Center www.hwbc.org * 526-1001

Source: Star-Bulletin research