How to Start a Business in Hawaii

Introduction

Starting a business in Hawaii can be a great experience, and the state offers numerous resources to help you get your venture off the ground. Whether you’re opening an online shop or brick-and-mortar store, this guide will walk you through all of the steps required for starting a business in Hawaii from choosing your company type to setting up accounting.

Choose your Company Type

Most small businesses start as sole proprietorships, and this is a good choice for beginners. If you’re thinking of incorporating, you’ll have to do some research and make some decisions that could affect your business in the long term. You can also choose to form an LLC, which offers the same protections as a corporation without all the paperwork involved in running one.

Create a Business Plan

Start by identifying your goals and creating a plan of action. What do you want from the business? A part-time income? A full-time income? Do you simply want to supplement your current job with a side hustle, or are you looking for more freedom so that you can travel and spend more time with loved ones? What does financial independence mean for you, and how do you intend to get there?

Once these questions have been answered, it’s time to write up a business plan. Your business plan should include:

• Mission statement
• Vision statement
• Goals (short-term vs long-term)

Name the Business

Think of something that is easy to remember, spell and pronounce. Try not to overuse the same word or sound in your name, but also don’t make it too complicated for people to understand what type of business you have. A good example would be “Hawaii Tropical Fruit Company,” which has the word “tropical” in the title, but also conveys what kind of fruit they sell (pineapples).

Make sure your business name isn’t already taken by another company out there! You can do this by checking on your state’s official website or just doing a Google search online with your proposed name along with phrases like “is available” or “trademarked.” Once you’re certain that no other businesses in Hawaii are using these terms as part of their brand identity (or if they do use them), then go ahead and create an LLC with these words as part of its title!

Create a Fictitious Name Filing

The first step in starting a business is to create a Fictitious Name Filing. This can be done at your local county clerk’s office and costs around $30-$50, depending on the county you live in.

What is a fictitious name? It’s simply an alternative name used by an organization instead of their real name (or “doing business as” or “dba”). If you’re starting out as an entrepreneur, chances are that you’ll want to use something other than your actual personal name for branding purposes. You don’t want customers to be confused when they see something like “John Smith” on social media posts—they might think it’s just another person with the same name.

Register for State and Federal Taxes

You’ll need to register your business with the state and federal governments. The most important taxes to register for are:

• State tax registration (for example, Hawaii Department of Taxation)
• Federal tax ID number (for example, IRS EIN)

Register for General Excise Tax

General excise tax is a tax paid on the privilege of doing business in Hawaii. It’s similar to sales tax, which is also imposed by counties and cities. If you plan to operate your business in more than one county or city, you must register for general excise taxes in each county/city where you do business. The benefit of registering for general excise taxes? You will receive an exemption from paying certain other taxes like property tax, transient accommodation tax (TAT), and state income tax on wages paid by your company.

Set up Business Accounting

Once you have set up the business, it’s time to set up accounting software. If your company is small and doesn’t have very many expenses, check out Quickbooks Online. If it’s more complex and has more than one location or employee, consider Xero or SageOne.

Make sure that you create a budget for your new business so that you can track how much money comes in and goes out when starting a business in Hawaii.

Takeaway

The State of Hawaii, like most states in the US, has robust resources to help you get started with your business. Whether you’re looking to open a restaurant or run an eCommerce store, there’s information available to help make your dream come true.

Conclusion

Starting a business can be daunting, but it’s also a rewarding experience. You get to turn your passion into something that helps other people, and job satisfaction can be priceless. If you’re ready to make that leap, then we hope this guide has given you some helpful tips on where to start.