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How to start a business in Hawaii in 7 steps

Nirit Braun

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how to start a business in hawaii

Starting a business can be an exciting yet nerve-wracking endeavor. Fortunately, Hawaii provides a favorable environment for entrepreneurs, with its growing economy and supportive business community.


According to a 2021 report by BoostSuite, Hawaii has the highest per capita rate of small businesses in the country, with 45 small businesses per 100 residents. This statistic highlights the entrepreneurial spirit of Hawaii's residents and the potential for success for new entrepreneurs looking to start a small business.


In this post, we'll cover seven essential steps for getting started on your entrepreneurial journey in Hawaii.



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Start a business in Hawaii in 7 steps




01. Come up with a suitable business idea


The first step to starting a business in Hawaii is to come up with a solid business idea. If you need some unique business ideas, check out the list below.


  • Tour and travel: As one of the most popular honeymoon spots and holiday destinations in the country, Hawaii is prime for businesses that enable island hopping, adventure tours and cultural experiences for Hawaii's visitors.

  • Eco-tourism: Hawaii's diverse natural resources make it a great location for eco-tourism businesses, such as eco-lodging, wildlife watching tours and other nature-based experiences.

  • Hospitality: With millions of travelers flocking to Hawaii every year, opening a vacation rental, event planning service or vacation home management business could be a fruitful venture. Within this niche, services such as cleaning businesses and plumbing services may also be in high demand and worth starting.

  • Food and drink: With a rich culinary heritage and access to fresh, local ingredients, Hawaii serves as a good backdrop for new restaurants, food trucks or catering businesses.

  • Health and wellness: Given Hawaii’s strong focus on health and wellness, you may find success opening a yoga studio or starting a gym business or spa.

  • Outdoor recreation: Hawaii's warm climate and diverse natural resources make it an ideal location for outdoor recreation businesses, such as surf and paddleboard rentals, snorkeling and scuba diving.

  • Arts and crafts: Hawaii’s locally made crafts and artisanal products pay homage to its cultural heritage. Businesses that focus on areas like jewelry making, woodworking or textiles could find a niche in Hawaii.

how to start a business in hawaii - top ten small business ideas


02. Choose your business type


Choosing the right business structure in Hawaii is important to ensure that your business, even if it's a small business or a microbusiness, complies with local regulations in order to protect your personal assets. Below are some steps to help you make the right choice.


  • Research different business structures: Hawaii offers several options, including sole proprietorship, partnership, Limited Liability Company (LLC) and corporation. Each structure has its pros and cons, so you’ll want to make sure to do your due diligence before deciding on a structure.

  • Consider the number of owners: If you plan to run the business alone, a sole proprietorship or starting an LLC may be best. If you plan to have multiple owners, a partnership or corporation may be more appropriate.

  • Evaluate liability concerns: Think about how much personal liability you’re willing to assume as a business owner. Some business structures, like sole proprietorships and general partnerships, offer little-to-no protection from personal liability, while others, like limited liability companies (LLCs) and corporations, offer greater protection.

  • Understand tax implications: Different business structures have different tax implications. For example, sole proprietorships, partnerships and LLCs are treated as pass-through entities, whereas C corporations are considered separate taxable entities and may subject you to double taxation.

  • Seek professional advice: It's always a good idea to consult a lawyer or accountant who understands Hawaii's business operation regulations and tax laws. They can help you make an informed decision and avoid potential legal or financial issues down the line. Consider working with someone like Legal Zoom to start an LLC of your own.



start a business in hawaii - business entities


03. Select the best name for your business in Hawaii


Choosing the right name for your business is important from the get-go, as your name will affect your branding, marketing and other aspects of your brand.


If you want to establish a strong connection with your target audience in Hawaii, consider choosing a business name that aligns with Hawaiian culture, such as the ones below:


  • Hilo Hula Dance Studio

  • Maui Maka'i Adventures

  • Lanai Lomi Lomi Spa

  • Honolulu Poke Bowl

  • Kona Koffee Roasters

  • Molokai Makai Clothing

  • Oahu Ohana Childcare

  • Kauai Kaimana Surf School

  • Waikiki Wahi Pana Tours


Use Wix's free business name generator to come up with even more ideas, or consult a branding expert for help developing a unique brand identity. Remember to check that your name is available, both as domain name and business name. You can check your name’s availability on the Hawaii Business Express website, plus check for any existing or pending trademarks via the United States Patent and Trademark Office (USPTO) website.



start a business in hawaii - business name - wix business name generator


04. Create a successful business plan


A business plan serves as a roadmap for your business by outlining its vision, financial plan and other important details. When creating a business plan for your Hawaii-based business, make sure to keep your plan clear, concise and realistic. Conduct extensive research into your local industry, competition and target market to ensure that your plan is based on informed assumptions and solid data. Remember to include your executive summary and your concept statement. Keep in mind that your business plan should be treated as a living document that’s reviewed and updated regularly to reflect any changes in your business.



how to start a business in hawaii - business plan contents


05. License and register your business in Hawaii


When you register your business, you’ll want to make sure to take the following steps. It’s also a good idea to consult a business attorney or accountant to ensure that you're not missing any steps and are complying with applicable laws and regulations.


  • Register your business with the Hawaii's Business Registration Division: You can register online through the Hawaii Business Express website, or by mail. The exact paperwork and fees will depend on your business structure. For example, LLCs need to file Articles of Organization (a.k.a. Form LLC-1) and pay $50 to complete registration.

  • Get a federal tax ID number: All Hawaii employers are typically required to pay federal taxes. Even if you don’t plan to hire employees, your business will likely need an EIN to open a business bank account, apply for licenses and permits, and more. You can obtain a federal employer identification number (EIN) through the IRS online, by mail or by fax.

  • Register for state taxes: Most new businesses in Hawaii must register for a General Excise Tax (GET) license with the Hawaii Department of Taxation and file periodic GET returns. You may be subject to additional taxes, depending on your industry.

  • Obtain necessary business licenses and permits: Depending on the nature of your business, you may need to get specific licenses and permits. Check the Hawaii Business Express website to determine the licenses and permits required for your business.

  • Register for insurance: Although Hawaii doesn't mandate business insurance, some types of insurance such as workers' compensation and general liability insurance are required at the federal level (if, for instance, you’re planning to hire employees). Consult an insurance agent or broker to evaluate your risks and recommend appropriate coverage. You can additionally visit the state’s Insurance Division to find insurance providers in Hawaii.



how to register a business in hawaii


06. Find funding for your business


Hawaii offers various funding options for small businesses through state agencies and programs. Some of these options include:

  • Small Business Administration (SBA) loans: The SBA provides low-interest loans to small businesses, and Hawaii has multiple SBA offices to assist you with the loan application process.

  • Grants: Various grants are available for small businesses in Hawaii. Check the state’s Department of Business, Economic Development & Tourism website for available grants.

  • Angel investors: Hawaii has a thriving startup ecosystem, and several angel investors in the state can provide funding to small businesses. Find them through networking events, online platforms or referrals.

  • Venture capitalists: Venture capitalists can provide funding to startups and early-stage businesses. You can find venture capitalists who invest in Hawaii-based businesses through online platforms, networking events or referrals.

  • Crowdfunding: Raise money for your business through crowdfunding campaigns on platforms, such as Kickstarter or Indiegogo.

  • Bank loans: You can apply for a business loan at a bank or credit union in Hawaii. Be prepared to provide a detailed business plan, financial projections and collateral to secure the loan.

  • Friends and family: Consider asking friends and family for investment in your business. However, make sure to have a clear agreement in place to avoid any potential misunderstandings.



07. Create a website for your business


If you're a Hawaii-based entrepreneur looking to expand your business, taking it online is a great way to reach potential customers and showcase your products and services. A well-crafted business website can establish credibility, build trust with customers and provide valuable information to help them make informed decisions. It can also help you get started selling via eCommerce, if you decide to.


When making your website, it's important to consider how it will stand out from competitors and be promoted to potential customers. Choose from website templates that fit your brand and customize it to your specific needs. You'll also need to select a domain name and web host to ensure your website is accessible online.



starting a business in hawaii - make a business website


Branding is an essential part of any successful business website. Consider your logo, brand colors, typography, messaging and persona to create a cohesive brand image that will resonate with your target audience. For more tips, check out our guide on how to make a business website.


Once your website is live, it's important to promote it through various marketing channels (if marketing is your passion, check out how to start a marketing business) like social media campaigns and email. By taking your Hawaii-based business online, you can expand your reach and connect with customers across the globe.



Business examples in Hawaii


Discover some Hawaiian-based businesses that have utilized Wix to get online.



Hilo Shark’s Coffee


Hilo Shark's Coffee is a coffee shop located in Hilo, Hawaii that offers high-quality coffee and tea products. The company prides itself on using locally-sourced ingredients and providing customers with an authentic taste of Hawaii. Through their Wix website, customers can browse their menu, place online orders and learn about the company's story and mission. If you're interested in starting a coffee shop, check out our guide on how to create a coffee shop business plan.



Hawaiian Palm Baskets


Hawaiian Palm Baskets is a business based in Kailua, Hawaii that creates unique hand-woven baskets using local palm fronds. These baskets are both beautiful and functional, perfect for home decor or gift-giving. With a Wix website, Hawaiian Palm Baskets is able to showcase their products, connect with customers, and offer online ordering and shipping options.



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How to start a business in Hawaii FAQ


Is it difficult to start a business in Hawaii?

Starting a business in Hawaii, like in any other state, involves various steps and considerations. The difficulty can depend on several factors, including the type of business, industry regulations and your familiarity with the local market. Here are some aspects to consider:


  • Business registration and licensing: Hawaii requires businesses to register with the Department of Commerce and Consumer Affairs (DCCA). The process involves choosing a business structure, obtaining an Employer Identification Number (EIN) from the IRS, and obtaining any necessary licenses or permits for your specific industry.

  • Local regulations: Understanding and complying with local regulations, zoning laws, and any industry-specific requirements is crucial. Hawaii, like other states, has its own set of regulations that may impact certain types of businesses.

  • Market competition: Hawaii's market, being relatively small, can be competitive. Understanding the local consumer base, market trends, and potential competition is important for success.

  • Cost of living: Hawaii has a higher cost of living compared to many other states. This can impact your personal finances as well as the costs associated with running a business, such as rent and labor.

  • Networking and relationships: Building relationships within the local business community can be important. Networking with other business owners, joining local business associations, and understanding the local culture can contribute to your success.

How much does it cost to start a business in Hawaii?

Which businesses are most profitable in Hawaii?

What types of business structures are available in Hawaii?

Are there any unique tax considerations for businesses in Hawaii?

What resources are available for small business owners in Hawaii?

Are there any grants or incentives for starting a business in Hawaii?

Are there any cultural considerations I should be aware of when doing business in Hawaii?

What are the shipping and logistics challenges for businesses in Hawaii?

How do Hawaii's environmental regulations affect new businesses?

What are some key considerations for hiring and managing employees in Hawaii?


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