Posted at 11:30 a.m., Wednesday, April 11, 2001

Hawai'i business owners upbeat

By Glenn Scott
Advertiser Staff Writer

A survey of Hawai'i small businesses shows most owners and managers are cautiously optimistic about growth of their operations, even as they expect the state economy to level out.

Those findings are from a new report by the Small Business Development Center Network, a training partnership run by the University of Hawai'i at Hilo and U.S. Small Business Administration that summarizes results of a telephone survey of 500 Hawai'i small businesses conducted by Market Trends Pacific Inc. from Jan. 17 to Feb. 14 — before many corporations issued reports of lowered earnings expectations for the first quarter.

The Hawai'i survey found that 58 percent of owners and managers expect company sales to rise this year. Fewer were as hopeful for the state economy, with 43.6 percent seeing the economy remaining about the same, and 11.2 percent predicting it will get worse.

The margin of error was plus or minus 4.4 percent.

Tom Lutgen, director of the network's business research library in Kihei, Maui, said the most encouraging signal was small businesses' interest in adding employees. He said almost three quarters, 73.2 percent, said they planned new hires.

That may be tough, though, since the survey also showed 43.4 percent report finding workers is "somewhat difficult," and 27.3 percent rated it "very difficult."

The report found the great majority of state businesses should be ranked as small, 96.8 percent to 97.6 percent, depending on the definition. Francine Atwell, a research analyst for the center, said the survey ranked businesses as small if their employees did not exceed 198, fewer than that used by the American Business Directory.

But she noted the median number of employees in the study was three, revealing the huge scope of what experts call microbusinesses.

Says the report: "More than 42 percent of all businesses in Hawai'i have annual sales less than $250,000. Importantly, 80.5 percent of all businesses in Hawai`i have fewer than 10 employees and 64.5 percent have fewer than 5 employees."

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On the Web: Small Business Development Center Network report: www.hawaii-sbdc.org/survey/index.htm