Small business owners predict growth
By Glenn Scott
Advertiser Staff Writer
A survey of Hawai'i small businesses shows most owners figure their businesses will grow this year even if the state economy doesn't.
Owners queried in the survey, sponsored by the Small Business Development Center Network, also expressed higher expectations about increased sales this year compared with last year.
Those cautiously optimistic findings are from a new report issued this week by the network, a training partnership run by the University of Hawai'i at Hilo and U.S. Small Business Administration, with six service centers on four islands.
Network executives said the findings are important for understanding the economic outlook in a state where small businesses are the norm.
The report summarizes results of a telephone survey of 500 Hawai'i small businesses conducted by Market Trends Pacific Inc. from Jan. 17 to Feb. 14 — at a pivotal time before many publicly traded corporations issued reports of lowered earnings expectations for the first quarter.
The Hawai'i survey is based on interviews with 300 businesses on O'ahu, 80 each on Maui and the Big Island, and 40 on Kaua'i.
Researchers found that 58 percent of the 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 they had no more than 198 employees, fewer than the limit used by the American Business Directory.
But she noted the median number of employees in the study was three, revealing the frequency in Hawai'i of tiny operations that experts refer to as microbusinesses.
Says the report: "More than 42 percent of all businesses in Hawai'i have annual sales less than $250,000.ÊImportantly, 80.5 percent of all businesses in Hawai'i have fewer than 10 employees and 64.5 percent have fewer than 5 employees."
