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The Honolulu Advertiser

Posted on: Wednesday, February 9, 2005

Firms survive on risk-taking, resourcefulness

 •  How to deal with the setbacks

By Catherine E. Toth
Advertiser Staff Writer

Angie Runyan loves her job. On most days.

When demand for his company's guidebooks fell after the Sept. 11 attacks, Don Ojiri created an events calendar to lure visitors back to the Islands. The calendars helped keep his company going.

Deborah Booker • The Honolulu Advertiser

Being the owner of Cha Cha Cha Salsaria in Hawai'i Kai hasn't been easy. In addition to rising workers' compensation costs, labor issues and banks not approving her loan requests, Runyan had to deal with a landlord who raised her rent — from $3.10 per square foot to $3.50 — just when she was getting out of debt.

"That was so frustrating," said Runyan, who opened the restaurant 11 years ago. "I had been in one location for 10 years, and I finally could see the light at the end of the tunnel ... It seemed like no matter how much more I did, everybody wanted more."

Frustrated, she started to look elsewhere. A neighboring shopping center offered her a better location at a cheaper per-square-foot cost.

The caveat?

This location was triple the size of her current one, making the total rent higher. And it needed extensive renovation, which would cost money. And that's something Runyan didn't have.

But after much consideration, she decided to take the offer, hoping the move into a new, bigger location would pay off.

And so far it has.

The restaurant, now located in the Hawai'i Kai Shopping Center, has brought in more customers. She increased her staff from 12 to 26. And the new space allows her to have live music on the weekends.

"I'm in debt all over again because of the new location, but I don't think it will take me (as long) to get out of it," said Runyan, who used credit cards, her personal line of credit and money borrowed from Mom to pay for the move. "Hopefully we're done bleeding, and it's all going to balance out."

Small businesses are often hit with major setbacks that can shut down stores, force layoffs or send owners spiraling into debt.

But many survive, finding creative ways to combat persistent competition, economic downturns and financial setbacks.

The Obun Hawaii Group, a print and communications company that specializes in tourism, had focused most of their attention on the Japanese market, printing guidebooks for major travel agents such as Jalpak and Kintetsu.

But after the Sept. 11 terrorist attacks, demand for those guidebooks plummeted.

"That was our bread-and-butter," said president Don Ojiri. "But then the Japanese traveler numbers went down, as everybody knows, and that hasn't recovered yet."

Ojiri had to think quickly. He heard in news reports that then-Gov. Ben Cayetano was heading to Japan to boost tourism to Hawai'i. He decided to create an events calendar, filled with photos and information about every festival, sporting event and parade in the Islands to lure visitors back. The calendar promoted everything from the NFL Pro Bowl to the Vans Triple Crown of Surfing to the Merrie Monarch Festival.

Cayetano took 1,000 calendars with him to Japan, where they were a hit with travel-related businesses.

Soon, Obun Hawaii received orders for more. That year the company produced and sold more than 150,000 calendars.

"That was the product that would bring people back to Hawai'i," Ojiri said. "That kept us really going despite the real drastic downturn."

Since then, Obun Hawaii has printed other calendars — one specifically touting hula festivals, which didn't do as well — and other publications for local organizations and cultural festivals. Now only about half of its clients are based in Japan.

"We're happy about that," Ojiri said. "We have a more balanced customer base."

Fine-art photographer Kim Taylor Reece didn't have to worry about his customer base, which is mostly local and military.

But he does know the impact of rejection.

Despite his success as an award-winning photographer, Reece has been shot down by the Hawai'i State Foundation of Culture and the Arts for its Art in Public Places program.

"It became a personal motivator for me," said Reece, who's best known for his depiction of hula kahiko. "At first I was confused and it hurt my feelings. But that kind of turned into a drive. It became a challenge for me to actually do better without (their approval)."

He got his first rejection in 1989 — the same year he published his first book, which critics said was too big and too expensive. It became a best seller. The first edition of that book is now worth $200 — four times its original price.

Last year Reece again submitted his work for the Art in Public Places program. And was rejected. "It wasn't 'cultural' enough," he said with a laugh.

That year, however, was one of Reece's best financially. His business soared, with sales nearly

70 percent higher than the year prior. He boasted successful art shows on the West Coast and in Japan. He began a partnership with Hilo Hattie to create aloha shirts and other products and with DBI Hawaii to make affordable bronze sculptures using his images. And he was honored by Long Beach City College, where he studied, of all things, advertising.

"Last year was probably one of our best years for business," Reece said.

Instead of wallowing in rejection, Reece re-focused on the business aspect of his work. He developed partnerships with other companies, allowing them to license his images to create retail products.

"It seems like a better way for me, to expand without killing myself," he said.

Reece isn't going to stop submitting his work for consideration in the Art in Public Places program. But rejection doesn't get him down anymore.

"You have to hang in there," he said. "And sometimes you have to just get used to rejection."

Reach Catherine E. Toth at ctoth@honoluluadvertiser.com or 535-8103.

• • •

How to deal with the setbacks

Running a small business, whether a retail store or restaurant, comes with setbacks that can send owners spiraling. Here are some tips from been-there, done-that owners on how to combat the downturns:

Don't take it personally: Photographer Kim Taylor Reece may have won dozens of awards for his work, but he hasn't yet been accepted into the state's Art in Public Places program. But he doesn't take it personally.

Research your market well: "And not just read about it," said Carol Pregill, president of Retail Merchants of Hawai'i, "but actually go and see what's happening. They call it 'research by walking.' You can read all the predictions and surveys, but the reality is really what's going on."

Refocus your market: Don Ojiri, president of the Obun Hawaii Group, had to develop other markets after the Sept. 11 attacks hurt his business with Japan-based companies. He got involved in local community events, publishing commemorative books and posters. "Our community involvement kept us going," he said.

Take a risk: Angie Runyan knew moving to a new location would push her back into debt. But she also figured the risk would benefit her business in the long run.

Believe in yourself: "If you've got a good product or service, you'll know it," Reece said. "Even when times look tough or things aren't going exactly the way you want it to, something better always comes up. You have to just hang in there."