When considering whether or not to start a small business, there are several factors to keep in mind while determining where you would start your business. Fit Small Business compiled a 2018 ranking of all 50 states to determine the best states to start a small business, using the following categories:
Taxes – This includes corporate, sales, property tax, individual income, and unemployment insurance tax rates. The ranking demonstrates how much you can expect that your business would have to pay in taxes in the state ranked.
Labor Market – This category was assessed by including unemployment rates well as education levels (% of adults ages 25 to 34 who have attained at least a bachelor’s degree). This is meant to measure availability of desirable employees and the overall strength of this market in the state ranked.
Cost of Living – This includes costs of utilities, grocery, healthcare, housing, and transportation.
Quality of Life – This category is based on access to education, physical safety, and healthcare.
Cost to Start a Business – Using per capita income in the state ranked, this is meant to evaluate costs to staff your business as well as the per sq. ft/year cost to rent a commercial building.
Startup Activity – Meant to illustrate how likely new businesses are to succeed or fail in the state ranked, this represents the # and survivability of new businesses in that state.
Access to Capital – This assesses the likelihood of your business attaining startup capital by evaluating the size and # of small business loans granted and by measuring access to capital based on the availability and amount of venture capital funds.
Taking into account these factors, the survey ranked Hawaii 29th out of the 50 states, with each of the categories above ranked accordingly:
Taxes: 27 out of 50
Labor Market: 11 out of 50
Cost of Living: 50 out of 50
Quality of Life: 21 out of 50
Cost to Start a business: 24 out of 50
Startup Activity: 28 out of 50
Access to Capital: 34 out of 50
Hawaii has some of the highest labor and living costs as well as lowest availability of human capital in the country, prompting some to encourage any potential new business owner to live on the islands for a year or so first before starting a business in Hawaii. This would allow you time to observe and gain insight into the mindsets of both locals and tourists alike, get to know your potential customers, and understand the competition. It would also give you time to maybe take up surfing, consume some of the 5 billion pounds SPAM consumed by Hawaiians every year, and fall in love with Hawaii’s world-renowned coffee. Is Hawaii the right place for you and your new business?
Hawaii Department of Revenue PO Box 259 Honolulu, HI 96809 P 808-587-4242
The end of the month following the end of each calendar quarter
Annual Report Required?* *(C-Corp & LLC only)
Annual reports must be filed during the quarter that contains the registration anniversary date. For example, if you registered on February 14th, then you must file your annual report between January 1 and March 31. The due dates are March 31, June 30, September 30, and December 31.