Categorized | Business

Hawaii gets an ‘F’ for business climate

MEDIA RELEASE, in partnership with the Ewing Marion Kauffman Foundation, released new data showing that Idaho, Texas, Oklahoma and Utah all earned A+’s for their friendliness towards small businesses.

In contrast, small business owners gave California, Hawaii, Vermont, and Rhode Island an F, while New York narrowly avoided this lowest category with a D grade.

Top performing cities included Oklahoma City, Dallas-Ft. Worth and San Antonio.

There are a lot of “business climate rankings,” but there aren’t any that draw upon considerable data from small business owners themselves. The Small Business Survey is the only survey to draw data from an extensive, nationwide universe of job creators and entrepreneurs themselves in order to investigate the best places in the country to do business. surveyed 6,022 small businesses across the United States. The survey asked questions about the friendliness of states towards small business and about small business finances in order to measure states and cities along 21 metrics.

“Six thousand small business owners have told an unusually nuanced story about what they value in their local government,” said Sander Daniels, co-founder of “Although Texas and Idaho clearly come out on top as the nation’s friendliest states towards small business, entrepreneurs value a lot more than just low tax rates. Easy-to-understand licensing regulations and well-publicized training programs are critical tools necessary to support small business.”

Some of the survey’s key findings include:

* Texas had three of the top five cities (Dallas-Fort Worth, San Antonio and Austin), while California was home to the bottom three (Los Angeles, San Diego and Sacramento).

* Small businesses said licensing requirements were nearly twice as important as tax rates in determining overall business-friendliness.

* An important predictor of small business friendliness was whether small business owners are aware of the state or local government offering training programs for small businesses.

“Asking entrepreneurs to rank state friendliness to their businesses is a powerful resource for helping policymakers understand the needs of business owners and for helping aspiring founders understand the full dimensions of their business environment,” said Dane Stangler, director of research at the Kauffman Foundation.

Hawaii Highlights

Hawaii ranks as the third-worst in the nation for overall small business friendliness – earning the state an F overall, just barely beating Rhode Island and Vermont as the nation’s worst states for doing business. Small businesses rated Hawaii as the second-most expensive state in the country for hiring a new employee and as having the second-most burdensome regulations nationwide.

Some of the key findings for Hawaii include:

* The cost of doing business is high in Hawaii, but Hawaii ranks poorly even for those metrics not associated with a high cost of living. For example, Hawaii earned a ‘D’ grade – fifth-worst nationwide – for the publicity of its training programs for small businesses.

* Women-owned small businesses in Hawaii felt significantly less supported by the state than their male counterparts. Female entrepreneurs were 22 percent less likely than male entrepreneurs to rate Idaho as supportive or very supportive of small business.

Hawaii Grades

The full results can be seen at

One Response to “Hawaii gets an ‘F’ for business climate”

  1. Valerie Koenig says:

    In some respects, our government services have improved. DCCA in particular has done a lot to improve in recent years, both online and on the phone. The Business Action Center is an excellent outlet for new business services. And the SBDC network boosted its Honolulu office from 1 consultant to 5 in the last year or so.

    It is true that the best services and programs (like training fund and the Business Research Library) are also the best kept secrets and the very needy public is often ignorant of the help that is available.


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