Small business struggles highlighted in new UHERO report

from UH News, Feb 3, 2025

The University of Hawaiʻi Economic Research Organization (UHERO) has released the comprehensive report Investigating and Tackling Barriers and Needs for Small Business Success in Honolulu on February 3. The report offers critical insights into the challenges faced by small business owners and opportunities for targeted support. Funded by the City & County of Honolulu Office of Economic Revitalization, it provides a roadmap to address gaps in financial access, workforce development, market competition and technological innovation.

“This report sheds light on the resilience of our small businesses while clearly identifying areas where support is urgently needed,” said Mayor Rick Blangiardi. “With nearly 30% of businesses facing financial barriers and nearly 40% struggling to find qualified employees, the City has programs and partnerships to offer to the businesses that are the driving force behind our economy and our way of life.”

See the entire report

Key findings

Top small business needs

Support for marketing and sales (49%), financial resources (44%), and human resources (35%) emerged as the most critical areas for assistance.
Minority-owned businesses reported a significantly higher need for financial resources and networking opportunities.

Challenges in workforce development

Over 38% of businesses reported difficulty in acquiring employees, citing a lack of qualified candidates (62%) and budget constraints (39%) as key barriers.
Retention issues, including insufficient benefits and limited career development opportunities, were also highlighted.

Barriers to market access

Nearly 29% of respondents cited challenges accessing new customers, with digital marketing and online presence identified as areas needing urgent attention.

Access to financing

While 53% reported good or excellent access to financing, 29.90% faced barriers, including high interest rates (42%) and complex procedures (29%). Minority and younger business owners were disproportionately impacted.

Networking and collaboration

More than half of respondents (52%) emphasized the importance of networking, but geographical and time constraints hindered many from building connections.

“Small businesses are the backbone of Honolulu’s economy, but they face significant hurdles in accessing critical resources,” said Ruben Juarez, UHERO-HMSA Distinguished Professor and lead author of the report. “Our findings offer clear, actionable recommendations to foster growth and resilience in this vital sector.”

Recommendations

The report outlines key recommendations, including:

Enhanced financial assistance for minority and young business owners.
Centralized networking opportunities through local mixers and industry-specific events.
Improved access to digital marketing and e-commerce training.
Workforce development initiatives, including technical skills training and leadership programs.
Implementation of best practices from other cities, such as business incubators and innovation hubs.

Olin Lagon, Chair of the Economic Revitalization Commission, underscored the significance of the findings: “This report aligns with similar findings from OER’s Oʻahu Business Connector platform and outreach to small businesses. This report gives us confidence to build upon our foundation of collaborative efforts between government, the private sector, and community to invest in small businesses and, by extension, our local economy.”

The full report is available on UHERO’s website. Business owners and stakeholders are encouraged to engage with the OER through the Oʻahu Business Connector website to share feedback and learn about upcoming programs, grants, loans, and other opportunities based on these findings.

LINK: Full Report

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