Bad weather ahead

During the past year, and especially the past three months, we have seen a lot of media attention focusing on both the national and state economy.

Whatever the unexpected external factors that affect our economy — the price of energy, the mortgage crisis, the slow growth on the Mainland and in China, India and Southeast Asia — Kaua‘i’s businesses sooner than later are impacted via jobs, the costs of living and doing business, and in overall quality of life. Unexpected internal factors such as the recent airline closures add another layer that’s oftentimes too close to home for our neighbors, family members, coworkers and businesses.

At the Kaua‘i Chamber of Commerce Small Business Exposition, Jayne Sawyer, team leader of the U.S. Small Business Administration’s Hawai‘i Region, provided some facts and perspectives on the University of Hawai‘i economic outlook.

The initial 2008 report, issued nine months ago, predicted a gradual slowdown of the economy. Fast-forward to March, and the picture changed — everyone is now familiar with the headlines, and more importantly, how they’ve translated to your pocketbook.

Based on the U.S. Mainland recession, national credit market problems and even weaker Japanese economy, the forecast unexpectedly changed for a dimmer picture.

Visitor arrivals are down by 1.9 percent due to a weaker U.S. economy and departure of the cruise ships, higher fuel costs, stagnant Mainland jobs and income, and reduced household wealth due to the fallout in the housing market. In other words, there is less disposable income for westbound travelers from the Mainland, which impacts what’s available for spending after the primary bills are paid.

Real income growth is projected at only 0.3 percent, with zero growth in payroll jobs and 4 percent contraction in employment.

Is there anything positive to all this negative news?

Well, the construction industry is doing better here than in most of the country, and the military and government presence and the limited exposure to the sub-prime mortgage crisis has a stabilizing effect.

So, what about Kaua‘i?

Kaua’i’s small businesses generally have lower overhead or fixed costs and flexibility in operations and even lower personnel costs.

What can business do if they are not already positioned to deal with the current economic situation? The U.S. Small Business Administration advises the following:

• Assess your current capacity. Know your financial position, fixed costs and what your core business is about.

• Know your market, who are your current customers, your repeat clients and know how are your reaching them.

The Chamber’s theme for the 2008 Small Business Expo was “Economic Gardening.” Keeping that in mind here are a few more tips:

• Select the right plant to thrive in the right location.

• Provide nutrients to insure a strong yield.

• Keep an eye on the weather forecast and be prepared to respond to the threats that are presented.

In other words, if your business hasn’t made the necessary changes, review your plans and update your forecasts and employment needs. Do it now and don’t rely on the same plan you have that’s worked for the past few years.

Now is the time to make the adjustment.

On May 7, the Kaua‘i Chamber of Commerce will host an e-marketing workshop. It will focus on how to use the Web for businesses as well as the benefits of owning your own Web site that’s open 24/7. If you already have an existing site, review what can be done to make it better. Visit us at ours,, for more information.

• Randy Francisco is president of the Kaua‘i Chamber of Commerce. He can be reached at


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