Small business owners give Honolulu an average C grade for business friendliness, according to Thumbtack’s annual Small Business Friendliness Survey.

“Honolulu small businesses tell us there is room for improvement in local regulations, but the city does a great job with proactive outreach and support,” Jon Lieber, an economist with Thumbtack, said in a press release.

Key findings for Honolulu, which had a D grade in 2013, include:

  • an A- for training and networking programs;
  • a B- for licensing regulations;
  • a D for ease of starting a business;
  • an F for labor regulations; and
  • a B as a place business owners would encourage others to start a new business.

Bishop Square in Honolulu

Bishop Square in downtown Honolulu.

Chad Blair/Civil Beat

Nearly 18,000 U.S. small business owners responded to this year’s survey, says Thumbtack, including 37 in Honolulu.

The survey may come as a surprise to local business owners who have long complained about how hard it is for small businesses to survive here — something the new survey hints at.

“Hawaii is a very difficult state to do business in,” said one property manager in Honolulu who was not identified in the survey. “It takes a long time to process business registrations. There is a service tax that is charged on gross proceeds and does not factor in expenses.”

The property manager added, “Also, a full-time employee is anyone working more than 20 hours, and employers are required to pay almost 100% of health insurance costs.”

Thumbtack, which bills itself as “a technology-based marketplace,” gave Hawaii an overall grade of F when it surveyed states in 2013 for friendliness.

Honolulu’s C grade ranks it No. 63 out of 95 cities this year. The top cities for small-business friendliness this year were Manchester, New Hampshire; Richmond, Virginia; and Dallas.

The bottom three were Hartford, Connecticut; Albuquerque, New Mexico; and Buffalo. New York City, Los Angeles and Chicago were also among the “least friendly” cities.

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