STUDY: Hawai‘i Among Worst States to Start a Business

July 13, 2019, 12:00 PM HST (Updated July 17, 2019, 3:39 PM)

Starting a new business can be challenging.  Roughly 20% of all startups fail within the first year, according to the U.S. Bureau of Labor Statistics, and half close down within the first five years.

Launching a new business venture in Hawai‘i can be particularly challenging, according to a new report issued by the personal finance website WalletHub. According to the study, entitled 2019’s Best & Worst States to Start a Business, Hawai‘i ranks 47th in the nation—1st being the best state and 50th being the worst to launch a new business.

The conditions cited by WalletHub that determine a favorable business environment include: access to cash, skilled workers and affordable commercial real estate. These factors help new startups get off the ground and sustain themselves over the long term.

Hawai‘i’s low ranking is due largely to the high cost of living in the Aloha State, as well as a shortage of skilled labor, according to the report. Other contributing factors include a high cost of labor and lack of diversity in industry. Commercial office spaces also tend to cost more to rent in Hawai‘i.


The WalletHub report ranked Hawai‘i accordingly for starting a business compared with the other 49 U.S. states:

  • 35th – Average growth in number of small businesses
  • 38th – Office-space affordability
  • 47th – Labor costs
  • 42nd – Availability of human capital
  • 18th – Average length of work week (in hours)
  • 48th – Cost of living
  • 41st – Industry variety

Graphic courtesy of WalletHub.

Source: WalletHub


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