SMALL BUSINESS NEWS _________________________________________

SMALL BUSINESS HAWAII Creating A Better Hawaii Through Private
Enterprise VOLUME 20, No. 8 * August 1995

prepared for SBH by Melvin Ah Ching Productions (macpro@lava.net)
Copyright 1995 * All rights reserved

ONLINE EDITION _______________________________________________

WIBC TO HIGHLIGHT WHITE HOUSE DELEGATES

Because the local media (other than PBN and the Sun Press) chose to
ignore a major small business event held in June - the 1995 White House
Small Business Conference - the Women In Business Committee of the U.S.
Small Business Administration with the support of Small Business
Hawaii, NFIB, and the Small Business Council of the Chamber, will
present a community forum featuring several Hawaii delegates.

The Forum will be a breakfast meeting, Wednesday, August 16, from
7:30-9 am in the Garden Lanai of the Pacific Club.

The White House Conference, the first since 1986, brought together
2,000 delegates - small business owners - from all 50 States. Hawaii
elected 15 Delegates (and alternates) last November, and they paid
their own way to Washington, D.C. June 11-15.

Bette Tatum, Hawaii National Federation of Independent Business head,
was the delegation Chair which included representatives from the
Neighbor Islands. Tim Moore of Old Lahaina Cafe & Luau (Maui), was
elected to the prestigious National Rules Committee.

The delegates, after much work, adopted a priority list of issues and
will press for Congressional reform during the next few years. SBH
supports that agenda. Yet, there was no substantive local press
coverage of this important event.

WIBC and SBH believe the community should know what was discussed,
debated, and decided in Washington. Tatum and several delegates will
present brief summaries and answer questions.

Advance paid reservations are required and include continental
breakfast, program and parking at $10 per person. Don't miss this
opportunity to get the information the local media thought you didn't
need to know. For more information, contact WIBC - Jane or Doreen - at
541-2973.

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ANOTHER "SPECIAL" LEGISLATIVE SESSION??

The 1995 State Legislature adjourned May 1 and a Special Session was
called by the Governor, June 5 - 9. Now, the Governor and his Tax
Director, want another "Special Session," in September or October.

The Tax Director, who is currently playing "let's make a deal" with tax
scofflaws, wants the Session to create a tax amnesty period AND to
rescind the remaining consumer tax credits retroactively to January 1,
1995. The Legislature is cool to the idea of another Session, sensing
the growing anger of the public, and widening the rift between the
executive and legislative branches of government.

Tax receipts are down and Hawaii continues to lead the nation in
bankruptcies. Business has received no tax, regulatory or mandated
benefit relief. No reform came to auto insurance here, the costliest in
the nation.

The contrived Hawaii "daily deficit" elicits headlines of government
"slashing" budgets, employees and public programs, yet the fact is the
bloated State Budget increased by 12% to $12 BILLION for 1995 - 96.
Taxpayers are being set up for higher taxes.

Meanwhile, the House Republicans have called for a 13-point "emergency
measures" action package to deal with the fiscal "crisis." Included are
such items as, a Hawaii-type "Grace Commission;" lower airport landing
fees; speed up State CIP expenditures; homeport the U.S.S. Missouri in
Pearl Harbor and reduce the hotel room tax.

Despite state fiscal problems, more than two-dozen lawmakers travelled
to a National Conference on State Legislators in Milwaukee in mid-July,
at a taxpayer cost of about $66,000, to learn tips to become more
effective lawmakers. How 'bout cutting gov't trips?

_______________________________________________________________

NOMINEES SOUGHT FOR SBH BOARD

SBH members are reminded that they are invited to seek election to the
Board of Directors. Three Directorships, of the current 10, are subject
to election in 1995.

The term of office for a newly-elected Director is one (1) year. A
Director then may seek re-election to a regular three (3) year term.
Directors whose term expires December 31, 1995 are Bob Sigall,
Creative-1 Marketing, and Sam Slom, SMS Consultants (current SBH
President/Executive Director). Sigall and Slom have indicated they will
stand for re-election. Earlier this year, Janet Ha'ole, Triple Check
Accounting & Tax Service, vacated her Board seat.

If you are a small business owner (or legal partner) and a current,
active member of SBH and would like to serve on the Board, please
contact the Corporate Secretary by mail or FAX (396-1726) for a
nomination packet. It will be sent to you for completion. You may also
nominate a member if you have his/her permission to do so.

Deadline for receipt of applications is August 31, 1995. The Nomination
Committee certifies nominations by October 15.

_______________________________________________________________

SMALL BUSINESS ESTATE & SUCCESSION FORUM AUGUST 29

In a continuing series of business economic and investment forums,
Small Business Hawaii will sponsor an "Estate and Succession Planning
Forum for Small Business Owners," in conjunction with member Mass
Mutual.

The program will be held from 8:45 to 11:15 am., Tuesday, August 29, in
the Conference Room of The Meeting Place Cafe, 401 Kamakee Street.

Current estimates project that in the next 20 years, $7 trillion of
small business net worth will change hands - and that $3 to $4 trillion
of that amount will be paid in taxes. For most business owners, Uncle
Sam continues to be the silent partner during the accumulation and
distribution phases of their lives.

This practical session is designed for owners of closely held
corporations. Typical succession/estate planning issues will be
identified followed by remarks on succession planning options and tools
of estate planning.

Presenters are Kathleen Bryan of Hawaiian Trust and Peter Bower of Mass
Mutual, both experienced in small business taxation and estate
planning.

Advance paid reservations are required. Coffee and refreshments will be
served. The cost is $7.50 per person for SBH members, $10 per person
for non-members. (Reserved parking is not included; estimated at $4 on
premises, or park at Ward Center and walk a few blocks!). Space is
limited! For reservations and information, contact SBH at 396-1724.

_______________________________________________________________

SMALL BUSINESS VIEWS by Sam Slom, President - Small Business Hawaii

Over the years I have gained a reputation for being a vocal critic of
government bureaucracy, taxation, corporate welfare, union compulsion
(not the right to join or form a union) and those that work to destroy
the private competitive market place. Well, I'm getting increasingly
short with those Hawaii business people in our community who privately
complain about government intrusion, but who have abdicated business
leadership. They look to government, not the private sector, and cheer
on the sidelines, choosing the Legislature or the Administration,
rather than putting forth their own effort. Many psuedo-free market
capitalists do everything possible to insure the continuation of the
power of government- Hawaii's New Plantation. Time to wake up and smell
the mangoes; Lead, or get out of the way.

Then there is Campbell Estate Trustee, author and former academician,
David Heenan, who wrote an Advertiser commentary lamenting, not a
shortage of leaders but rather, a shortage of followers. (?) I'll
continue to march to the beat of a different drummer.

When (not if) Governor Cayetano decrees major state layoffs, not
because he wants to, or has a change in his liberal heart, but because
the taxpayer well is dry, the first who should go should be people like
those in the State AG's Office of Child Support Enforcement. Headed by
Norma Doctor Sparks, Esq. , it issued a threatening, highly personal,
privacy invasive, voluminous "survey" seeking all personal, business
and financial information, including location of tattoos and birthmarks
and when, "...you had sexual relations with the child's other parent;
and the city and state in which the child was conceived." This ranks
with Librarian Bart Kane's infamous "survey" last year. Obviously,
these state "servants" have too much free time to devise these kinds of
data requests.

H4's Robert Abbett, concerned at the state's inability to know how many
employees are on its payroll (between 47,000 and 68,000), was the first
to suggest holding their paychecks and make them claim them in person,
or call "1-800-GET-PAID"

Who's da boss? The Advertiser's David Waite, quoted the HGEA union,
"public workers" work for the Guv and Mayors, not the public, and
taxpayers do not pay their salaries; taxes, fed funds and interest pay
them.

The so-called Keeaumoku "Super Block," the parcel bought by Japan's
Haseko Corp several years ago, is now to become super schlock. The
announced project at the time resulted in the eviction of more than 200
small businesses, and then the cleared acreage lay dormant for years as
financing fell through. Now they want to build a not-so-super "flea
market similar to Aloha Stadium" two blocks from Ala Moana Shopping
Center. Most small businesses thrown out years ago are no longer in
business; other small businesses need not apply. The City should not
permit condemnation of businesses for tofu-in-the-sky mega projects
until there is proof of financial capacity before any evictions.

Q: How could the City of Honolulu, supposedly "broke," come up with
$4.25 million to buy the beautiful old Willows Restaurant? Why/How is
the City going to find funds to develop the site into subsidized
elderly housing? Why not simply buy existing apartment units if the
City must do this? Q2: How is the City able to buy/use the old Canlis
Restaurant in Waikiki? The City wants to turn that beautiful prime
property into a police substation. It would move the current Kuhio
Beach station there and turn the former site into a City retail logo
shop. Q3: Why should the City & State seek to get into more business
ventures when they can't balance their budgets and do the things they
are responsible for? The real answer to all questions is: get the City
and State out of housing, land development and all other business
activities.

Earlier this year the price of all paper jumped. Hawaii businesses were
quick to pick up increases. Paper prices have moderated but we have not
seen any decreases locally.

Letter bombings, and Oklahoma City, warned businesses about unexpected
packages with no return address. That hasn't fazed Bankoh's electronic
imprinter vendor which sent out charge terminals in a plain brown box
without identification or return address.	Businesses are upset
with the constant hustle, deceptive billing, and billions in marketing
spent by long distance carriers. AT&T recently began imposing a minimum
$5 monthly line charge here on small businesses, even for dedicated
non-voice lines. (You can call and have the charges consolidated). Many
businesses have been told they can't get an 800-number now and are
given no estimated date. Member Long Distance/USA-Sprint reminds they
do not impose a minimum charge and can help arrange an 800-number for
you; call Nonie Toledo at 847-9590.

Congrats to members Pacific Business News, First Hawaiian Bank and
Coopers & Lybrand for their sponsorship of the first annual small
business Ho'oulu Awards.

Smith Corona, one of America's last major typewriter manufacturers,
filed bankruptcy in July, citing pressures from computers and word
processors. Can't we find a way to blame the Japanese for this one
too??

_______________________________________________________________

NEWS IN BRIEF Condensed from SB News, August 1995

GIFT CERTIFICATE PROCEDURES REVIEWED

The executive director of the State of Hawaii Office of Consumer
Protection, Russell Blair, has issued an advisory to small businesses
concerning non-compliance with state requirements regarding the
issuance of "gift certificates." Several guidelines must be adhered to
according to the advisory. For a complete text of the guidelines, see
the regular issue of SB NEWS or request it through e-mail (address
printed at bottom).

FUNDAMENTALS FOR BUSINESS PLANNING SEMINAR NOV. 3

Sexual harassment, occupational safety and health problems, disability
act and taxes are the topics to be covered by this one-day seminar on
Friday, November 3, at the Hawaiian Regent Hotel. This special one-day
session is especially geared towards small business owners. The
Fundamentals for Business Planning together with the 32nd Annual Hawaii
Tax Institute, a 5-day tax seminar, are both sponsored by the Chaminade
University Tax Foundation and Chaminade University of Honolulu.

For further information on both Fundamentals for Business Planning or
the 32nd Annual Hawaii Tax Institute call June or Gail at Chaminade
University Tax Foundation at 946-2966 or fax 943-3140.

TOWN HALL MEETING AUGUST 5

There will be a Town Hall Meeting, Saturday, August 5, 9-11:30 a.m.,
focusing on, "Crime and the Criminal Justice System in Hawaii," with
panelists Dan Bent, former U.S. District Attorney for Hawaii; Judge
Marie Milks, First Circuit Court; Tom Pico, Jr., former Deputy
Prosecutor, Honolulu County.

The Forum is at Kaimuki High School, 2705 Kaimuki Avenue. Admission is
free and the public is welcome. Sponsored by the Republican Party of
Hawaii, Honolulu County.

HAWAII YOUNG REPUBLICANS LOOKING FOR NEW MEMBERS

Hawaii's Young Republicans are asking for any small business owner to
become part of the growing Hawaii Republican party. Young Republican
Chairman Ethan Tweedie says "I want to create an atmosphere in Hawaii
that is business friendly by lowering taxes, privatization of
government services, school vouchers to bring back competition in our
school system and less regulation on business."

The Young Republicans hold their monthly meetings every third Tuesday
at the Richards Street YWCA in Downtown Honolulu. For more information
about Hawaii's Young Republicans call 525-6084.
_______________________________________________________________

THE COMPUTER CORNER "HAWAII's H4 LAUNCHES INTERNET RADIO HAWAII"

At 4:55 p.m. Friday, July 7, Internet Radio Hawai'iª began
"broadcasting" Hawaiian Music, Sports and local news via Real Audio
technology over the internet. This is the first time anyone in Hawaii
has produced a program exclusively for broadcast across the Internet.

The first programs were under ten minutes in length each; the first
long format program aired July 10th.

Hosted by Rabbett, a 19 year radio vet who has created Hawai'i's
biggest presence yet on the World Wide Web, with over 670 pages on line
via: http://www.hotspotshawaii.com

The program features music of Robi Kahakalau, Ka'au Crater Boys, Cyril
Pahinui, Gabby Pahinui and others, spiced with local color, weather,
surf and news.

Rabbett, most notably remembered as co-host of the Rabbett & Abbott
Show which aired on 98 Rock, back in '85 & '86, says he is thrilled to
be back on the air.

Using the call letters I.R.H., Internet Radio Hawai'iª, Rabbett's
programming will mature into a regular weekly and daily source of
Hawaiian Music, entertainment, news and sports.

For information on sponsorship or being a guest on the show, please
call Robert "Rabbett" Abbett at Hot Spots Hawai'i , 808-263-6420.

_______________________________________________________________

SMALL BUSINESS HAWAII GUEST COMMENTARIES by SBH Members
==========================================================

SMALL BUSINESS AND G.E. TAXES

By Susan Kinsler, Aloha Indoor Tanning

A short while ago Governor Cayetano was asked, "When Small Business
Owners collect tax from their customers - said tax is treated as income
and the small business owners must pay tax on the tax they collected
for the state. Tax on the tax is the law. Do you think this is fair?"
The Governor replied, "I assume you're talking about the GE Tax and
frankly I haven't given it much thought." I once again applaud Governor
Cayetano's honesty. If he doesn't know the answer to a question or in
this case - he hasn't thought about it enough to form an opinion, he
doesn't bluff his way through or make it up as he goes along. I was,
however, disappointed that a matter so important to me and every Small
Business Owner in Hawaii is not on any list of things to accomplish let
alone even been thought about.

Each and every month - month in and month out - the State receives a
tremendous amount of money from Small Business Owners. This money is in
the form of a check which is due and payable on the last day of each
month for the previous month's income. When businesses charge you tax
on the goods and services you receive the business MUST claim that tax
money (collected from you FOR the STATE) as INCOME. The tax on that
so-called "income" is due each month right along with the tax that you
paid.

If a business receives a check from a customer on the last day of the
month and then pays the mandatory Tax - what happens if the check
bounces? Nothing. The State doesn't care. That check was listed as
income and income it will remain until the next year's Federal and
State Income Taxes are due. The State keeps your money (INTEREST FREE)
for up to a year. If the postmark on the tax remittance from the
business owner is even one hour past midnight on the last day of the
month he/she is charged with interest.

If a business wanted to make the public a really fabulous offer as a
means to introduce itself or on a special occasion (and was willing to
take a loss at this event) it better think twice before doing so. The
State only cares about the money the business brought in. It doesn't
care how much it cost the business to bring it in. The business owner's
loss is the State's gain. Not many Small Business Owner's can afford to
advertise items that they'll lose money on and then pay the State on
top of it. Even if the business were to break even the State of Hawaii
has insured a loss. The public loses too. If you ever wonder why things
are very expensive in Hawaii as opposed to the mainland - don't
discount the General ExciseTax as a major reason.

What I don't understand is when young, middle aged or old entrepreneurs
are willing to risk everything to be in business, why does the State
make it so difficult? With the set-up that this State has you'd think
that they'd send thank-you notes to all small business owners for
planting the harvest that Hawaii reaps. It's one thing to force
businesses to act as collection agencies for the State - it's another
to punish them for collecting the State's money. That's what the tax on
the tax does. It punishes small business owners for being in business.

I imagine with the financial problems that Hawaii is having that it
really can't afford to lose more income. At the rate that small
business owners are closing up shop and moving elsewhere it has to
affect the State's budget. Tell me, Mr. Anzai, What will it cost the
State if ALL small businesses closed thus depriving it to ALL income
derived from them? Isn't it better to collect something as opposed to
nothing? Perhaps you could give Governor Cayetano some statistics to
think about. I'd like to see him go down in history as the Great
Emancipator of Small Business Owners by eliminating this unconscionable
law.

===============================================

INDEPENDENT CONTRACTORS - A HOT TOPIC FOR THE I.R.S.

By Pamela Gottlieb, Shared Resources

The IRS is currently "cracking down" on the misuse of the Independent
Contractor status. They are targeting especially the small and
medium-sized businesses. If the IRS decides that your Independent
Contractor is actually an employee, you could be liable for several
years of back taxes, including penalties and interest!

Following are questions that the IRS uses to determine whether someone
is a true Independent Contractor or if they are your EMPLOYEE! Use
these guidelines to ensure that your business is safe from the IRS'
scrutiny of your Independent Contractor relationships. Answer YES or NO
to each question.

1. Instructions: Is the person supervised and told when, where and how
to do their work? (Independent Contractors are given an assignment and
left to accomplish it.) 2. Training: Did you provide training to the
person in order for them to be able to perform the job? (Independent
Contractors should be fully trained already.) 3. Integral Part: Is the
work the person performs an integral part of your company's operations?
(Independent Contractors perform work in areas that are not vital to
the day to day operations.) 4. Delegation: Is the person prevented from
having someone else perform the work? (Independent Contractors may have
others perform the work.) 5. Assistants: Is the person prohibited from
hiring and supervising their own assistant(s)? (Independent Contractors
hire and pay their own assistants.) 6. Continuous Service: Does the
person work for you on a regular basis, usually every business day?
(Independent Contractors work only when there is work to be done.) 7.
Hours: Do you decide on the person's work hours? (Independent
Contractors schedule their own time.) 8. Full Time: Does the person
work full time, usually 40 hours per week, for your company?
(Independent Contractors work varied schedules, many working part
time.) 9. On Premises: Does the person perform the work at your
business location? (Independent Contractors generally have their own
office location where they complete the work.) 10. Order & Sequence: Do
you decide the order in which the work is completed? (Independent
Contractors have control over the order and sequence of completion.)
11. Reports: Do you require the person to submit regular reports?
(Independent Contractors report on progress and completion.) 12.
Payment: Is the person on an hourly, weekly or monthly basis?
(Independent Contractors are generally paid by the job or project.) 13.
Expenses: Do you pay for the person's business and travel expenses?
(Independent Contractors pay their own expenses, although many add
these items to their final invoice.) 14. Tools & Equipment: Do you
supply the person with tools, supplies or equipment? (Independent
Contractors should have their own.) 15. Investment: Does the person
lack a significant investment in tools, supplies and equipment for the
business? (Independent Contractors have an investment in their own
business.) 16. Profit or Loss: Is the person insulated from suffering a
loss in performing the work for your company? (Independent Contractors
make a profit based on income and expenses.) 17. Firms Serviced: Does
the person work only for your company? (Independent Contractors provide
their services to multiple companies.) 18. General Public: Does the
person perform work for you that they do not offer to the general
public? (Independent Contractors offer their services to the general
public.) 19. Right to Fire: Do you have the right to fire the person at
any time? (Independent Contractors generally work under contract for
specific assignments.) 20. Right to Quit: Can the person end the
relationship at any time without liability? (Independent Contractors
generally work under contract for specific assignments and must
complete them or risk legal liability.)

Some special notes that the IRS doesn't include in their "rules", but
that have been used to classify a person as an employee: Letting an
Independent Contractor use a company vehicle or paying your Independent
Contractor on the same day that you pay your employees can change the
relationship to employee/employer.

In general, an Independent Contractor should have their own Tax ID
number and provide their own health and/or Worker's Compensation
insurance. Asking the right questions and having a contract with the
person that specifies that they are an Independent Contractor can also
be to your advantage. The best defense is being prepared and using
these guidelines to protect yourself and your business!

===============================================

COULD I ASK YOU SOME QUESTIONS?

By Richard O. Rowland, CLU, CFC, Rowland & Associates

For what purpose are contractors required to be licensed by the State?

Is it because the State wants to assure their competency in order to
protect the public? Or is it to assure there are not too many of them
which could increase competition and lower your costs when you hire
one? Are you being protected or are they??

Is the State interested in increasing your costs? Or is it interested
in lowering your expenses and improving your well being? Or do the
persons who operate the Government care one way or the other?

Since these contractors are licensed does that guarantee that they do
good honest work at the best market price? In your experience do
licensed contractors do better work than unlicensed ones? Do they do
the work for less money out of your pocket?

Really and truly, why is there such a licensing requirement?

What about the requirement for state licensing of Doctors, Lawyers,
CPA's, Dentists, Insurance Agents, Engineers, Hairdressers, Securities
Salespeople, Electricians, Morticians, etc.?

Do politicians and Government bureaucrats get benefits and power by
helping each of these special groups eliminate their competition? Do
each of these professionals do such critically important work that Big
Brother must restrain trade in order to "protect" the public? If so,
what about the work that legislators do? Is that function potentially
damaging to the "public" and to each of us personally?

Why is there no "licensing" requirement for these legislators? Or for
that matter, how about State or County Department heads?

Is it because their work is not important? If their occupations are not
important why do the positions exist? If their work is really
important, why don't we impose strict licensing requirement? How many
of the current crop of legislators would pass competency, honesty and
experience hurdles?

If we don't license those official actions in government that
profoundly effect us and our offspring for generations to come, why in
the world do we let these same people impose restrictions on our free
choice in the marketplace?

Why don't you and I start asking more questions like these? Should we
demand answers? Indeed, why not; Are you a sovereign or a servant with
regard to the Government?

Is that what the founders of our nation intended? What do you think?

_______________________________________________________________

Items Printed Exclusively In The Regular Small Business News Issue

* NAMES IN THE NEWS - Small Business Hawaii members * WELCOME NEW
MEMBERS - Listing of new member businesses joining SBH * NEW SBH MEMBER
CERTIFICATE - New certificate now in mail for new and renewing members.
_______________________________________________________________

NOTE: Please send your news, awards, promotions, etc., with PHOTOGRAPHS
(if possible) to SB NEWS by the 10th of the month (copy deadline) for
the next issue.
_______________________________________________________________

About Small Business News & Small Business Hawaii

Small Business Hawaii breaks new ground as it enters the information
age with the online edition of Small Business News. This is a condensed
version of the regularly printed issue of Small Business News. The
newsletter is published monthly by Small Business Hawaii, a private,
independent, tax exempt [501 (c)(6)] statewide association of more than
3,000 business firms dedicated to improving Hawaii's business climate
and promoting, educating, and effectively representing small business
in Hawaii, while helping to improve the quality of life of all
residents of Hawaii.

Small Business Hawaii invites you to comment on anything related to
small business issues in Hawaii. Send us your comments and news of
awards, promotions, etc., with photographs (if possible) to SBH by the
10th of the month for the next issue.

Articles can be sent via regular (snail mail) to:

Small Business Hawaii Hawaii Kai Corporate Plaza 6600 Kalanianaole
Hwy., Suite 212 Honolulu, HI 96825

We also accept FAXED articles at: (808) 396-1726 (Sorry! faxed photos
not acceptable.)

You can also E-Mail your articles to macpro@lava.net All e-mail is fax
forwarded to Small Business Hawaii.

For more information about SBH call: (808) 396-1724

SMALL BUSINESS NEWS ONLINE August 1995 * Volume 20, No. 8

Editor & Publisher: Samuel M. Slom Directors: Joyce Edwards, Jean
Fukuda, Jed Gaines, Kenneth T.G. Lum, Michael R. Marsh, Bob Sigall, Sam
Slom, Jane Tatibouet & John Yanagihara. Computer Graphics: Melvin Ah
Ching ISSN #0279-8395

Small Business Hawaii's OFFICIAL Web site is at H4, Hawai`i's Super
DataHighwayª at http://www.hotspotshawaii.com./SBH.html

If you are copying this information for redistribution or web-posting,
please contact Mel at macpro@lava.net for permission. This publication
is Copyrighted 1995, Small Business Hawaii. No part of this newsletter
may be reproduced without the prior, written permission.


________________________________________

Small Business News Online compiled by:

MELVIN AH CHING PRODUCTIONS Desktop Publishing & Consulting Phone:
(808) 946-2676 Internet: macpro@lava.net or M.AHCHING1@GEnie.geis.com


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