HONOLULU (KHON2) — Hawaiʻi has long been celebrated for its entrepreneurial spirit, with small businesses playing a vital role in the state’s economy. However, recent data indicated that starting a business in the Aloha State comes with significant challenges.
According to a 2025 LendingTree analysis of U.S. Bureau of Labor Statistics (BLS) data, Hawaiʻi has one of the highest first-year business failure rate in the nation, with 25.4% of new businesses closing within their first year.
Here’s what the study reported.
Top 10 insights into small business failures in Hawaiʻi
1. Fourth highest first-year failure rate in the U.S. : With a failure rate of 25.4%, Hawaiʻi faces notable challenges for small businesses with a one-year failure rate that’s above the national average of 21.5%…