 Welcome to Adventures in Small Business. This is a collaborative effort by the U.S. Small Business Administration Hawaii District Office, the Hawaii Small Business Development Center, the MINK Center for Business and Leadership, as well as the Veteran Business Outreach Center of the Pacific to showcase stories of local entrepreneurs in small businesses. I'm Dennis Wong from the Hawaii Small Business Development Center. And today I'd like to welcome my guest, Dustin Denise from Texas Hawaii. Welcome, Dustin. How's it going, Dennis? Thanks a lot for having me here. Great. And thanks for coming to be a guest. You and I have, we've been to many workshops together and a lot of startups and we're businesses, they have a lot of questions as far as how to start the business, the regulatory compliance is what they need to do, what they want to stay away from not doing. And so I thought that the area of expertise in your business as the owner or co-owner of Nexus Hawaii can provide valuable information to the people that are watching this segment of program. Yeah. Yeah. Right on. Looking forward to it. Thank you, Dustin. Can you tell me a little bit about who Dustin Denise is and how you started your professional career? Okay. Well, I started in insurance, working with the Fortune 200 company here locally. We have our branch out here locally. Our insurance though that we work with was primarily business to business. So I did a lot of employee benefit stuff. With that it got me the kind of the experience of working with companies. So working directly with businesses. We worked with over a couple of thousand companies here in the state of Hawaii. And I got a chance to kind of really know the aches and the pains, see what was working and what wasn't working for certain businesses. When you are working with that many companies, that many different clients. So I had an opportunity really to take some of the best practices, I think, from some of those businesses that were doing well and be able to kind of bring some of those resources to some of other companies in Hawaii. I believe that businesses in Hawaii are really the backbone of our community. It's something that if I can help companies to grow and to thrive, then the employees that work for those companies as well grow and thrive and the community does well. So that's kind of why I started the company with Nexus Hawaii. What inspired you to start your own business? I think I was, I don't know, maybe read into it. My dad actually he owned a produce distribution company in the state of Hawaii. I'm sorry, the island of Hawaii. I'm from the big island originally. So we got a chance to work with a lot of the farmers, really small businesses who are just trying to make ends meet. And I think that that was a really great start. My mom also too owns a small daycare center. So you have that entrepreneurship going through your blood, huh? Yeah, I do. And I've seen a lot of the stresses and the struggle that my own family went through. So anything I can do to kind of provide relief, I think, was something that was great, I think, when looking at starting another business. Why don't you tell us what does Nexus Hawaii do? What kind of services do you offer? So yeah, Nexus, we do everything from your payroll to your HR. We can do entity setups. So we do, you know, whether it's going to be your LLC or S-Corp setup, we can do your, you know, all lines of insurance, workers' comp, TDI, general liability, major medical insurance. Sort of like a one-stop shop. One-stop shop, exactly. Is this cumulative of what you learned to going through all the other businesses in the past and what you've done? Did that form the idea in your mind? Correct, yes. Yeah, so I mean, you know, exactly what I said earlier is, you know, like as I got a chance to see some of the best practices and what other companies were doing right, not only on the, you know, on the HR and insurance side, but on, you know, management and leadership side as well as culture. These were all things that, you know, I love to work with businesses on and, you know, see how that business can be most successful. When are some, when your clients come to see you, especially for the first time or first few times, what is the common questions that they have regarding to seeking assistance in payroll services or HR issues or insurance? Can you give us an idea? Yeah, I mean, it's kind of all over the place because you have, you know, some businesses who are just starting up kind of in the infancy stage of their business, so they have no idea where to start. You know, so, you know, we can guide, we kind of have that conversation from the beginning of what entity should I start with, you know, what necessary requirements are they going to be needing, so, you know, workers' comp, TDI, you know, their Department of Labor number, you know, if they're going to be getting employees or not, you know, we're going to need their FEIN number, choosing a location, a website, you know, there's a lot of different conversations that we have. One of the last people I met through your, you know, through the workshop that we did, we were actually talking about what areas they wanted to put their shop in, and then talking about, you know, what the requirements would potentially be for different spaces and those types of things. That's one side of the conversation. On the other side of it, you know, you have those businesses who are a little bit more seasoned, who have, you know, they already have a payroll going, maybe they're doing it themselves off of QuickBooks. You know, they're wearing multiple hats, so they're trying to balance HR, hiring and reprimanding and firing and, you know, sourcing out their insurances and all those other things. And then, you know, they're just really looking for a way to be able to, you know, add more time back on their plate, take some time off of their plate, and really focus in on those areas of their business that they know that they need to focus in on to make it grow and to make it work. So that's a really fun conversation to have as well because we get a chance to dive deeper into it, really understand what type of goals they have and what are some of their previous challenges, and then we can, you know, try to plug some of those gaps and build some bridges. Can you give us some helpful instructions or guidance as far as businesses when they're starting out and they're hiring employees? What must they do regarding to the state and federal reporting or as far as medical insurance, temporary disability and workers' comp? Okay, so I think, you know, so, okay, so on the, to start up first off, like I mentioned, you're going to need your FEIN numbers, you need your federal identification number, you need your Department of Labor number, you'd also need your state withholding number. Those are the required kind of things you need to set up. Then on the insurance side, you would also need your workers' comp, your general, if you're going to be having a location you're probably going to get a general liability policy. You need your TDI as well. Both your workers' comp and your TDI is going to be, the way that they rate that is just going to be a percentage of your payroll. So I think a lot of businesses starting early on, they're kind of afraid, okay, I'm going to have to pay this workers' comp and this TDI insurance, but if you don't have a huge payroll, then it's, you know, it might not necessarily be as big as you're imagining it to be because it is a percentage of payroll that is being charged. That's kind of how the premium works out. One thing you're going to want to look at, too, is your major medical. So if you have full-time employees, you're going to want to, you're going to be responsible for taking care of their major medical insurance. So something like your Kaiser or HMSA or HMA or UHA. Those, for your major medical, there's only a small amount of cost that you can shift onto the employee. So the majority of that, the brunt of that cost is on the employer. So those are things that we want to work through and then talk about with that employer to really make sure that they understand it and then how can we make the best choices possible. Because you also, at the end of the day, you want to take care of your employees because your employees are the heart of that business. Those are key assets to making your business thrive. I think here in Hawaii, especially, you're like family to us, especially in a small business. That's one of the things I love about it. So you want to take care of your employees. On the other side, you know that you have minimal budget or you have a certain budget that you need to work with. So really balancing those things out, I think is a big conversation that we have a lot of times in the beginning. But I think a lot of times when you walk away from that conversation, employers feel a lot more relieved. Because they're like, oh my gosh, I didn't know all of these things. And now I do. It wasn't as bad as I thought it was going to be. And now they have a clear path to how to get to where they need to get to. Well, there's so many compliance issues, regulatory or licensing issues and all that. A lot to put together. What about when it comes to HR, human resources issues, when it comes to what they generally, common questions they ask like overtime breaks and meals, holidays, vacation at will. So yeah, I mean, overtime, overtime you're going to be looking at, you know, it's going to be weekly. So 40 or more hours per week would constitute overtime for an employer, for an employee I should say. As far as breaks and vacation and holiday, those things aren't mandatory. So they're not required by the State of Hawaii. But again, looking at the overall health of your business, the culture within your organization, those are discussions that I like to have with that employer because your budget might be limited at a certain point, but to have a conversation and say, hey, this is what our goals are. We want to be able to take care of our employees and provide them all of this vacation and all of these benefits. But if you start from the get-go and you run yourself into the ground and then now you're out of business and an employee doesn't have a job, come six months from now, then you're not doing anybody any favors. But if you can have that conversation with your employee and say, hey, we're in the start-up phase right now. This is what we're looking to get to. We're going to be able to offer you this and this later on down the line. I think that employees, sometimes they feel like you're included. They know what the end goal is and at the same time too, the business owner, they can kind of visualize where... So those are milestones or goals that is kind of like implemented through the process? Correct, yes. I see. What about... I believe this is a common question that people would ask. How do I decide whether I should do it for myself, have my own payroll, as far as HR department or... Should I outsource that? How do I decide and make those decisions? Yeah, so I mean, first off, I think to do it yourself, I think a lot of times, and that was one of the faults I think I started with when I started one of my first companies, it was doing everything myself and thinking that I was saving money. Really, I think your time is one of your biggest assets. And you want to kind of weigh out how much time it's going to take you and not only the time it's going to take you, but the time it's going to take you to learn that thing that you're going to be needing to do and then to be able to learn to do it well and then be able to do it. So there's time stacked on time. And at the same time too, so if you're looking at doing it yourself, that's one thing you want to look at is what is it going to be taking away from my business? So am I going to be taking away 10 hours from my business a week that I'm going to be able to do marketing and a marketing contract would equal this amount of future revenue from my business? Or if you're looking at bringing it in-house, am I going to be able to afford to hire someone for 50,000 or 60,000 pay benefits and have this vacation and all that other kind of stuff? Thanks for that information. You know, we're heading to a break now and there's a lot of things that we can discuss and cover coming up in the next segment. Thank you, Dustin. My name is Amy Ortega Anderson, inviting you to join us every Tuesday here on Pinoy Power Hawaii with Think Tech Hawaii. We come to your home at 12 noon every Tuesday. We invite you to listen, watch for our mission of empowerment. We aim to enrich, enlighten, educate, entertain, and we hope to empower. Again, maraming, salamat po, mabuhay, and aloha. Aloha, I'm Cynthia Sinclair. And I'm Tim Apachella. We are hosts here at Think Tech Hawaii, a digital media company serving the people of Hawaii. We provide a video platform for citizen journalists to raise public awareness in Hawaii. We are a Hawaii non-profit that depends on the generosity of its supporters to keep on going. We'd be grateful if you'd go to thinktechhawaii.com and make a donation to support us now. Thanks so much. Thank you, Dustin, for joining us today's segment. And I want to go back to that issue that we just were talking about, whether you should, how businesses decide whether they should do it on their own or whether they should contract that out as far as payroll and HR issues. Yeah, so like I was saying before, having to go out and hire somebody, figuring out what that salary is going to look like, $50,000, $60,000 a year, and then adding on benefits on top of that if your company is going to be able to afford that, or if it's more feasible to outsource that. I think a big trend nowadays has been outsourcing it because it's proven to be a lot more efficient, I think, for businesses to be able to do. Another thing, too, is that you got to worry about is maybe with that employee, that HR person maybe turn over as well, too. So say they decide to move to another company, now you have to go through the process of hiring again and searching for a new HR director, hiring and onboarding and training and everything else. So those are things that can affect the business. I think every company has their own goals and it's something that you could definitely explore more. But you just kind of want to look at those two key factors, I think, whether it's going to be time or it's going to be money. So if you're doing it yourself on the time side or if you're going to be doing it in-house, what that's going to cost you monetarily as well as your turnover issues. As you know, I work with a lot of businesses and whenever we talk about employee or human resources issue, the big concern is retention. Job retention and if you lose an employee, you have to be higher then you have to get the right employee fit and you got to go through all the expenditures of getting that person back to where the previous person was. Now as far as retention, do you know as far as nationwide or locally down here or what is the trend of outsourcing? You said that there is an increasing trend to it and is there retention? Do you know if employees are being... do they stay at the employer less time or more likely to move? Yeah, I mean, that is one of those things is that employees are, especially with millennials and this kind of this new generation that are coming up, the trend is that they're staying at companies less. They're not staying at a company as long as they used to. So that means that a company needs to be a little bit more on it in regards to attraction and retention pieces for that business. So culture has become very important, I think for retention, making sure that it's an environment that employees are feeling challenged, that they're feeling that they're needed and they're wanted and they're appreciated. On the other side of it, there's also going to be benefits. I think it's a big one. So whether it be their major medical benefits, there's also a lot of our companies that we're working with are offering different supplemental types of benefits that really doesn't cost physical dollars for that business but is able to really expand the suite of benefits for the employees. So the employees can participate with more things. We take advantage of certain tax programs as well too that allows us to reduce the taxable payroll for these businesses as well. There's kind of a win-win situation with some of the employee benefits that we've had conversations about with employers. But I think that retention piece is extremely important because one of your biggest costs is when an employee leaves having to rehire, retrain, and then integrate them back into your workforce. As a business advisor, I often come across where my clients, when they first start up a business, they try to decide what type of entity they want to become and so generally they choose a limited liability company or corporation because it basically limits the liability to them personally. But then on the other side, I find that they don't pay enough attention to following, you know, paying the taxes on time or having the internal system from an accounting to payroll that's solid in there besides generating, doing your business and dealing with the customers and you have to have the inside and outside. What type of personal liabilities do people face if they don't pay their taxes on time? Well, how does that work? So that is going to affect you definitely personally. I mean a limited liability company isn't an end-all be-all so there are things that you are personally liable for so if you aren't doing your filings and you aren't paying your taxes on time, you aren't kind of up to date with that, then you want to... I think one of the things that I also too, where we've had a lot of conversations to go back to were some of the conversations we had with our clients is that they've had issues with keeping in compliance with things and they haven't been on time with certain things so they got hit with fines and penalties and that's where as a new business you have that luxury of starting everything nice and fresh and from the right way versus having to go back and clean things up later on. That's more expensive. It's always going to cost you more money. So as much as possible, doing things the right way from the beginning and tapping into as many of those resources as possible is always a good place to start for a business. What about you personally now? When you started your own business, what resources did you have or what helped you to get off the ground and are there things that you did right and maybe some things not so right? Yeah, there's a number of things I did not so right. I think that I was very overly optimistic and I think on the time that I could devote into doing things like payroll and handling things that actually should have been handled by somebody else, whether it been outsourcing or hiring somebody else to do it internally. And it slowed the growth of my company. It definitely, you know, those were all learning experiences though. I look at everything as, you know, there's really happens for a reason. So that also too led me into the space I'm in today to be able to help other companies from, you know, kind of avoiding those obstacles. As far as advisors, it's practically impossible for us to know and do everything ourselves. And if you were to suggest or advise to a client, what are the key type of people that they should have on their team like lawyers, accountants, or what is your point of view? Yeah, definitely a good lawyer, accountant, bookkeeper, an insurance person, right? So you want an insurance broker. I think as a, you know, someone who can help guide you through, I mean, if you can get a good business consultant, I think you guys do a great job over there at the SBDC. So, you know, I think those resources are extremely important to be able to, for businesses to reach out to, you know, because you don't know what you don't know. And a lot of this stuff, they don't teach you in school. So you just, you know, got to go out to the right places to figure out where you're going to get it from. So, you know, one of the areas I love to help in, and I think that's one of the areas you love to help in as well too. Yeah, we're both business consultants. Yeah, exactly. As far as when should their HR manual or things be updated, how frequently do you suggest in those areas and as far as what attention must they do periodically in compliance? Yeah, so I mean, first off, I want to say that if you don't have an HR, like an employee handbook set up, and I run into this all the time where a lot of small businesses don't have an employee handbook set up. So it just makes it very difficult to reprimand an employee. It makes it very difficult to, you know, to do any type of employee correction as well as, you know, let alone, you know, let go of an employee as well. And it opens up a lot of liability as well for that business because you don't have any written, stated, you know, guidelines for that employee. So, you know, an employee can say, well, yeah, you know, you could say that I told you to wear non-slip shoes, but the employee, you know, says, well, I don't remember that. You didn't tell me that. And they're not wearing non-slip shoes and they get hurt, you know, now that just becomes another issue in itself. So, you know, I would look at first off setting up a good employee handbook and then part two of that is, you know, you can revisit that. We can revisit that, you know, every year or so. You know, we can look back at some of the previous challenges that have been going on. There's also things regulatory that's going on in government, locally and nationally that are challenges that are happening on a national level that we can kind of key in on and then maybe add into an employee handbook. So, things like social media, right? Social media wasn't a big issue, you know, five, ten years ago. But nowadays it's become an issue. So, you know, we've started looking at building that into, we've actually looked at, we've built that into our employee handbooks for the majority of the company we're working with. Yes, and plus different type of issues that when you're dealing with employees, you know, as far as condo, dress, as far as even in the use of, yes, and treatment of people. And you're also looking at technology too, that's another issue that, you know, in technology when it's used in the right way, it's very beneficial, but when it's used incorrectly, it can be very harmful as well. Exactly. Well, you know, we just have a few seconds left and I wanted to wrap this up by thanking you Dustin for joining our program today and information that you gave us is very valuable and I hope that this will give some important information to people when they're trying to decide, when they start up their business, or when their business grows what decisions do they make to be the most efficient Thank you for joining us. Thanks a lot. Thanks Dennis. Appreciate it.