How to Forge a Lasting Business Dynasty

“Confessions of CEOs” is a series on how business owners are changing the service landscape. Today, we’re speaking with Clyde Hamai, CEO of Hamai Appliance, an appliance and mattress retailer in Maui founded in 1970. Clyde shares his secrets on how to run a family-owned business that has lasted over three generations.

Clyde Hamai, CEO of Hamai Appliance

Why Hamai Appliance?

Hamai Appliance is the only independent retailer of appliances and mattresses in Maui. My father, Lester, started this business over 50 years ago, and I joined him a couple of months later, after I graduated from the University of Hawaii. My dad’s mission was to serve the local people with the best sales and repair service.  We still follow that mission over 50 years later.  

How have you kept the business going for 50 years across 3 generations of family?

We adapt because we want to succeed, not just survive. When we first started, Sears owned about 45% of the appliance and electronics market. Now their share is in the single digits in addition to going bankrupt on the mainland. I would have never dreamed that our competitors would be the big boxes like Home Depot and Lowes.

One of the most significant changes that we’ve made is the shift away from electronics. When Panasonic, our largest electronics provider, shifted their North America strategy away from independent dealers, we had to maintain relationships with mainland distributors. It was too costly for our business. We decided to phase out electronics altogether; it was a tough choice because our customers still wanted these products. If we hadn’t, we would have been out of business like so many other local retailers. Maui had over a dozen dealers like us, but now we are the only one left.

Despite COVID, we never closed. We received PPP and leveraged our proprietary delivery logistics employees. We empowered our delivery team to postpone delivery if they suspected risks from COVID. All of our sales personnel wear masks and clean the showroom floor to ceiling daily. If anyone of our employees tests positive for COVID, we’re prepared to shut down for 14 days. We care more about our community than we do about just profits. Disease transmission is not a joke.

What is it like to run a family-owned business?

Oh [Clyde chuckles]. Working with family isn’t always easy, but it can be incredibly rewarding. It was my dad’s dream to go into business with his sons. When he left his sales job at another store, where he had worked for over 25 years to start Hamai Appliance, he had no idea his dream would come true. My brother, Glenn, retired in 2013. I’ve been able to live that same dream. It is gratifying to hand this off to the next generation. 

Is running a family-owned business harder than running one without family?

Well, only about 30% of family-owned businesses transition into the second generation, but only 12% are viable in the third generation. A lot of this is attributed to whether or not you’ve been successful at separating work life with home life. I try very hard to keep work at the store and not take it home. I’ve discovered that it is not healthy to let the principals’ spouses get involved in running our business if the spouses aren’t actual employees. To do otherwise often results in the exploration of many touchy subjects at the company’s detriment. 

Three areas where family-run businesses can do better include:

1. Assignment of authority and respecting each other’s roles: Two of my sons and one of my nephews are each responsible for a branch of service. Everyone has to go through the correct channels to get stuff done. No one just gets to “pass go and collect $200”.

2. Crystal-clear communication: Never assume that people are on the same page. We frequently meet as a group; anyone can call that meeting. We value each other opinions and ensure that everyone is heard.

3. Maintaining respect: We are family, and we all bring different energy, strengths and ideas which can be valuable, even if the idea isn’t immediately adopted. My sons, Bryant and Garrett, and nephew Kelii, are modernizing the company technologically with their book smarts. I deliver practical advice on how to run the company since I’ve been doing it for 50 years. 

What is it like running a business in Hawaii?

It can be tough in our kind of business because we have to pay additionally for our independent ocean freight. That’s an additional 10-12% of the cost (a substantial overhead expense for any business). We overcome this in two ways. Firstly, we offer better service to our customers for all of the products we offer. Secondly, we also belong to Nationwide Marketing Group (NMG), the largest appliance and furniture buying group in North America. They help us buy products at a major discount and provide us with numerous industry-specific educational programs.  

There can also be some discrimination from businesses on the mainland. Many can’t service Hawaii, nor are they interested in flying here to grow it because of the distance. It’s still very much a challenge.

How have you kept up reliable customer service for so long?

We are the only turn-key appliance company in Maui that will sell, deliver, install and repair an appliance. We digitally track all customers’ purchases and warranties in our system, which ultimately benefits the customer in the long run by not having to manage those details independently.  Our sales team is very knowledgeable of all the brands we sell due to our manufacturer-led training programs.  

How do you give back to the community?

My father started an initiative in the community 40 years ago because he couldn’t find a single golf tournament for women. He decided to convince Panasonic to sponsor a friendly golf competition on Maui specifically for women. Every year until 2017, we’ve supplied the prizes for the Lester Hamai Memorial Golf Tournament while the participants paid the entrance fees. We donated the net proceeds to various Maui charities totalling over $90,000. We’re so pleased that the women in our community enjoy themselves at these events. Several years later, well after we had started the initiative, we realized that women are typically the chief decision-makers when it comes to appliance and mattress purchases, much like most other essential decisions in life. It’s worked out well both for the company and the community at large. The more we give, the more we receive.

Another dear initiative to our hearts includes the No Child Hungry (NCH) group. At our semi-annual Nationwide meeting, we helped pack meals for NCH. Nationwide has been supporting them for many years; they’ve packed and distributed over 1,000,000 meals and thousands of mattresses to disaster-fraught countries like Haiti. For our 50th anniversary celebration last year, we executed the program here in Hawaii to directly give back to our local community. We packed over 10,000 meals and distributed them to local organizations. We’re really excited about this program and looking forward to doing more in the future. 

What’s next for Hamai Appliance?

That’s up to my three boys. I’ve challenged them to grow our business.  I often tell them that when your name is on the door, you have to try harder. Maybe they’ll open up another store on Maui or one of the other islands.  We plan to be here for another 50 years. 

Hamai Appliance is a preferred partner on Beaze.

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