Shark Tank's Robert Herjavec on How Small Business Owners Can Survive COVID

Shark Tank star Robert Herjavec. Patrick Ecclesine/Walt Disney Television/Getty

The COVID-19 pandemic has obviously hit a lot of businesses hard. But arguably no one more so than the owners of small businesses. To get some thoughts—and some help—I turned to Robert Herjavec, author, entrepreneur and one of the stars of ABC's Shark Tank, which is now in its 12th season.

The recent interview with Herjavec is part of Better, Newsweek's series on LinkedIn Live (Thursdays, 9 a.m. ET/noon PT), where I talk with authors, business leaders and other thinkers to help us learn how to become a little bit better at what we do. And there's no one better than Herjavec, founder and CEO of Herjavec Group, a global cybersecurity firm, and writer of You Don't Have to Be a Shark, to help us get through these troubled times—and beyond.

Here are some insights and advice from Herjavec about how small business owners can survive the pandemic (excerpts have been edited for clarity):

Have a Clear Sense of Reality

"When COVID first hit, there was a lot of, 'Oh, we're going to get through this. Don't lay anybody off. Don't cut costs,' blah, blah, blah. I think that's dangerous. You've got to assess your personal situation in your business.

I know even for us, we didn't know what was going to happen. We didn't know if our customers were going to go away, how things were going to be affected. So I actually had my CFO make a black swan forecast, which was no new customers, none of our existing customers paying us, how long could we survive? And once I had that, I was able to come back from the edge.

But I think there's no time to have a false sense of optimism. I mean, it also doesn't mean be super negative, just be realistic."

Talk Your Employees Off the Ledge

"My employees were all scared, like everybody else. And they all called. We had a big hands-on call with everybody and they said, 'What should we do first?'

The first piece of advice I gave our whole company was, I want you to get off this call, I want you to pick up the phone and call a customer, because those people are scared. I know you're scared, but those people are scared. Just reach out.

Even though we're all virtual these days, I think that human contact is actually at a premium. I think if we've learned anything during COVID, it is that we are highly interconnected social creatures, and you've got to continue to do that."

Keep Your Eye on the Short and Long Term

"You've got to have a long-term vision and you have to try to build something sustainable for the long-term. Most people though, when I tell them that, don't understand.

What they think that means is use the long-term as an excuse for short-term failure. And I'm like, no, no, no, no, no, no, no, no, no. Just because you have a long-term vision doesn't excuse you from having a monthly target and a quarterly target and an annual target. So have a long-term vision, but expect short-term performance. There is no excuse, especially during COVID or even post-COVID, for lack of performance.

When I'm buying a business and I sit down with the owner, one of the questions I ask is, 'Tell me about your goals.' And they usually go into these really long-term goals. And then I pivot and I say, 'Well, tell me your target for next year.' What I want to hear is a very specific number with very specific tangible targets. What I don't want to hear is, 'Well, we'll just do the best we can. You know what, we'll do the best we can.' And in my mind, I'm like, 'Oh yeah, ix-nay. That person is not a realist.'

A person wearing a protective mask stands outside of a closing business in New York City. Noam Galai/Getty

Know When to Give Up

"When you run out of money, [it may be time to close the business.] It really depends on your personal situation. The reality of life is you don't have unlimited time. Performance is not measured over unlimited amounts of time. A football game has quarters.

If you have unlimited funds and your parents are super wealthy and they're going to keep writing checks and you want to be the best sushi restaurant in California and you've been in business for five years and you have no sales, hallelujah, keep going if you're passionate about it. But I think you've got to measure it against reality.

For me, every business I started, I always kind of had this timeframe: How long can I go until it really begins to impact my family and becomes dangerous? Because I love my business, but I love my family more."

Understand the New Normal

"Some things will go back to as they've always been, but some things, have changed forever.

The first thing that changed forever is business travel. The idea of going to see a customer I've never met to pitch them on me or my product for the first time is gone. This concept of, well, hey, I happen to be in Chicago. Let me pop in and tell you about our company. That's gone. Think about the time waste for me to go and pitch you my business when I could have done it over Zoom. So that's gone.

The idea of going out to take an existing customer for dinner or lunch to build those relationships, I think that continues because we're social beings and we want to continue to do that.

The speed of business has accelerated forever. Things move fast. People are not patient. You know why we're not patient? Because we're all in front of a computer all day. If I email somebody at four o'clock, I expect them to answer me by 4:01. If they answer me at, like, 5:00, I'm like, 'Were you not home? Where were you? You have nowhere to go. Answer my email.' I think that changes.

But the big change is the digital acceleration. In the past, it was like, 'We have a retail strategy and we have a digital strategy.' There is no retail strategy. The retail strategy is simply there to support your digital strategy, as opposed to vice versa. So the acceleration of digital, and then obviously everything that goes around that, remote access, cybersecurity, all those kind of things."

Always Invest in the Entrepreneur

On Shark Tank, "The average pitch is over an hour and it gets edited into seven minutes that people see at home. Here's the funny thing: 50 percent of the time we've made up our mind in the first couple of minutes.

This is the thing that people who haven't started a business don't realize. They spend years trying to find and perfect the perfect product, but in business it's about execution. What you start doing often in business isn't what you end up doing. Your business changes. There's ebb, there's flow, and you want an entrepreneur that can adapt and pivot and bring on a great team to support them.

After we learn about the business, it's knowing your numbers. Numbers are the language of business. If you can't speak business, you're going to really struggle. [On Shark Tank, we'll ask], 'What are your cost of goods? What's your margin on that product?' And people are like, 'Oh, I don't know that, but I'm going to hire somebody to help me with that.' And we're like, 'Yeah, stay away from that person with a 10-foot pole.'

You can't outsource responsibility when you're starting out. Yes, you can hire a CFO when you get really big, but when you're starting out, man, you've got to know that, to the last dollar."

You Don't Have to Like Who You Hire

"One of my old bosses gave me this horrible piece of advice. He said, 'Never hire somebody you wouldn't want to sit next to on an intercontinental flight.' For some reason, that was in my head. So I'd be interviewing somebody and I'd say, 'Do I like that person? Can I hang out with them?'

Now, I've realized it doesn't matter. A team is not a group of people that necessarily like each other. A high performing team is a group of people that respect each other. I don't need to like you. We don't need to go out for dinner. I don't need to meet your family. I don't need to meet your dog. I have to respect you.

So the first thing I look for is, do you fit in our culture? In our company, we're a highly competitive, highly motivated, highly driven culture. So if you don't want to wake up every day and do a little bit better than the day before, and if our growth doesn't motivate you, you're probably not going to fit with us because our 350 people are deeply passionate about cybersecurity. We look for the cultural fit above everything."

Desperation Is a Powerful Motivator—At First

"You know what drove me when I started my business? Paying my mortgage, that's what drove me. And sometimes these entrepreneurs come in and they say, 'I started my business. I had this real vision and we were going to do this and I was deeply passionate about it,' and I'm sure there are people like that, but I've got to tell you, most people that start a business, it's fear and need.

My need was somebody fired me. I couldn't get a job in time to make my next mortgage payment. So when I woke up every day, I'm like, "If I don't sell something today, I can't pay my mortgage." So that was a very clear cause and effect. But having said that, that only takes you so far. If you start a business to make a buck, you'll only make a few bucks. If you start a business to make a buck, but you find your greatness and your purpose, you'll make far more bucks along the way.

The funny thing is when COVID started, I was so afraid. All that uncertainty. I went right back to, if I don't wake up today, people are going to know I'm scared. They're going to get scared and our business could fail. And I think failure is a really big motivator."

Make Time for Reflection

"One of the great things about being an entrepreneur is not that you work less. That's another thing all my friends who've never started a business always say, 'Oh, I wish I could start my own business so I could work on my own schedule." And I'm like, 'That's such crap.' You work at your customer's schedule.

But one of the things that people don't do enough is spend the time to think. Business is a contact sport, and when the game starts, it's on. So what I've had to do is find those moments of stillness in my day in order to be able to do that. And for me, it's waking up early. So I wake up every day at 4:30 a.m. The first half hour is a cup of coffee and just thinking. I have a pad of paper in front of me and for that first half hour, I just write down the things I need to accomplish today. Because I've learned that once the day begins and the fight starts, I'm not thinking about what I'm going to accomplish. I'm just reacting."

Dorie Clark, author of Entrepreneurial You and Duke University Fuqua School of Business professor, hosts Newsweek's weekly interview series, Better, on Thursdays at 12 p.m. ET/9 a.m. PT. Learn more and download her free Stand Out self-assessment.

Dorie Clark, Robert Herjavec
Dorie Clark interview with Robert Herjavec, Panelist on ABC's Shark Tank