Robert Herjavec, Shark Tank co-host and founder of Herjavec Group, said the pandemic year had confirmed a fundamental lesson about speed as a key to success: small business owners need to act fast and make tough decisions to survive.
The pace of decision-making has accelerated in unprecedented ways during Covid-19, but Herjavec says while the U.S. economy is booming and states are lifting Covid restrictions, the decision that entrepreneurs now need to make quickly need not go back or carefully grow . It’s time to make a big bullish bet on the future. Companies that let fear linger will lose.
The “brutally realistic” thinking demanded by owners last year is a thing of the past, and the US is in a boom phase that entrepreneurs must embrace. “I’m very, very optimistic,” Herjavec told CNBC at its Small Business Playbook event on Tuesday. “I think we’ll see one of the greatest [periods of] Economic growth we’ve seen in our lives. “
More from CNBC’s Small Business Playbook
The youngest CNBC | SurveyMonkey Small Business survey for the second quarter of 2021 found an increase in confidence in small businesses, albeit a small one, and an overall sentiment that remains net negative for more than a year after Covid. More and more entrepreneurs are anticipating sales growth and recruitment is expected to increase in the hardest-hit sectors such as the food industry.
“People never believe it will get as bad as it will be and never recover quickly enough,” said Herjavec. “I can see that now. People are not ready for expansion, too conservative, not bullish enough.”
When optimism was the wrong emotion
The Shark Tank co-host may be known for his optimism and business confidence, but during the CNBC small business event, he didn’t hesitate to reveal how much fear and uncertainty he experienced during the pandemic and described his initial emotions from last February as “unbelievable fear”.
“Everyone said to me, ‘You are a’ shark ‘and you have a big business, a relatively big business, but fear held us up for about three days,” said Herjavec. He quoted the advice of his co-host Barbara Corcoran, who often says the difference between successful people and others is “not that they don’t pity themselves, but how long they allow themselves to wallow in misery”.
“I wallowed a lot for about a week. I’m a pretty tough guy and not a lot of things scare me, but the uncertainty in business can be very destructive. I wallowed for a while but then went into full action ahead . “
Robert Herjavec, CEO of the Herjavec Group
Scott Mlyn | CNBC
Herjavec’s core cybersecurity business was a winner from the pandemic as more people went online. However, he also deals with many portfolio investments as part of his “Shark Tank” deals, and he says one risk during the pandemic was portfolio deals holding onto “unfounded optimism.”
“It kills a business,” he said. “I’m a very optimistic guy. I wake up every day believing that tomorrow is going to be better than yesterday and all that stuff, but when you face a crisis, it’s about reality, not optimism. … Us told these companies, ‘Don’t expect the world to end, be prepared for the worst.’ “
Too many small businesses got into trouble during the pandemic because they were afraid to cut costs, because they were afraid to go too far. “We have seen a lot of small businesses get into trouble and say, ‘Maybe we just lay off a few … or don’t have to lay off … maybe things will come back.”
Herjavec made it clear to these business owners: “We have encouraged people to be a little more pessimistic because in a crisis nobody can help but you … When things are bad you need to be realistic optimism and we have seen a lot of small ones Companies just believe … things are getting better. “
But now he says that dealing with reality is completely different. A year after Herjavec and its CFO sat down and went through a “black swan” scenario to realistically assess how long they could survive, entrepreneurs have to be on “the very other end of the spectrum,” he says.