‘Shark Tank’ co-host Robert Herjavec, Life is Good co-founder Bert Jacobs offer advice to small businesses

'Shark Tank' investor Robert Herjavec speaks with CNBC "Power Lunch" co-anchor Tyler Mathisen. (Photo credit: CNBC Events)

On May 4, CNBC hosted its “Small Business Playbook: Actionable Advice to Stage a Strong Comeback” webinar. It featured speakers such as “Shark Tank” star Robert Herjavec and Life is Good co-founder Bert Jacobs, among many other fine businessmen and women. 

There is no doubt that COVID-19 affected just about every type of business from small to large. While many businesses had to cut staff and close their doors, some actually pivoted and were very profitable.

Robert Herjavec is not just co-host of ABC’s “Shark Tank.” He’s also the founder of the cybersecurity company The Herjavec Group. His segment was titled “From Surviving to Thriving.” He discussed what small business owners should do to reinvent and revitalize their businesses. Also, he offered advice on how to stage a successful comeback after being closed or operating at a limited capacity during COVID-19.

“Well, the first thing I’ve learned is we are unbelievably resilient,” Herjavec said during the CNBC Small Business Playbook webinar. “I mean if you look at the world today and when the pandemic started, who would have known and the chaos and the uncertainty and the fear. What I’ve learned during the pandemic is that while change might be inevitable, nobody foresaw how quickly things were going to change. I think what we’ve seen are the businesses that were able to adapt quickly, did quite well. I have friends in industries that didn’t do well, didn’t adapt very quickly, they survived and now they’re thriving and vice versa. I think it’s been an accelerator. I think it’s been a revolution that has changed consumer and client behavior forever in some ways.”

“Shark Tank” investor Robert Herjavec (Photo credit: CNBC Events)

Q: Do you find that you now make decisions quicker than you might have a year or two years ago? Will that be part of the residue going forward of the pandemic? That nothing will go back to that same slower speed?

Herjavec: “I used to say business moves at the speed of lighting or some other catchphrase. Now, business moves at the speed of the pandemic. Everybody in the tech field knew all of this change was going to happen. All of my friends who are non-tech say to me, would you have ever seen this change happening? I said ‘yes, absolutely.’ But no one saw it happening in the course of 12 months. The pandemic has compressed everything and accelerated decision making. It’s better to make a decision and move forward than to sit still. Yes, pandemic moves things quickly.”

Q: Let’s talk a little bit about how you dealt with no so much the Herjavec Group but some of those companies which you’ve taken stakes so famously on “Shark Tank” or other smaller companies. What were their biggest challenges and what were you telling them? How were you advising them?

Herjavec: “The first thing we did was…in the middle of the crisis, communication is key. We set up a weekly stand-up call with all of our small businesses from the ‘Shark Tank’ world. Number one communicate, communicate, communicate. The second thing we did was unfounded optimism kills a business. I’m a very optimistic guy. I wake up everyday believing that tomorrow will be better than yesterday. But when you are facing a crisis, it’s about reality. It’s not about optimism. We told these businesses: ‘Don’t expect the world to end. But be prepared for the worst.’ The other thing we did was… a lot of small businesses got in trouble because they were afraid to cut costs, they were afraid to go too far. The third thing we said to people was… ‘It is better to cut more and add than to cut less.’ We encouraged people to take a little more of a pessimistic view and get ready. In a crisis, nobody can help you except yourself. You’ve got to make decisions everyday and deal with reality.”

Watch the Robert Herjavec interview below:

Q: Let’s fast forward to today. What do you see as the biggest challenges for small businesses whether they are inside your portfolio or companies or not?

Herjavec: “We are highly, highly bullish. I think we are about to hit the roaring 20s. I think we are going to see one of the greatest growths in the economy that we’ve seen in our lifetime. What we’re seeing now is businesses aren’t prepared. Human beings never think it’s going to be as bad as it’s going to be and they never recover quickly enough. That’s what I’m seeing now. People aren’t ready for the expansion. They are being too conservative, they’re not being bullish enough. The second thing is the reality of the world has changed forever. People are obviously buying everything online. A lot of the brick and mortar kind of businesses haven’t made that adjustment. The third thing we’re seeing is people are letting go of brick and mortar stores and things like that a little too quickly. I still think if you have a strong brand, a consumer still wants to walk into a store. You can’t completely pivot until you are ready. If you built your business in a brick and mortar way, you’ve got to move online but you’ve got to maintain some of your loyal customers. You’ve got to know what your customers want.”

Q: I’m having trouble getting employees. I need low-skilled employees and we can’t find them at $15 per hour. What recommendations do you have to attract workers? 

Herjavec: “It’s not just low-skilled workers, it’s also high-skilled workers. I have the same problem. My suggestion is people want to be led, not managed. It comes down to creating your great environment that people want to come to. If you have a great place to work, people are going to want to be there.”

Life is Good avoids bankruptcy during pandemic

Retailer Life is Good almost had to file for bankruptcy during COVID-19. The company decided to pivot by ordering batches of blank merchandise and designing them with new slogans, on demand. Its co-founder and CEO Bert Jacobs discussed his company during the CNBC Small Business Playbook as well.

CNBC Correspondent Sharon Epperson: “I believe you are absolutely right: Life is still good. As we go through this pandemic and as it continues, we mourn the lives that were lost, we also celebrate their legacies. And as businesses, some of whom who failed to survive, others are able to pivot, to reinvent and to not only survive but to thrive. I’d love for you to tell us a little about how you’ve done it.”

Life is Good co-founder and CEO Bert Jacobs (Photo credit: CNBC Events)

Bert Jacobs: “We learned very one that Life is Good surprisingly. We were kind of stumbling along, making t-shirts selling them in the street. When we started Life is Good, we developed a small community of people. As they wrote us and e-mailed us, we learned that a lot of our best customers weren’t people on easy street. They were actually people facing adversity. That actually surprised us. It caught us off guard a little bit. What we learned is…if somebody’s never been challenged, everything’s relative. But if someone’s been in a hospital for two years eating through a tube and they go out and have a sandwich, that’s like the World Series. It actually became individuals who faced very difficult things. What these people were expressing is they have a different level of gratitude through life once you’ve almost had things pulled away. What we did with Life is Good is we took the lessons from our customers is, ‘People need optimism more than ever.’ Ok, we can’t tell everyone that everything’s fine. We’re not smart enough to know if it is fine or it’s not. But we can tell them to stay calm, stay cool and stay home. So let’s make t-shirts about it so that’s what we did. Like any other retail-based company, we were operating upon a 12-month supply chain trying to determine what consumers wanted a year from now. We don’t have a crystal ball and our business suffered as a result of that. But all of a sudden because of the pandemic, we not only started speaking to behavior like staying home but support system. We’ve learned that no matter what we go through, we can’t do it alone. We need to feel safe, we need to feel loved, we need to feel people around us. So we started making t-shirts about ‘quarantine mates’. We started speaking to whatever was culturally relevant, which at the time, was a lot of difficult things. We tried to keep it light and we tried to focus on the opportunity more than the obstacle.”

Q: How did you change your business model? Looking at that wholesale distribution model that you say can take a year from that idea to out into the market, you changed it to a more consumer-centric focus. How were you able to pivot and reinvent so quickly and what were the results for doing that?

Bert Jacobs: “There’s a lot of operational changes that happen to a business. After all these 27 years we’ve been making Life is Good t-shirts, there are all of these operational elements to the business that have fit in with the normal retail supply chain. We had to reduce those and reduce those and reduce those. We had to really focus on, you said the right words, consumer centric changing to being a consumer-centric model. That means we have to put up on our website on Tuesday an array of new t-shirts and read the data that night and say what worked and what didn’t work? Not everything we do works. So the t-shirt with the turtle is selling and the t-shirt with the bear is not. Don’t make any more bear t-shirts and make more turtle t-shirts, kind of simple as that. We learned on the fly, we invested in a lot of technology on the fly. We started taking on inventory of blank t-shirts and hoodies etcetera and printing to order based on exact consumer demand. That’s the short of it. Reducing that window is taking 100 steps and saying how do we make it three steps and which ones do you cut out? You cut out all of the steps that have nothing to do with the consumer, okay. We’ve been working with retail buyers and sales reps and our own opinion of what’s right and what’s wrong for all of these years. Forget about it, what I think and what our team things doesn’t matter as much. The relationship that matters is between the consumer and the brand. In the 21st century, the consumer is demanding more choice and they want more choices fast. When they like something, they want more of it. Either you are there and ready to supply them more of it or you’re not and if you’re not, you lose.”

Watch the Bert Jacobs interview below:

Q: If you are ready and you’ve taken those steps, the results can be tremendous. You’ve seen increases during a pandemic in revenue, in customers and even in contributions to your foundation. Can you share with us some of the results from taking these steps in changing your operation?

Bert Jacobs: “We’re not so different than anybody else. When this thing hit, 50 percent of our business was wholesale. Wholesaling Life is Good products to brick and mortar retail stores. That business died in a hurry when all of the stores had to close their doors. We were in a situation where we were facing bankruptcy and we were facing having to cut half of our staff. That’s when we said, ‘Hey, in sports… the best defense is offense.’ Let’s try this, let’s play offense really hard and produce this stuff to order and see what happens. What ended up happening was 2020 was the best top line we’ve had in 27 years and the strongest bottom line. I mean, that’s a pretty big deal. Our kids foundation, what happens as our community grows, we have a very generous community who donates. When they buy a t-shirt, they often donate 50 cents or a dollar to our kids foundation. Ten percent of our profit always goes to our kids foundation. When the profit is higher for the for-profit, it’s higher for the non-profit. So our non-profit had a fantastic year, too. 2020 showed us how we should be running our business.”

CNBC will host another Small Business Playbook webinar in August 2021. For more info on that and other CNBC events, go to https://www.cnbcevents.com/

Sponsored Stories

Sponsored Stories