The coronavirus takes an emotional toll on business owners who have invested their lives building a company and brand, ”Shark Tank” investor and cybersecurity entrepreneur Robert Herjavec said Thursday.
He said he has had to lay off about 8% of Herjavec Group’s 350-person workforce, a “painfully brutal” move.
“The thought of it possibly all going away is really scary,” Herjavec said on CNBC’s “Squawk Alley.” “I don’t care if you’re a Shark. I don’t care how much money you’re worth. I don’t care if you’re a small business. People take a lot of pride in their small businesses.”
Entrepreneurs do not start businesses “just for a paycheck,” said the CEO and founder of Herjavec Group, which provides cybersecurity products and services to business.
“They have their entire ego and who they are and everything tied into that, so it’s been really hard,” he said.
Herjavec said a few weeks ago, as the economic threat from the coronavirus intensified, he had to make the layoffs.
“We had to do some initial layoffs to nonessential services so that we could actually increase our services people,” he said. “I’ve got to tell you, it’s brutal. It’s absolutely, painfully brutal. You feel guilty. You feel bad.”
Government mandates to slow the spread of COVID-19 have brought the U.S. economy to a near halt. In the last two weeks alone, roughly 10 million Americans have filed jobless claims.
Herjavec, who owns stakes in many small and medium-size businesses, said the jobless claims were of “biblical proportions” and said he expects more layoffs in April.
“The emotion for every small business owner is really difficult,” he said.
Advice for small business owners
Robert Herjavec, CEO, Herjavec Group
Scott Mlyn | CNBC
As difficult as it is, Herjavec said, small business owners must make decisions that are best for their company.
“The key for every small business is you have to survive,” he said. “I think it’s easy to say, ‘Don’t let anybody go. And do the right thing,’ but nobody really knows how long this is going to last. … If the business doesn’t survive, there’s nothing to come back to.”
Herjavec said his specific advice to all small businesses is “hoard cash.”
“Not physically in your house, but in your bank account. Take anything on your balance sheet that you can put into liquid cash right now and do that,” he said.”
“And then look at all your expenses and put them off,” he added. “And I know that’s awful and I know that every time you don’t pay a bill that is another business that is affected.”
He also advised entrepreneurs who qualify to apply for the small business loans that were created as part of the $2 trillion economic stimulus package.
However, Herjavec said there may be challenges in dispersing the $350 billion set aside for the program, due to significant demand.
“But it’s coming, and again, you’ve got survive in order to get that stimulus. If you’re business isn’t around, then there’s no point in getting the stimulus,” he said.
Disclosure: CNBC owns the exclusive off-network cable rights to “Shark Tank,” on which Robert Herjavec is a co-host.