Kevin O’Leary’s advice for small business owners as the economy reopens: ‘Practice being thrifty’

Since late April, states across America have started to reopen, allowing for businesses to open their doors with restrictions. 

In states like Alabama, Colorado and Florida, for example, retail stores are able to reopen at limited capacity. In others, like Idaho and Kansas, gyms have reopened with precautions in place.

But even when business owners get the green light, there are common concerns – around safety, consumer demand, rehiring and paying employees and other costs, to name a few. 

To those points, Kevin O’Leary, investor on ABC’s “Shark Tank,” has some advice for small business owners.

“Lower your expectations for what’s going to happen” as your business reopens, he says.

First of all, “People are scared,” says O’Leary. That means not all your customers may feel comfortable returning.

According to a survey by predictive analytics company First Insight conducted on April 20, only 43% of Americans surveyed feel comfortable returning to local small businesses. (Specifically, they feel most safe returning to reopened grocery stores [54%], drugstore chains [50%] and big-box retailers [45%], and least comfortable returning to shopping malls [33%].)

Plus there are so many unusual logistics. The new normal for restaurants, for example, may include staff wearing masks, disposable or digital menus and lower capacity to accommodate six feet of space between each table. 

So, says O’Leary, “don’t put any specific targets in place because you don’t know what it’s going to be like…. Obviously, you’re going to have social distancing and an issue may be very hard to be profitable if you’re expecting people to come to your store somewhere.”

And business recovery will take time, according to O’Leary. 

“People are still out of their mind worried about this virus and they’re going to take a long time to forget about it,” he says. ”So, you have to stay alive for that day.”

To that end, O’Leary advises businesses need to be smart about spending money.

“Keep your overhead low. Try and keep the best employees around you because you’re gonna need them one day,” O’leary says.

“Lower your expectations and stay lean and mean and don’t spend money on stuff you don’t need.”

According to O’Leary, “one third of the crap you buy for yourself you don’t need. I’ve been saying that for years,” he says. So put that lesson to work when it comes to your business too.

“This is a time to really practice being thrifty,” says O’Leary. 

By doing so, business owners can cut costs and remain afloat until sales come back — which he believes they will. 

“This, too, will be over at some point,” says O’Leary.

“Everything will change once as a therapeutic and a vaccine, but we don’t know when that’s going to be.”

All in all, O’Leary believes “America will spring back so fast when people feel safe again. It’ll be great. Baby steps,” he says.

Disclosure: CNBC owns the exclusive off-network cable rights to “Shark Tank.”

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