Stress and the Mental Impact of Running a Business

min read

written by Lucy Hancock

Stress and the Mental Impact of Running a Business

Mental health challenges of small business owners

80% of small business owners in the UK reported experiencing symptoms of poor mental health. In fact, when comparing mental health conditions among entrepreneurs to the general public, more entrepreneurs experience mental health issues than those who aren’t business owners.

Let’s explore some of the potential contributors to poor mental health in the workplace.

Business financial strain

The financial pressure of running a business can leave you feeling worried about the state of your business, both now and in the future. You may worry about meeting financial obligations, such as paying the salaries of your employees, or your office bills. This financial stress can contribute to feeling overwhelmed and isolated. In fact, 49% of small business owners believe their mental health has suffered from the stress

of managing their business finances in the past year.

To avoid business financial strain impacting your mental wellbeing, be sure to address any financial worries early on, such as revisiting your cash flow, and reach out for support should you need it.

Isolation

Taking care of your business can leave you feeling isolated at times, especially in the early days when you’re committing significant time and effort into getting your new venture off the ground. You’ll likely spend a lot of time alone which can leave you feeling isolated - contributing to loneliness and depression. If you’re finding yourself feeling isolated, try to expand your network and meet like-minded entrepreneurs who you can share your experience with. It’s likely they’ll have experienced similar emotions and can offer you support.

Work performance

Work performance can both influence and be influenced by your mental wellbeing as a business owner. Should your business thrive and hit its objectives, this can reduce financial strain and anxiety. Whereas, if your company experiences a rough patch or loses profits, this may negatively impact your mental health and leave you fearful for your company’s future. For many business owners, their work is closely tied to their self-worth and identity - if work is going well, this can boost self-esteem but if business is underperforming this can lead to self-doubt and failure. If you’re finding work performance is taking its toll on your mental health, don’t hesitate to reach out for support, such as seeking professional help, to make things feel easier to manage.

Understanding taxes/finances

As a business owner, you’ll need to comply with and understand various tax and financial regulations, which can feel overwhelming to get your head around. If you struggle to understand your business’ finances, you may be left feeling anxious or uncertain about your new venture. Equally, a lack of financial literacy can lead to poor financial planning which may negatively affect your business’ livelihood.

Making sure you have a detailed business plan to hand can alleviate your financial concerns and improve your knowledge. Your business plan is a point of reference should you need it, detailing your financial objectives and how you’ll budget for your business objectives. You can even refer to the cash flow within your business plan, which details the cash required by your business day-to-day and when your costs are due, to keep things running smoothly. This will provide a sense of direction and reduce your anxiety as a result.

Loss of a deal/new business pitch

You’ll likely invest significant time and energy into pursuing new business opportunities, so losing a deal or pitch can leave you feeling disappointed and frustrated.

Losing a business deal can also have financial consequences, especially if you were expecting significant revenue had you won the pitch. This financial strain can contribute to stress and anxiety over the financial health of your business. The first step in coping with the loss of a deal is acknowledging and accepting your emotions as they come. Disappointment is only natural - give yourself time to accept what has happened. From there, you can approach the situation as an opportunity to learn and identify what could be improved for your next opportunity. Finally, connect with your network such as your colleagues or friends who understand these challenges and can provide support.

Overworking and burnout

Starting your own business is no easy task and often comes with an endless to-do list! From meeting financial goals to keeping up with competitors, it’s easy to feel overwhelmed and overworked as a business owner, which can lead to burnout over time. In turn, burnout can lead to a lack of motivation, exhaustion and a loss of passion for your business as a result. In fact, 37% of UK small business owners say they’ve experienced burnout as a result of running a business. To avoid overworking and burnout, make sure to reach out to your support network when you feel snowed under, and recognise the signs of burnout to prevent it.

Mental health conditions suffered by entrepreneurs

As we’ve mentioned, being a business owner can come with its fair share of challenges which can be detrimental to your mental wellbeing. With 75% of small business owners being concerned about their mental health, it’s clear that more awareness and emphasis are needed on mental wellbeing amongst entrepreneurs.

When looking into the mental health conditions of business owners, depression was the most common condition suffered, with 30% of business owners struggling. So, if you’re looking to start your own business, prioritising self-care and learning how to manage your stress is vital. Doing so can protect not only your wellbeing, but the success and longevity of your business too.

The mental impact of running a business in statistics

While starting your own business can be life-changing, it also comes with a lot of responsibility, particularly around your business’ success, which can cause worry and stress. With 65% of small business owners experiencing anxiety, it’s clear that the added pressure can have major repercussions on your mental wellbeing.

Likewise, 60% of small business owners have felt their stress levels increase in recent months due to the economic landscape. Current economic conditions such as inflation and supply chain issues following Brexit are likely to have played a part in the day-to-day running of many small businesses, with 5% of businesses with 10 or more employees having experienced global supply chain disruption in November 2023. Changes in regulations and trade policies may also impact market access and talent acquisition, which may lead to increased anxiety. With this in mind, it’s vital that business owners take care of their wellbeing just as much as their business during periods of economic uncertainty. By prioritising self-care and wellness practices, you’ll know how to tackle any challenges that come your way.

Knowing the signs of poor mental health

We’ve touched on how running a business can cause mental health challenges as an entrepreneur, but how should you manage it? We’ll explore how to deal with the stress of running a business below, so you know what signs of poor mental health to look out for.

Increased irritability: Feeling more short-tempered than usual? If you’ve found yourself feeling more irritable and less patient than normal, it may be a sign that you’re not feeling like yourself.
Withdrawal from social activities: Social withdrawal involves not participating in social activities you used to enjoy. Our social relationships are crucial to our wellbeing, and subconsciously withdrawing from social interactions can leave you feeling isolated.
Loss of interest in work: You likely started your business out of passion and excitement. But when that love for what you do starts to fade, this may be a sign of poor mental health. If you’re finding yourself disinterested in your work and lacking motivation, it may be time to reach out for support.
Changes in sleeping and eating behaviours: A change in appetite and sleeping behaviour can be a sign that you’re struggling with your mental health. Perhaps you’re struggling to get to sleep, or you’re eating more or less than normal. If you’ve noticed a change in your sleeping or eating habits, this may be due to business stress and anxiety.

Spotting the signs of poor mental health early can prevent the problem from escalating. The sooner you acknowledge you may be struggling, the sooner you can reach out for support.

How to look after your mental health when running a business

Running a business can be emotionally demanding, so it’s important you take care of your mental health for long-term business success and your wellbeing.

Here are just some of the ways you can look after your mental health as a business owner:

Practise self care: Set aside time for you to take care of your wellbeing. Self care looks different for everyone - perhaps you’ll practise meditation, take a walk or write down how you’re feeling. Try to incorporate relaxation techniques into your day-to-day to clear your mind.
Set boundaries: As a business owner, keeping a healthy work-life balance can feel tricky, especially if you work from home. Try to set clear boundaries between your work and personal life. Make sure you establish specific work hours to avoid overworking and make time for your hobbies and family and friends.
Take regular breaks: Be sure to take regular breaks throughout the day, away from your desk, to recharge and prevent burnout. Also, make sure you take time off throughout the year to switch off from work and unwind.
Professional help: Seeking professional help from a therapist or counsellor can provide you with valuable support and ways to cope when you’re struggling. You can voice any anxieties you may have confidentially, to take some weight off your shoulders. Remember that seeking help isn’t a sign of weakness - if you had a physical problem, you’d see a doctor and the same should apply to your mental health.

Psychotherapist and author of ‘But Are You Alive?’, Eloise Skinner offers her advice on how to look after your mental health as a business owner.

“Make sure you have stable foundations in place for the rest of your life, as you start your journey as a business owner. This means prioritising your own wellbeing (sleep, nutrition, fitness, etc.), and your relationships (friends, family and colleagues). It also means setting aside time for your passions and hobbies - and retaining a sense of self outside of your business.

Starting a new venture can be overwhelming, often in a good way, but sometimes in an intimidating way too. Building a life that feels stable, secure and balanced - both within the workplace and outside of it - might help you to navigate the rollercoaster of business life a little better.”

Real life case studies from entrepreneurs

Here are some examples of how other entrepreneurs take care of their mental health.

Hayley Knight - Co-founder and Comms Director at BE YELLOW

Entrepreneur Hayley Knight, co-founder and Comms Director of PR and marketing agency BE YELLOW, explains how burnout led to her closing down her last business to find a better way of working, implementing four-day work weeks and fully remote working.

“I suffer from severe anxiety and ADHD, and in the past, I have failed to set healthy boundaries, taken on too much work and said yes to everything.

“Now I set boundaries, and have systems in place that help increase my focus, and productivity and manage my workload. We also have four-day work weeks, we use our free day for professional and personal development, and implement regular focus periods.

“I have developed a strict morning routine, which includes meditation and exercise, and I meditate when I am feeling overwhelmed, or need to make a decision. I also take a step back and have learned not to reply to things impulsively. I also travel full time, which is great for my wellbeing.”

Aaron Bond - Director of Operations at Bond Rees Ltd

Aaron Bond, Director of Operations at Bond Rees Ltd, explains how he has achieved a sustainable work-life balance after setting up his own private detective agency.

“Running a business as a small business owner has been an incredibly rewarding yet mentally demanding journey for me. One of the most profound challenges has been the blurring of boundaries between work and my personal life.

“Unlike traditional employment with set working hours, being an entrepreneur means that the concept of ‘regular hours’ becomes obsolete. The demands of the business are relentless, and it often feels like the entrepreneurial journey is a round-the-clock commitment. This constant state of vigilance, coupled with the weight of responsibility for the business' success, can take a toll on mental wellbeing. The never-ending nature of the work can lead to burnout, stress, and a persistent feeling of being overwhelmed.

“To navigate these challenges, I've prioritised creating a sustainable work-life balance. Recognising that my mental health is integral to the success of my business, I've implemented strict boundaries around working hours and made a conscious effort to set aside dedicated time for self-care. Whether it's taking short breaks throughout the day, scheduling regular moments of relaxation, or disconnecting from work during evenings and weekends, these practices have played a crucial role in maintaining my mental resilience.”

Further resources

If you’re finding things difficult to cope with right now, you don’t need to suffer in silence. There are plenty of helpful resources at hand to help you take care of your mental health as a business owner, including:

The Federation of Small Businesses - A Guide for Small Businesses
Mind’s mental health at work
NHS - Get your free Mind Plan
Mental Health at Work’s The Mental Health of the Self-Employed report
Find an NHS Talking Therapies service

Conclusion

Prioritising your mental health doesn’t just affect your personal life, it’s also crucial to successful entrepreneurship. The life of a business owner is exciting and fulfilling, but the pressures of running a company can be overwhelming. Without self care and boundaries, it can be all too easy to neglect your wellbeing and be left feeling burnt out and emotionally drained.

Taking care of your mental health is an investment in both yourself and your business’ success. If you’ve found your mental health has taken a dip, don’t hesitate to reach out for support. By implementing self care practices into your day-to-day, you can embrace the challenges of entrepreneurship with open arms.

Ready to form your own company? Check if your business name is available today to get started.

Author bio

Lucy Hancock is an experienced finance writer, having previously worked for Staysure Travel Insurance before working at MoneySuperMarket where she specialised in all areas of personal finance, from credit cards and loans to pensions and retirement planning. Having worked in digital marketing for several years, she’s passionate about the value small business marketing can bring to those looking to grow their businesses. She has written extensively across all areas of business and personal finance, to help business owners like you make informed financial decisions.