Why your mental health matters as a business owner—and how to improve it

Running a business can take a toll on your mental health. The unique challenges of meeting customer demand while managing finances and overseeing employees can be intense. In fact, 48% of small business owners surveyed in a recent CapitalOne report said they either recently experienced or are currently experiencing burnout, a state of physical and mental exhaustion that results from chronic stress. 

With your own business, it’s normal to feel overwhelmed but feeling stressed on a regular basis isn’t sustainable. Mental health challenges make it harder to make decisions, solve problems, and reach your business goals. On the other hand, mental health tools and self-care can improve your clarity, focus, and resilience—making it easier to strategize and adapt to changes in the market. 

In honor of National Mental Health Awareness Month this May, we’re sharing actionable ways to improve mental health for business owners.

Top 4 stressors for business owners and tips to manage them

Countless situations and factors can impact your mental health as a small business owner, but these four stressors tend to be common for many entrepreneurs. 

1. Financial challenges 

Your business’s finances are central to your company’s success, and improving your financial health isn’t a one-time task—it’s an ongoing process. Concerns about cash flow, revenue growth, debt, and the economy can all contribute to mental health conditions in small business owners. Though financial stress might seem impossible to avoid, there are ways to keep it in check: 

Review your finances regularly

Set aside one hour every week to review your latest profit and loss numbers, check your expenses, and go over your cash flow statements. If you use accounting software, review the reports your system generates. A lot of financial anxiety comes from confusion or lack of information. The more insight you have into your day-to-day finances, the more likely you are to feel in control of your mental health—and make decisions that improve your financial position. 

Cushion your cash flow

Cash flow constraints don’t just cause considerable stress—they also limit your choices at any given time. If you find ways to cushion your cash flow, you can give yourself more breathing room and more options. 

Start by reviewing accounts receivable and payable, then look at ways to sync up your pay cycles or eliminate expenses. If you’re still tight on cash flow, consider reevaluating your price structure or refinancing one of your loans.

Start preparing for tax time early

A 2023 survey from Freshbooks found that 80% of small business owners feel stressed during tax season. For 43% of those small business owners, their stress is fueled by tax procrastination. That’s why it’s never too early to get a jumpstart on tax preparation. That starts by implementing a streamlined bookkeeping system and organizing your past tax returns and documents. From there, you may want to itemize your business expenses, calculate your payroll taxes, and hire a CPA.  

Consider business financing 

Business financing can give you the cash flow or extra capital you need to weather a tough period or invest in your growth. If you can afford to take on debt, consider these financing options:

• Business term loan: Business term loans are helpful if you need capital for a big expense or undertaking, like hiring a new employee or purchasing property. 
• Business line of credit: A business line of credit is a good option for short-term financing needs, like bridging a cash flow gap or paying for a one-off project. 
• Equipment financing: If you need money to replace or invest in equipment that’s essential to your operations, equipment financing is a great solution. 
• Invoice factoring: If you have a lot of outstanding invoices, invoice factoring can free up your cash flow until you’re paid. 

If you need a flexible small business financing solution with an easy application and fast turnaround time, consider Funding Circle. See our options or apply today

2. Operations 

Everything from supply chain problems and compliance complications to customer relationships and employee management challenges can impact mental health. The most effective way to reduce operational anxiety is to tackle issues head-on. Try these strategies:

Diagnose the problem 

Write a list of everything causing you anxiety from an operational standpoint, whether it’s delays on client projects or scheduling employee shifts. From there, carve out time to look into each stressor. 

Let’s say, for example, that your interior design firm is continually delayed on your client projects. Start by reviewing your client’s needs and requests, then walk through each step of your internal workflow to see where you come up against obstacles or bottlenecks. You might find out that you’re spending too much time in the brainstorm stage or waiting on your client’s approval before getting ahead with certain steps. 

Implement solutions

After you pinpoint the problem, work on different solutions. Using the example above, your solution for project delays could be as simple as budgeting more time for projects up front, delegating tasks to different employees, or using software to automate certain processes. 

Tackle backburner to-dos

A growing list of to-dos can ramp up your anxiety levels and interfere with daily operations. Set aside one hour a week to review your list and make headway on checking items off. Think: scheduling a contractor to consult on your storefront remodel or researching social media contractors. 

3. Heavy workloads or long hours 

There are certain periods in business that demand more of your time and effort, but regularly working long hours or overloading yourself with tasks can contribute to mental health issues. Over time, not only will you find yourself extra stressed, you might also see your business goals or standards slip. 

If long hours or an intense workload have you feeling perpetually exhausted, try these tactics:

Embrace delegation

Write down all your different tasks and responsibilities as a business owner, then note which items other people could take over or help with. Offloading tasks to a business partner or trusted employee gives you more time and mental space to dedicate to business strategy, customer relations, and growth. 

Hire more support

Review your list of responsibilities again, then put an asterisk next to items you could outsource to employees. You may want to:

• Hire a full-time or part-time employee to take over a big role you regularly find yourself strapped with, like sales or business development.
• Hire an agency to streamline a certain aspect of your business, like marketing or financial management. 
• Hire independent contractors to complete one-off tasks you don’t have the expertise or time to handle. 

Setting boundaries 

Giving yourself boundaries to work within helps you prioritize the most important tasks without sacrificing your mental health. Consider these options: 

• Set a daily/weekly work schedule and stick to it. 
• Limit your schedule to a max number of weekly meetings or calls, so you don’t overload yourself. 
• Say no to events and tasks that aren’t on your priority list. 
• Communicate clear expectations of when you’ll be available to clients, customers, and employees. 
• Don’t discount the importance of taking mental health days!

4. External conditions 

External conditions—things that are largely out of your control—can cause an overwhelming amount of stress as a small business owner. After all, environmental changes, elections, industry regulation updates, local events, and fluctuations in the economy all affect how your business operates and profits. 

If you find yourself worrying often about factors beyond your control, consider taking these steps:

Make contingency plans

Making a plan for the worst-case scenario can free up some of your brain space and lower your stress levels. 

Start by listing the top three things you worry about affecting your business, whether it’s a recession or a natural disaster. From there, outline realistic contingency plans that include how you’ll respond in the moment as well as what you can do now to prevent or minimize harm to your business. 

Focus on what you can control

Double down on the areas you do have control over, like your customer service or products. Brainstorm ways to improve your business so you’re as strong as possible should anything adverse happen. 

Consult experts and peers

Experts like accountants and business coaches can give you valuable business advice about overcoming specific obstacles, while fellow business owners can offer inspiring stories and provide mental health support in tough or uncertain times. 

You may also want to reach out to a mental health professional who can validate your concerns and give you personalized advice for managing your stress.   

Reduce your stress, pave the way for more success

Taking care of your mental health as a business owner pays off—figuratively and literally. Business owners are the captains of their operations: the more stable and adaptable you are, the more likely your business is to survive tough times and come out the other side thriving. 

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