The Importance of Mental Health for Small-Business Owners

In 2022, Incfile, a business services provider, surveyed over 2,000 business owners, consultants, and freelancers across 13 industries and found that 20% of small-business owners are experiencing poor mental health. The survey also found nearly 65% of small-business owners have experienced anxiety and over 50% suffered from depression. 

While 49% of those surveyed said they suffered pandemic-related anxiety, depression, and other mental health problems, 35% stated they had these issues on a chronic and ongoing basis before the pandemic.

Business owners also are addressing the issues with themselves and for their employees, with the survey stating that 77% say they now prioritize mental health care. But how does poor mental health manifest for small-business owners? How do you know you’re experiencing mental health challenges?

Signs of Poor Mental Health in Small-Business Owners

Cherlette McCoullough, PLMFT (provisional licensed marriage and family therapist) of Center Peace Couples and Family Therapy in Florida, sees many small-business owner clients. She says her clients are high-functioning, well-educated people whose lives are unraveling because they’re not confronting the stressors of business ownership well, and that reflects on their family lives. 

“Mental health involves thoughts, emotions, and behaviors,” she explains. “They’re missing important family engagements and those of organizations they are part of, losing connection with others.” Those poor relationships, which include business connections, are driven by her clients’ mental state. 

“I've seen many unable to regulate emotionally, because they're so depressed and filled with so much anxiety,” she adds.

But despite being in this mental position, they do what’s necessary to appear well externally and keep the business going. “They're showing up to the business,” she says, and doing what’s necessary to keep it functioning.

In business owners' silent moments while they're experiencing anxiety and depression, McCullough says they're also suffering with stomachaches, headaches, and other health issues. 

Instead of getting help, however, they’re engaging in behaviors to help them feel less dysregulated, says McCullough. They’re looking for ways to disconnect, so they may occupy themselves with bingeing, from entertainment to food and shopping and even idle time, or restricting behaviors, such as limiting or cutting ties to others. “These are coping tools small-business owners use because they don’t have others, and often aren’t getting mental health support,” she adds.

Business Overwhelm Leads to Mental Burnout

“As business owners, we think we’re always supposed to be the go-to person,” says Tar’Kesa Colvin, who sees this especially among women. Colvin is CEO and master CEO strategist at TColvin Consulting, which supports women-owned businesses in “creating plans for profitability that doesn't include hustle and burnout,” she explains. Some of Colvin’s clients are men, and she sees similar “all things to all people” behavior with them.

Colvin sees three challenges with small-business owners that lead to poor mental health. The first is the shift from employee to entrepreneur, a trend that accelerated during the pandemic. According to the U.S. Census Bureau, people filed a mammoth 5.4 million new business applications in 2021, the most in recorded history and 68% higher than the average number of filings during the five years before the pandemic.

“Wearing the CEO hat gets to be challenging, especially for women, who handle both business and home responsibilities,” says Colvin, who holds an MBA in operations management. “With a job, you can go home and leave work behind, but not with a business.”

And some women can have a hard time setting boundaries, Colvin says. “That sets an expectation with staff that you’re always on, which can lead to physical and mental burnout,” she explains, recalling her own experience with both. “It’s important for women to do the one thing they feel challenged to do,” she continues. “That’s setting boundaries, which begins with setting business hours.” Sometimes, doing that requires coaching or counseling.

Small-business owners, with all they have on their plates, might find the most benefit from therapy, particularly if their mental health is damaging their business and they must change what they’re doing.

—Cherlette McCoullough, therapist, Center Peace Couples and Family Therapy

“The second thing small-business owners often cannot do is look at the value of their time,” Colvin says. “The hourly rate you got paid on a job no longer is your hourly rate as a CEO and understanding your hourly rate as a CEO makes you value it more effectively.” 

That means delegating tasks that are not in what Colvin calls your “zone of genius” – that talent or gift everyone has that comes as easy to you as breathing and is the basis of your business revenue. “If that’s not graphic design or assembling furniture, pay someone else to do that,” she says. Doing “all the things” in your business, especially those not in your zone of genius, costs your company significant revenue, which leads to being overworked and underpaid. “That can cause stress, depression, and anxiety,” Colvin explains.

Embracing delegating is something Colvin doesn’t see enough small-business owners do. “This boss move is not about losing control but regaining time and control over what you do to bring revenue to your business,” she says. It doesn't represent loss of control; it reduces stress to delegate. 

The third issue Colvin sees challenging the mental health of small-business owners is toxic pricing. “Undercharging for your products and services causes more stress, more trauma, and more negative impact on mental health than not making a sale at all,” she says. “Now you're putting forth the effort, but the effort and the income are not matching up." 

Learning how to price products and services properly – to reflect their value, not the time you spend offering them – is key to increased revenue. That usually improves mental well-being, as long as you don't overwork yourself.

Mindfulness as a Key to Solid Mental Health

Paige Oldham, author of The Simple Mindfulness blog, asserts the practice of mindfulness can reduce business-related stress. An entrepreneur and CFO at a behavioral health practice, Oldham says mindfulness is slowing down enough to notice what’s going on in your head and in your life at all times, without judgment. 

“Until you slow down, step back, get a mindful objective view of what’s going on that specifically affects your life, you won't see what's most important for you to make important decisions," she explains.

Oldham says, “Mindfulness is just noticing.” But she explains most people are busy noticing everything: what's happening in other people’s circumstances, the economy, the environment, and other things that can cause stress. “But they don’t notice and recognize the patterns in their lives that keep giving them certain outcomes,” she says. 

In business, that often translates to beliefs about what you can achieve. “You may say you want to generate a certain amount of revenue, but your beliefs don’t support that, so you do things that frustrate that goal,” she says. “It’s not what you see that you believe, it’s what you believe that you’ll see,” she continues.

What drives stress, anxiety, and depression for small-business owners is their limiting beliefs or behavior inconsistent with their goals. “Because they’re not mindful, they’re not aware of why what they’re doing is affecting their business outcomes,” she says. 

“Start noticing the results you're getting in business and ask yourself, what actions did I take?” she explains. “You believe something before you take an action – 'If I do this thing, I believe I’ll get this outcome.'” It’s important to ask yourself what it is you’re telling yourself that’s leading to the results you’re getting.

Learning mindfulness takes time and effort, but it can be transformative for your business and your life, which are intertwined. Having mindfulness allows you to determine if the ways you’re operating your enterprise – overworking, not delegating, toxic pricing – are leading to mental health challenges.

"Small-business owners, with all they have on their plates, might find the most benefit from therapy, particularly if their mental health is damaging their business and they must change what they’re doing,” says McCullough. “It’s available at different costs and in unique formats, like virtual.” There may be resources in your local area that help you identify the right help for you. 

A version of this article was originally published on January 5, 2023.