Small business owners need to protect their mental health as workplace stress rises

Tony Featherstone

March 19, 2020

THE AGE

An owner works their entire life to grow a small business, employee staff, provide an income and hopefully build wealth. Then, within a few months, the business collapses.

The owner does everything she can to keep the business afloat and staff employed. She runs down cash reserves, injects personal savings into the business and borrows against her house.

But company revenue tanks as coronavirus smashes the economy. Profit margins are slim at the best of times and the business has no chance of coping with a sharp, unexpected drop in revenue that could last months or longer.

The owner is distraught at the destruction of her wealth, the mountain of debt facing her and the lack of options. Her physical and mental health, and relationships, suffers.

Sadly, thousands of small business owners could face a similar scenario this year – one that could damage the health and wellbeing of some business owners who are under incredible pressure to keep their operation alive and staff employed.

As governments plan for the consequences of cornavirus, they need to consider the longer-term health effects of the virus on small-business owners who lose everything.

I first wrote on mental health and entrepreneurship for The Venture more than a decade ago. Having just finished a Masters of Entrepreneurship at the time, I met several failed entrepreneurs who had significant health issues after their venture collapsed.

I took an interest in the topic and soon realised there were few specialist mental health resources for business owners, even though entrepreneurship can be an emotional rollercoaster. The media was so interested in entrepreneurial successes that we rarely covered ethical failures – and the health consequences on owners who took a risk and tried their best.

Several entrepreneurs told me about the effect of business failure on their relationships and mental health. I published those case studies in the old Business Review Weekly magazine (which I used to edit) and elsewhere. Those stories attracted many emails and calls from entrepreneurs who related to health problems their peers encountered.

I fear many more small business owners will face significant stress-related health problems in the next six months that will go beyond the actual virus.

Those who have never started or run a small business might not understand the stress involved. Everybody is affected by coronavirus in one way or another, but full-time employees at least have access to sick pay and, depending on their industry, potential to work from home.

Many casual and other gig economy workers will suffer from fewer shifts, store closures or cancelled events. Those who survive an inevitable recession – hard for workers who have limited or no savings – hopefully find work when the economy recovers.

It is a different story for small business. Most owners cannot put the business on hold for a few months or cope with their revenue tanking. Others that rely on a key few clients could die in a blink if a corporate freezes work with their small supplier. It is a small business truism that owners are often the last paid when trading conditions sour.

The big concern is that conditions do not return to normal when coronavirus is eventually under control. That is, some corporates use the crisis as an excuse to downsize their workforce, rationalise their supplier base or force suppliers to accept lower conditions.

Who knows what will happen? A certainty is many small business owners will be under incredible stress because they are worried about their cash flow, having to cut back or lay-off stressed staff, or running the business on a skeleton staff and taking on work of others.

That is before we get to small business owners fearful of contracting the virus. What happens if young family members require self-isolation and care, or how the business would operate it the owner has to self-isolate suddenly for the next two weeks?

Some owners will face an awful decision; go to work unwell and avoid getting testing, because they have to keep the business open if it is to survive; or get tested and potentially face a few weeks where the business cannot operate and faces collapse.

None of this is meant to panic small business owners or hype the potential problems. Like most journalists, I am not a health expert, so business owners should take care jumping to conclusions based on media stories that speculate about long-term outcomes from coronavirus.

Readers should always get health information from health professionals, not journalists.

For now the priority is, rightly, stopping the spread of coronavirus and saving lives. Economic and financial market impacts are lower priorities. Federal government support to help small business, particularly through deferred tax payments, is sensible.

However, the long-term effect of coronavirus for some small businesses will extend far beyond cash flow constraints or owners getting infected. We need to recognise that.

As always, owners should seek support if the stress of a potential business collapse starts to overwhelm them.