Small business owners might be optimistic about the future, but that doesn’t mean that the daily grind isn’t stressful, research reveals.
A range of issues are keeping small business owners awake at night, including business and succession planning, stress and lifestyle, cash flow, business protection and declining sales and profits.
The 2016 SME Research Report, conducted for Prosperity Advisers Group by Bstar, included more than 500 face-to-face interviews with SME businesses.
The findings – when was the last time you took a break?
The research has uncovered key aspects of business performance, challenges and opportunities, culminating in the release of one of the most comprehensive annual studies of SME leaders in Australia.
It reveals that while 71 per cent of business owners spend time doing things they enjoy, only 30 per cent think their business can run without them.
This is corroborated in a 2015 survey by cloud accounting platform Xero, which revealed that 23 per cent of SME operators had not taken a holiday in two years, with more than half of those admitting it was hard to take a break.
Stress and burnout hits business owners hard
Our country’s heightened romanticism with the concept of business and entrepreneurialism has resulted in some people underestimating the work involved in running a business, according to founder and CEO of education institution for entrepreneurs, The Entourage, Jack Delosa.
Perhaps unsurprisingly stress was a major concern for respondents of the Report, with many business owners suffering burnout.
“Starting a business is one of the most difficult career paths an individual can pursue because essentially you’re creating something out of nothing,” says Delosa.
“This requires a high degree of resourcefulness and energy – because there can be so much uncertainty in the path that you’re walking.”
Once your business grows and revenues increase, suddenly you need to meet the demand and deliver on the sales being generated.
“In the early stages, there’s often a high staff turnover, it’s chaotic and there’s lots of changes and demands on staff in the business. Meanwhile, the business owner needs to be focused on building sustainable and reliable revenue streams.”
But part of managing stress means anticipating these challenges and planning ahead.
Once you start to achieve growth, keep in mind this growth can devour your cash with the sudden need for more staff, product and expertise, says Delosa.
“Once you scale and get more employees, you need very rigorous management reports and financial controls throughout the business.
“Then your wage bills and your expenses increase. By now, it can’t be all love, trust and pixie dust anymore – there needs to be controls and responsibilities.”
Why you need a business plan
Stress is also a factor in hampering the documentation of business plans.
72 per cent of business owners don’t have a plan due to feeling swamped by the everyday pressures of operating their business, according to the report.
However, a business plan can help cement the direction of your business and is a key tool in influencing financial providers to secure you finance.
For assistance in business planning and improvement, SMEs should seek an external adviser who can help them to benchmark how they are performing relative to other businesses, then help owners set some real goals and establish a plan for how to reach them.
Once you have a documented plan for your business’ future, this can take a huge weight off your shoulders.
Four top tips to lower your stress levels
- Take a break – studies suggest that a holiday can bring down those stress levels, but be warned, according to Harvard Business Review, a stressful holiday will only make things worse, so make sure you make it easy for yourself
- Exercise – According to the Australian Psychological Society getting exercise is key to helping you reduce stress
- Create a business plan – focusing your business will focus you, and will take away some of those stressful thoughts that keep you up at night
- Share your burden with someone who can help – if you don’t have a trusted ally who can advise and work with you, it might be time to find someone.
Prosperity Advisers Group is an independently owned chartered accounting, business advisory and wealth management practice. Clients partner with Prosperity for strategies to minimise taxes, maximise profit, drive growth and protect their personal wealth.