With the end of the financial year looming, advisors will be checking in on their small business clients, reviewing their finances and the “health“ of their businesses. But it is also an ideal time to check in with the business owners (and encourage them to check in with themselves), particularly around their mental health.
In December 2022, the Treasury released a report “Small Business and Mental Health - Through the Pandemic” (“the Treasury Report”), which reported that 22% of small business owners had recently been diagnosed with a mental health condition by their doctor. This number was as high as 1/3 or more of business owners in certain industries such as manufacturing, hospitality, retail and construction.
In 2024, the Australian Chamber of Commerce and Industry’s National Business WHS Survey showed that this number had increased to 34%
In my experience, there is often a link between financial difficulties and mental health issues. For example, financial difficulties often lead to increased stress, which has an adverse effect on mental health. On the flip side, people who are experiencing mental health problems often have difficulty dealing with their financial affairs due to their lack of energy, inability to concentrate, or feelings of being overwhelmed. These can often lead to poor financial decisions, potentially resulting in a downward spiral.
It is no secret that small businesses have experienced tough times in recent years. Natural disasters, the pandemic, lockdowns, labour shortages, interest rate rises, and cost of living increases are just some of the challenges they have faced. Your daily newspaper, nightly news bulletin, and social media feeds are constant reminders of the uncertainty in the global economy.
These types of events can lead to business disruptions, reduced revenues and in many cases increased business debt levels. But what about the impact on the owners?
They are often tasked with not only managing the business but also working in it as well. Some of the pressures small business owners face, even in favourable business conditions:
Long hours,
The weight of being responsible for the well-being and livelihoods of not only themselves and their business but also their employees,
Managing cash flows and debts,
Red tape and compliance issues,
Economic and business cycles that can turn on a dime,
And changing economic conditions.
The increased stress and demand on owners can have a real impact on their mental health. The common theme I have observed is that business owners are feeling overwhelmed!
So, how do we help? As trusted advisors, we have a role to play in providing support to our clients who may be experiencing mental health struggles. It’s important to be aware of and look out for warning signs that your clients may be struggling with their mental health.
It is also key to know what support services are available so that you can confidently refer clients to these services. Here is a list of some of the services available:
Ahead for Business (providing mental health resources and tools),
Ahead for Business: Mental health support for small business
NewAccess (free mental health coaching provided by Beyond Blue).
NewAccess mental health coaching - Beyond Blue - Beyond Blue
If you are not coping, and things become too overwhelming, please make an appointment to see your GP or contact Lifeline (13 11 14), Beyond Blue (1300 224 636) or Mensline (1300 78 99 78)
You may even consider undertaking certified mental health training, such as the Counting on U Program (which I completed in 2021 and highly recommend), or other Mental Health First Aid courses (Mental Health First Aid Australia | For Anyone. For Everyone.).
Here is a refresh of my top 10 tips for small business owners and individuals to help improve their mental health, which you may want to share with your clients;
Know your current financial position - keep your accounts up to date, prepare cash flow budgets and know where your business is at. The sooner you're aware of financial issues, the better placed you are to address them and the more options you’ll have available to you. You can’t make good decisions without good information.
Seek help early – if you are experiencing financial difficulties, it is likely having a negative impact on your mental health. Speaking to your advisors and addressing the situation early will help minimise the impact on your mental health. The head-in-the-sand approach/ignoring the issue will likely only increase your stress and lead to feelings of overwhelm and anxiety. Also, having support and assistance to find a solution will relieve some of the stress and pressure.
Set goals - start with small, achievable, short-term goals, like a daily checklist, or even just making your bed every morning, then build up to bigger, longer-term goals. Feeling like you’ve achieved something, big or small, will have a positive effect on your mental health.
Delegate – where appropriate, delegate and/or outsource to release some pressure on yourself and free up some time to focus on things outside of the business, including some of the below habits to improve your mental health.
Connect – reach out to family and friends and let people support you through tough times. You are not alone, and talking to your support networks can not only help ease the burden, but just purely connecting with friends and loved ones will generate positive feelings.
Sleep well - aim for at least 7 hours a day of good quality sleep. Practice good sleep routines like maintaining regular bedtimes and wake-up times, and reducing screen time at least 30 minutes before bed.
Exercise regularly – this can help enhance your mood and increase your energy levels (thank you, serotonin and endorphins). Even just 30 minutes of walking every second day will make a noticeable difference.
Eat a balanced diet and drink lots of water - a well-balanced diet and staying hydrated improve concentration and decision making. It also assists with good quality sleep (see point 5) and helps regulate mood and emotions. On the flip side, an unhealthy diet can contribute to fatigue and increased symptoms of mental health conditions.
Practice mindfulness and gratitude – try some relaxation, meditation or breathing techniques that may help you switch off, and practice gratitude to remind yourself of the positives and blessings in your life.
Prioritise self-care - making time for yourself should be a non-negotiable. It might be a hobby, a sport, reading a book, journaling, or simply getting a massage. Try to at least once a week to do something you enjoy, something that makes you feel good.
At Worrells, we are passionate about supporting business owners and individuals and pride ourselves on providing insolvency and restructuring solutions that put people first. Please contact your local Worrells office should you have a client who requires assistance with their financial circumstances. We would be more than happy to review their situation and discuss a range of options that may assist.
Finally, my inbox is always open if you ever need to chat.
