New Zealand’s small business owners are facing increasing levels of stress, with three-quarters reporting the current financial year has been more challenging than previous ones, according to a new report by Xero. The findings highlight a growing emotional toll on those running small enterprises, extending beyond financial pressures into personal wellbeing.
The Xero’s Emotional Tax Return report identifies rising costs as a primary driver of stress for 48% of respondents, while 30% attributed their increased anxiety to unpredictable demand. These pressures are not confined to working hours, with the report revealing a significant impact on business owners’ personal lives.
“Running a small business is hard work, and business owners often have to make significant sacrifices – missing a child’s swimming sports or working all hours and not getting enough sleep,” said Bridget Snelling, Xero New Zealand country manager. “This represents what we call an emotional tax – the hidden personal costs small business owners have to pay every year.”
The complete of the financial year appears to exacerbate these issues, with almost half (42%) of business owners finding this period more stressful than the rest of the year. Practical concerns contribute to this heightened anxiety, as 34% of respondents reported needing to chase paperwork, and 31% worried about making errors. A substantial 54% had been surprised by a tax outcome, with the majority of those surprises being unfavorable.
Xero’s Snelling emphasized the importance of proactive preparation during this time. “Proactivity is crucial during the period to help get on top of things and avoid any unwanted surprises,” she stated.
The stress experienced by small business owners is as well impacting productivity. The report found that owners lose an average of five hours of productive work each week – equivalent to approximately 30 working days annually. Beyond lost work time, the physical health of business owners is also suffering, with 55% reporting reduced sleep since starting their business, and a further 12% losing five or more hours of sleep per night.
Mat Pedley, a business owner, highlighted the critical role of support networks in navigating these challenges. “Support was absolutely pivotal” to his ability to continue operating, he said, according to a report in the NZ Herald. Pedley, who experienced a health scare, credited his love for the hospitality industry and the backing of his wife, friends, and team for helping him persevere. He emphasized the importance of having a support network, whether through the business community or personal connections.
The findings come as broader economic pressures impact New Zealand businesses. Recent reports indicate rising stress levels across the small business sector, with concerns about inflation and economic uncertainty contributing to the challenges faced by owners. A recent report from ecommercenews.co.nz noted rising stress levels for small business owners, while NZBusiness Magazine highlighted the pressures felt at the end of the financial year.
Xero has also advocated for supporting New Zealand-made products to bolster the local economy, suggesting that increased local purchasing could inject billions of dollars into the New Zealand economy, as reported by ThePost.co.nz.