FreshBooks’ Mental Health Report, In Partnership With Mind Share Partners

Summary

The COVID-19 pandemic brought the world to a standstill in 2020, and after living through it for a year, mental health is now on everyone’s radar. Employers around the world are taking extra care of their employees with extended benefits and coverage of mental healthcare, paid mental health days, and no-meeting Fridays (or even no-work Fridays!). But all these initiatives beg the question: Who is looking out for the mental health of entrepreneurs?

FreshBooks wanted to find out how entrepreneurs have been coping, so we surveyed 2,000 self-employed individuals about their mental health. It turns out, the vast majority of small business owners are doing well in terms of their mental health. While a majority of owners did experience ‘first time’ symptoms of poor mental health during the pandemic, a significant number report that their mental health has actually improved in the past year. This is especially true of owners who actively participate in entrepreneurial communities.

Is Entrepreneurship Really a Lesson in Resilience? 

While 9-to-5ers experienced stress, burnout, isolation, and anxiety about job loss over the last year, entrepreneurs are no strangers to these pressures and uncertainty. Self-employment often is unpredictable, and entrepreneurs are often tasked with mitigating the unpredictability with strategic business practices and fierce determination.

Have the Skills People Developed While Running Their Own Businesses Actually Prepared Them for a Cataclysmic Situation Like, Say, a Pandemic? 

Many of today’s entrepreneurs say that overall—and in spite of the pandemic—they are emotionally, psychologically, and socially better off since becoming self-employed. However, we did see that those affected by mental health symptoms are not seeking or finding the support they need, putting their businesses—and their own well-being—at further risk. Even those who do well mentally are bombarded with news about failed businesses and how small businesses are being forced to close (and reopen) in rolling lockdowns in some regions. 

Shining a Light on Entrepreneurs’ Well-Being

FreshBooks’ Self-Employed Mental Health Report in Partnership With Mind Share Partners aims to shine a light on the mental, emotional, and social well-being of self-employed people in America. In addition to uncovering the specific challenges that many entrepreneurs have experienced during the pandemic, it also delves into potential causes of poor mental health and subsequent effects on a small business owner’s ability to be successful. The report also explores the support and resources available to those who are self-employed and the degree to which people use them. Finally, this report probes the attitudes and perceptions that small business owners have regarding mental health overall. In this report, we only surveyed small business owners who were still actively running their business, and omitted business owners who had ceased operations or took a break from being a small business owner. 

We have also drawn numerous comparisons to a previous, unpublished mental health study that we completed mere months before the COVID-19 pandemic first took hold. This additional data set gives us the ability to analyze how entrepreneurs were feeling before COVID-19 hit, compared to a year into the pandemic. 

While not the focus of this report, it is important to note that the impact of mental health challenges often depends on the context and support systems available. Although many professionals say that certain mental health experiences have benefited them in the workplace, it’s a different situation for entrepreneurs who are often on their own. 

Our hope is that these insights will spark new conversations about the relationship between entrepreneurialism and mental health, and show how resilient small business owners are in the face of uncertainty.

Key Findings: What Entrepreneurs Are Saying About Their Mental Health

In addition, 72% of the small business owners that we surveyed said their mental health was “good” or “very good”. Only 10% of small business owners said their mental health was “poor” or “very poor”. 

The effects of the pandemic on the mental health of small business owners have not been uniform. Nearly as many say they are better off (26%) versus worse off (32%), while 41% report no difference in their mental health since the start of the pandemic.

More than 50% of respondents did experience symptoms of poor mental health for the first time as entrepreneurs. This includes:

About half of owners experiencing one or more of these symptoms say the effects were gradual, culminating over time versus the result of any particular adverse business-related event. One-quarter say they’re not sure when their symptoms started. Among those who’ve recently experienced symptoms associated with poor mental health, 85% of respondents say their day-to-day work has suffered as a result: 

• 49% say their condition made it difficult to concentrate on their business (up from 42% in 2020).
  
• 36% say they put off challenging work (up from 33% in 2020).
• 30% say they became less responsive to emails and other communications (unchanged from previous report).

Self-employed professionals say several factors had a negative impact on their mental health:

• 44% say they experienced financial stress and fear about the future of their business (down from 47% in previous report).
• 29% say working alone most of the time had a negative affect on their mental health (unchanged from previous report).
• 28% say they had concerns about having too much work to do in too little time (down from 33% in our previous report).
• 27% say they feel like they can never show vulnerability or weakness (unchanged from previous report).

In a minority of cases, entrepreneurs report that specific events resulted in poorer mental health:

Most small business owners coping with mental health challenges sought support at least occasionally in the past year. But more than 1 in 10 are going it alone. When asked the last time they sought mental health help, they responded:

When asked what prevents people from accessing mental health support, nearly half (49%) want to deal with their mental health on their own:

Interestingly, women entrepreneurs are more likely to suffer in silence and not seek out mental health support when compared to men.

It Takes a Village: Inside the Small Business Community 

Unsurprisingly, spouses are the go-to person for small business owners when they need support, with 62% of respondents saying they talk to their spouse about mental health concerns. However, entrepreneurs do have other outlets when it comes to talking about mental health concerns: 

Other key support mechanism(s) for entrepreneurs are online and offline small business communities. Our study finds that the 40% of owners who actively participate in communities are significantly better off mental-health wise. Moreover they’re 2-3 times more likely than non-participants to say their mental health has improved since the onset of the pandemic.

Attitudes on Mental Health

Small business owners generally have positive attitudes about mental health, regardless of their own mental health situations. Almost 75% say they and their business partners (where applicable) take workplace mental health seriously. Indeed, more than half say that the pandemic has made them more understanding and empathetic to worker mental health, potentially because of the attention that has been paid to mental health in the media throughout the pandemic.

At the same time, there are notable reservations about hiring people who are experiencing poor mental health. Almost half of small business owners  would be wary of hiring those who struggle with mental health. Moreover, just 60% of small business owners agree that “employees with mental health conditions are as competent as employees without one”. This is a decline of almost 10% from our 2020 study.

Self-Employment as a Pathway To Better Mental Health

Self-employment presents a variety of challenges that can be particularly taxing on mental health. These can include working in isolation, putting in long hours, the stress of being the ultimate decision maker, persistent financial uncertainty, and responsibility for the livelihood of others. 

And yet, more workers than ever consider self-employment to be the new American dream. Studies show that most who make the switch are ultimately happier, as they’re able to exercise greater control over their schedules and have more autonomy over their own careers. These people report feeling more satisfied, more fulfilled, and that they’re in better physical health once they become their own boss. Even during the pandemic, data shows that applications for new small businesses in the U.S. are increasing at the fastest rate since 2007.

But how do these trade-offs play out regarding the mental health of self-employed people? In general, most say they have good or improving mental health, and overall life satisfaction.

What Are the Root Causes of Poor Mental Health Among the Self -Employed?

It’s a fact that self-employment and small business ownership are inherently challenging and risky endeavors. Early-stage entrepreneurs in particular face obstacles that are entirely different from and more acute than those faced by traditional employees. 

This study finds that a variety of day-to-day pressures, versus one-off or external events, contribute most often to poor mental health among the self-employed. We often see that the broader dialogue around mental health focuses on supporting people through specific instances, when the biggest impacts seem to be the day-to-day experiences that cause mental health to deteriorate. In addition, self-employed people also experience few resources to support their mental health. 

Conclusion

Our survey respondents overwhelmingly report improved overall quality of life that comes from being their own boss. While the stats may come as a surprise, they indicate that small business owners are resilient, adaptable, and consistently manage change, even in unprecedented circumstances. This resilience may stem from the unpredictability that comes with owning a business.

It is refreshing to see that entrepreneurs are feeling mentally healthy, however, our report highlights the fact that the onus falls on entrepreneurs themselves to manage their mental health, and that more entrepreneurs need to feel empowered to seek out the help they need.

About FreshBooks’ Mental Health Report in partnership with Mind Share Partners

FreshBooks’ Self-Employed Mental Health Report in Partnership With Mind Share Partners focused on the experiences and perceptions of self-employed Americans regarding their emotional, psychological, and social well-being.

This report aimed to: 

1. Understand what (if any) symptoms of poor mental health affect significant numbers of small business owners 
2. Identify the root causes of poor mental health that stem from running a small business
3. Quantify the effects of poor mental health on owner productivity
4. Probe the support and resources available to the self-employed, how regularly they are utilized, and any barriers they face in getting help       

FreshBooks’ 2021 Self-Employed Mental Health Report in Partnership With Mind Share Partners is based on survey data gathered online from over 1,000 self-employed people and small business owners. This representative sample of independent U.S. workers spans a variety of industries, business characteristics, and owner demographics. Core findings are considered accurate to within +/- 3% at 90% confidence. 

About FreshBooks

FreshBooks is changing the way business owners manage their books. Its owner-first accounting platform, loved by businesses in over 100 countries, takes an easy-to-use approach to managing finances, billing, payments, and client engagement. FreshBooks, known for its 10x Stevie award-winning customer support, serves customers of all sizes from offices in Canada, Croatia, Mexico, the Netherlands, and the U.S.

About Mind Share Partners:

Mind Share Partners is a nonprofit organization based in the U.S. that is changing the cultur
of workplace mental health so that both employees and organizations can thrive. It builds public
awareness, hosts communities to support ERGs and professionals, and provides workplace
training and strategic advising to leading companies. Mind Share Partners runs two columns on
workplace mental health in Forbes and Thrive Global and has been featured in Harvard Business
Review, The New York Times, TIME, Fast Company, The Wall Street Journal, and others.
Learn more at www.mindsharepartners.org.

PR Contact:

Katey Townshend

pr@freshbooks.com