Small Business: Mental Health Advice for Small Business Owners

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The number of entrepreneurs seeking Dr. Michael Freeman’s help has been climbing since the pandemic upended life in the U.S. “Elevated stress levels, elevated anxiety, and elevated levels of depression are common among people in my practice,” says the Bay Area psychiatrist-psychologist, who since 2005 has focused his practice exclusively on entrepreneurs. “Many have been adversely affected by the pandemic and its many manifestations.”

More than 40{09c3c849cf64d23af04bfef51e68a1f749678453f0f72e4bb3c75fcb14e04d49} of Americans have reported negative mental or behavioral health conditions since the start of the pandemic, according to research released in August by the Centers for Disease Control and Prevention. Freeman is among the mental health professionals around the country concerned about small business owners’ well-being. Beyond the personal toll, entrepreneurs who feel isolated and overwhelmed by forces they can’t control find it harder to make their businesses survive or to hatch new ventures, according to Freeman and other professionals.

Since many who are self-employed or running smaller businesses can’t afford comprehensive health insurance coverage, they need better access to “social and emotional support, as well as everything you normally think of, like loans, debt forgiveness, and tax incentives,” Freeman says. Without these pieces in place, the economic recovery could be hampered: As of late November, the number of small businesses open in the U.S. had decreased by nearly 29{09c3c849cf64d23af04bfef51e68a1f749678453f0f72e4bb3c75fcb14e04d49} compared to January 2020, according to Opportunity Insights, an economic data tracking project at Harvard University.

Small business advocates, including Small Business Majority, which has more than 70,000 businesses in its network, want more attention paid to business owners’ mental health. “When you’re under financial stress, you’re under mental duress,” says Geri Aglipay, who oversees the group’s Midwest operations, as well as its entrepreneurship programs for women. “It impacts the ability to think clearly and to think long-term for stability and sustainability for your business.” Entrepreneurs’ Organization published a post titled “Mental Health Should Be Your Top Priority Right Now. Here’s Why” aimed at its more than 14,000 member entrepreneurs in March. “Entrepreneurs are not known for switching off,” says Carrie Santos, the network’s CEO. “So it’s essential for them to put practices in place to stay centered for the sake of their health and for their business.”

Women and people of color in locales and industries hard hit by the pandemic are of particular concern. Even as they sought to revitalize neighborhoods, while providing for themselves and their employees, they were hampered by decades of systemic racism, redlining, and other forms of disinvestment, says Aglipay. A Federal Reserve Bank of Cleveland report from October shows that minority-owned small businesses have been “disproportionately” affected by the ongoing crisis, facing higher rates of closures and sharper declines in cash balances than nonminority firms.

Aglipay urges public health agencies to do more outreach to make mental health and wellness services more visible in underserved communities, particularly Federally-Qualified Health Centers, which treat both uninsured and insured patients. “They provide excellent services, but not everybody knows they exist,” Aglipay says. And it’s time to expand the pipeline of therapists of color, she says. “Business owners of color want to be seen by people who understand what they’re going through.”

Reducing stigma also is crucial. “People need to know they’re not alone,” says organizational psychologist Cathleen Swody, a partner and director of assessment at Thrive Leadership near Hartford, Conn. “There’s this huge body of people in our country who are struggling,” she says, yet they are reluctant to express any vulnerability. They are constantly managing the impressions they create on their customers, employees, and investors, among others. “They fear that if they express uncertainty or lack of confidence, it may have a ripple effect that adversely impacts the business,” says Freeman.

Research into what makes entrepreneurs tick can help explain why professionals are sounding alarm bells. Freeman, who serves as a clinical professor of psychiatry at the University California, San Francisco’s School of Medicine, has collaborated with colleagues at other universities on work showing that the personality traits of an entrepreneur are distinct from other workers. A 2018 paper Freeman co-authored shows that entrepreneurs are more likely to have some mood conditions than are managers and employees.

Even before the pandemic, small business owners experienced “more stress in general, because they’re responsible for so much: themselves, the sustainability of business, their employees,” says Swody. She warns that if they lean into their independence or stress resilience too much, they can burn themselves out and “not be in an ideal place when making decisions.”

A comprehensive review from August of more than 30 academic studies published about depression among entrepreneurs over the past four decades shows how complex it is to try to determine whether they are at higher risk of depression than other workers. Some studies found higher rates; some found lower rates. It depends on how the question is asked, and the populations being studied, according to review co-author Christine Guptill, an assistant professor at the University of Ottawa. This makes sense because no two businesses—or entrepreneurs—are the same, she says.

The bottom line is that the pandemic has been tough on small business owners, and there simply isn’t “nearly enough” academic research about their mental health, says Guptill. “There should be more.” Guptill, who is also an occupational therapist, says many governments promote entrepreneurship but fail to put adequate safety nets in place to address the risks that come with running your own business. “The minute they’re out of the workplace, they’re on their own, as far as caring for themselves,” she says. “We need to raise a whole bunch of red flags.”

In June, Freeman launched Econa, an online community meant to provide a safe place for entrepreneurs to express their emotions and learn from each other and professionals. Workshop topics have included addiction recovery, ADHD management, and cofounder relationships. In December, Freeman and Guptill participated in a class about depression for about 100 participants with serial entrepreneur John Roa, author of A Practical Way to Get Rich … and Die Trying (September 2020, Viking), who described the experience of undergoing major depressive episodes while running his businesses. Econa has additional classes scheduled for 2021, when it also plans to launch peer support groups.