Business Mentors New Zealand works with some owners who are suicidal. Photo / Getty Images
Business Mentors New Zealand works with some owners who are suicidal. Photo / Getty Images
Many owners underestimate how much work goes into running their own small firm, research finds.
Being a small business owner is a lonely position to be in says the new chief executive of Business Mentors New Zealand.
Around 850 new businesses are established across the country every month and of the 400,000 small businesses in New Zealand, 70 per cent of those - around 280,000 - are one-man bands with no staff.
"That's a lot of people working out of garages or working in their spare room and that's where the isolation issue comes in," Craig Garner, who was appointed head of Business Mentors in June, said.
Garner said the not-for-profit organisation, which mentors 25,000 Kiwi businesses, worked with some business owners who were suicidal.
"We've done a bit of research and it's interesting that statistically we've discovered 80 per cent of businesses have identified isolation as their biggest problem."
Not having a guaranteed pay package or colleagues to bounce ideas off was a common reason many small business owners felt lonely, Garner said.
Research shows 30 per cent of businesses fail within two years of starting, and close to 170,000 SMEs are concerned they will not ever be in a position to retire.
Garner said thousands often self-sabotaged their own success.
"Kiwi businesses not only fear failure but they fear success," he said.
"It's a Kiwi trait, it's that tall poppy syndrome. We're afraid that if things get out of hand or if we get too much success it is going to become too hard."
Many business owners underestimated how much work would go into running their own firm, he said. "If most people knew what they were in for they wouldn't get into business themselves because it requires a lot of dedication, a lot of challenges and generally a lot of financial hardship."
Small businesses generate 28 per cent of New Zealand's GDP.
BusinessNZ chief executive Kirk Hope said Business Mentors' research was consistent with feedback it had received from its own small business members.
"The fact they usually bear sole responsibility for the success or failure of their business – that is a lonely place to be," Hope said.
"Often a small business will be funded by the business owner taking a mortgage out on their house. Relying on your home equity to fund a business that may or may not turn a profit is a high-stakes, stressful situation for anyone to be in."
High workloads, poor work life balance and stressful work are the top causes of poor mental health in the workplace, according to the Mental Health Foundation.
"Connecting is particularly important for the wellbeing of small business owners who may feel isolated and lonely," Mental Health Foundation chief executive Shaun Robinson said. "High or long term stress, isolation and loneliness will undoubtedly have negative impacts on mental wellbeing which may manifest as things like burnout, anxiety and depression."
Craig Garner, chief executive of Business Mentors NZ. Photo / Supplied
Garner said SMEs underestimated the importance of having a business plan.
"It's the age-old story; plan, plan, plan. The reality of it is if you've got a plan things get into perspective and when it's in perspective it's more controllable," he said.
Having a mentor and support network to rely on was crucial, he said.
"We're business mentors but we don't go in and mentor a business, we go in and mentor a owner, and a big part of being in business is your emotional resilience.
"You've got to understand where your limitations are. Sometimes you need someone outside looking in at you to say 'you're really good at this, not so good at this'.
