Starting and running a business can be one of the most thrilling endeavours, but it’s also one with the highest prevalence of hardship and mental health challenges.

All jobs have their stress-inducing moments and stamina-demanding requirements, but these are so marked among entrepreneurs that it has led to the coining of a distinct term: founder depression.

In 2015, Dr. Michael Freeman, a psychiatrist and researcher at UC San Francisco, conducted a study that revealed stark differences between the general population and business owners. Startling statistics from this investigation showed that up to 72% of entrepreneurs surveyed self-reported mental health issues, in contrast to only 48% of comparison participants. 

Freeman found that entrepreneurs were 50% more probable to report having a mental health breakdown, twice as likely to suffer from depression, and three times more likely to struggle with substance abuse.

In a podcast with The Future Farm, Freeman shared that conducting this study was particularly resonant because of his own experiences as an entrepreneur. Over the past few years, the numerous suicides of individuals whose businesses seemed to be soaring, or at least stable, has indicated that the profession can be unbearably taxing. It can be both exhilarating and exhausting, even when the funds in the bank keep rising.

Reality check

Anxiety and depression are mental health disorders common among entrepreneurs.

Numerous factors – physiological, personality, logistical and environmental – contribute to this prevalence.

Individuals who start businesses are often able to do so because they are achievement oriented. This positive trait can, however, have a downside where it's difficult for them to slow down, take a break, or even step down.

The road to success is often paved with obstacles that make hard days even harder. Founders must deal with financial hardships, the loss of key team members, and/or social marginalisation, among other forms of adversity. Further, the ability to launch and manage profitable new businesses can be hampered by exogenous shocks such as we experienced in South Africa recently with the Covid-19 pandemic, the looting in KwaZulu-Natal, load-shedding and large increases in interest rates. Stress is hard for entrepreneurs to avoid, and poorly managed high levels of stress can lead to mental health challenges such as anxiety and depression.

Additionally, most entrepreneurs have economic difficulties such as lower initial earnings, lower earnings growth, and lower long-term earnings, which lead to greater financial stress and worry. This results in a causal relationship between financial stress and worry.

When it feels like the outcome of either success or failure sits on the shoulders of a founder, this often means sleep, physical exercise and good nutrition are neglected in favour of putting in more hours, energy and focus. Enlisted because of their potential short-term benefits, these choices can have long term disadvantages.

Abnormal norms

In most societies and industries, mental health in general is a sensitive topic. It’s sometimes wrongly associated with weakness. For achievement-oriented people who become entrepreneurs, admitting mental health struggles can be seen as an admission of impairment or incapability that could potentially reduce investor confidence and stakeholder trust.

This combination of self-imposed expectations and societal pressure makes it difficult to talk about and then treat episodes of depression, anxiety or suicidal ideation.

Although it seems to be slowly changing, the start-up grind psychology leads to harmful practices prompted by popular phrases such as “while they sleep we grind”. Choices like forfeiting meals, always being available, neglecting family and friends, abandoning exercise, and constant analysis of business statistics become badges of honour. Instances of normal hard work or periods where sacrifices and compromises need to be made become an expected pattern of behaviour in toxic hustle culture. This glorification of constant work makes it challenging for entrepreneurs to distinguish between dedication and harmful overwork that can lead to burnout.

Every stage of the business journey comes with its own demands so it can be difficult for entrepreneurs to afford themselves a break. At the beginning, requirements that are impossible to ignore and risky to phase in slowly include securing investors, creating a viable business model, limited assets to use as collateral to get loans, navigating a constantly changing environment, and establishing a customer base.

When businesses are established and successful, the demands on an entrepreneur now include scaling up, building and managing larger teams, maintaining company culture, adapting to market changes, sustaining growth, and dealing with increased competition. Over years, and sometimes even decades, it can be difficult to identify the right time to decrease or stop the hustling.

Because failure is a constant threat, entrepreneurs can put themselves under too much pressure. An unintended consequence of this is mental health disorders which can then negatively impact functioning and potentially lead to failure.

Business owners can find a middle ground by reflecting on their well-being, setting clear boundaries, and understanding that breaks from work enhance productivity rather than hinder it. It can also be helpful to understand that while stress is inevitable for entrepreneurs, constant hustling doesn’t guarantee success.

Another helpful approach can be asking venture capitalists and other providers of capital to hold entrepreneurs accountable for their wellbeing since depression and anxiety hamper the survival of a start-up. And a start-up failing costs funders money.

Determining the course

Many entrepreneurs that we consider successful today have a failed venture in their past. Still more are currently running a business vastly different to the one they anticipated or initially dreamed of. Every founder has had to deal with losses small and large, changes that they planned and those that came unexpectedly, and pressures sparked both internally and externally.

To survive the turbulence and vagaries of the profession, it's essential to accept that varying forms of failure are inevitable. Reframing these experiences, however, can make them tolerable, and even beneficial. Identifying the lessons and then determining next steps can position failure as a learning opportunity and not just a catastrophe. Even when it’s difficult to find solutions that can salvage a tricky situation, it’s possible to take actions such as seeking mentorship, signing up for a short course and attending therapy. These might not have a direct or measurable impact on the bottom line, but they may make entrepreneurship tenable.

Kristin Neff, an associate professor of educational psychology at the University of Texas and author of Self-Compassion: The Proven Power of Being Kind to Yourself suggests a strategy for dealing with hard times. “Self-compassion involves acting the same way towards yourself when you are having a difficult time, fail, or notice something you don’t like about yourself. Instead of just ignoring your pain with a ‘stiff upper lip’ mentality, you stop to tell yourself, ‘This is really difficult right now, how can I comfort and care for myself in this moment?’”

Another practice that can be very helpful is connecting with other entrepreneurs either remotely in the form of books, podcasts, and videos, or in person through networking events, community groups, or even just reaching out to a friend.

Humans are social animals. We are wired for stories, and emotional relief can be found in the stories of other people’s successes and adversities. These can elicit new perspectives and lead to creative solutions and bold ideas. Hearing other entrepreneurs' experiences normalises challenges and can foster a sense of belonging, which has been shown to be therapeutic.

Despite its difficulties, entrepreneurship is a worthwhile pursuit. It allows for innovation, self-expression, the possibility of financial freedom, and making a difference in society.

Entrepreneurs have the chance to turn their visions into reality. This process of creation can be deeply satisfying, and it is a reason to keep going when the going gets tough, and to seek help when the tough times feel unbearable. Success isn’t measured solely in revenue. Sometimes pivoting, downsizing or closing a business aren’t markers of failure but steps towards survival.

Strategies for mental health

In order to better manage their mental health, entrepreneurs can try todo the following:

  • Decrease the belief that poor self-care leads to entrepreneurial success and that poor mental health is a badge of honour for entrepreneurs.
  • Increase self-care activities, such as exercise, sleep, meditation, and talking about their mental health.
  • Accept that failures and setbacks are a natural part of entrepreneurship, and that the vulnerability that comes with seeking professional help when needed is a sign of strength.
  • Manage time effectively to ensure work-life integration. Employ stress-relieving techniques and consider therapy or coaching for additional mental health or wellbeing support.
  • Prevent burnout by setting boundaries, recognising signs of mental and physical exhaustion, and prioritising wellbeing.

Out of the ordinary 

The rigours of entrepreneurship can lead to feelings of frustration, disappointment, sadness or defeat. There are, however, occasions when these normal emotions do not abate and lead to either depression or anxiety. Both affect the ability to run a business, so they are worth noticing and addressing. 

Depression symptoms can vary in severity and may include: 

  • Prolonged feelings of unhappiness or tension, and a persistent sad, irritable or restless mood.
  • Loss of interest and pleasure in activities or hobbies, as well as decreased energy.
  • A bleak outlook on life and future that leads to feelings of hopelessness or pessimism.
  • Physical symptoms such as aches, pains, headaches, cramps, or digestive problems without a clear physical cause and/or that do not ease with treatment.
  • Impaired judgement, difficulty concentrating, remembering, or making decisions, and trouble with focusing.

Common anxiety signs and symptoms include:

  • Feeling nervous, restless, or tense, and constantly being on edge.
  • Having a continued sense of impending danger, peril, or doom even during days of good business and achievements.
  • Sudden physical changes such as heart palpitations or accelerated heartbeats, hyperventilation, sweating and visible shivering or shaking.
  • Trouble concentrating or thinking about anything other than the present worry.
  • Avoiding places, events or certain thoughts because they might trigger strong feelings.

If you or someone you know exhibits these symptoms consistently, it's essential to consult with a mental health professional for appropriate assessment and potential treatment.

South African Depression and Anxiety Group (SADAG): 24-hour helpline – 0800 567 567

Dr. Frank Magwegwe is a permanent faculty member at GIBS. He lectures on corporate finance, employee wellness, personal mastery, resilience, and quantitative principles and widely consults in these areas. He is also a trusted financial wellness expert who is a regular contributor to newspapers and magazines and a frequent guest on radio and TV shows. Tune in to his show on Wednesday evenings from 20h15 – 21h00 on Radio 702.


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