Xero warns of stress crisis for Australian small businesses

Xero has published research showing that 31% of Australian small business owners have considered walking away from their business because of stress, while 38% described their current stress levels as very or extremely severe.

The findings point to widespread strain on owners' working and personal lives. Nearly three-quarters said they could not switch off from work, 58% had hidden business stress from their family or partner, 34% were losing more than five hours of sleep a night, and 43% were withdrawing from social activities.

Economic uncertainty emerged as a major factor, with more than a quarter of those surveyed saying they were very or extremely concerned about how the economy would affect them in the next financial year.

Despite the pressure, many owners remained committed. Among respondents, 69% said the stress was worth it or that they would never walk away.

The emotional load

The research was based on an online survey of 500 small business owners or senior decision-makers at Australian businesses with up to 200 employees. It was commissioned by Xero and conducted by One Picture.

Dr Luke Martin, Clinical Spokesperson at Beyond Blue, said the findings reflected a pattern many business owners experience but do not always recognise directly.

"Running a business has a way of slowly taking over more of your life than you ever planned. When you're responsible for everything, it's easy for time with friends and family, the things you enjoy, or even basic rest to slip down the list. Most business owners don't choose that on purpose. It just happens when you're trying to keep things afloat," said Martin.

"When something takes up such a big part of your life, it's not separate from your wellbeing - how things are going in your business really shapes how you're feeling day to day. That's why it's important to take stock from time to time. Pause and ask: what have I been trading off lately? What matters to me that I've stopped making time for? Often, just noticing those gaps can point to small, doable ways to course-correct."

Tax time strain

The survey found that 28% of owners regarded tax time as more stressful than the rest of the year. Their main concerns were making a tax mistake, anxiety about fines, and the burden of paperwork.

Those worries appeared to shape behaviour. More than a third said they delayed filing until the last minute, while 29% avoided meetings with their accountant or bookkeeper.

Unexpected tax outcomes were also common, with 69% of small business owners reporting a surprise. In more than half of those cases, it meant either a larger-than-expected bill or a smaller refund.

Stress also appears to carry a measurable business cost. On average, owners said it was costing them more than four hours of productive work each week, which the report equated to about 29 working days a year. Financial management alone accounted for about 21 hours a month.

Technology and support

The research suggested some owners were finding relief through technology. Among the 73% who said they had adopted artificial intelligence in their day-to-day work, 65% said it had reduced their stress during this financial year, and 61% said it had made tax time less stressful.

When asked what would help most, respondents first pointed to greater predictability and control over finances, followed by tools that reduce administrative work and save time.

Charlie Sheppeard, EGM of Strategy and Operations ANZ at Xero, said the survey showed how deeply pressure was affecting owners.

"Running a small business takes a real emotional toll on owners. They are absorbing it personally, and our data shows it's costing them sleep, relationships and, in many cases, the headspace they need to run their business effectively. But more than two-thirds say it's worth it or they'd never walk away. That kind of commitment deserves to be taken seriously, and it's why recognising and responding to the emotional load of running a business matters," said Sheppeard.

"The economic uncertainty small businesses are navigating right now is real - more than a quarter of owners told us they're very or extremely concerned about what the next financial year holds for them. That context means EOFY arrives with a lot already on owners' plates, and with Payday Super starting on 1 July, there's a new compliance obligation landing at an already pressured time of year. For owners who are feeling the strain, working with an accountant or bookkeeper can take some of the uncertainty out of it - and that alone can make a meaningful difference."

Xero said it is working with Beyond Blue to help small business owners access mental health support during one of the most demanding periods of the financial year.