With businesses still dealing with the ongoing aftermath of pandemic lockdowns, and now facing new financial threats from the cost-of-living crisis, we set out to research the impact this has had on the mental health of business owners in London.
Our research polled 366 small business owners in London and the South East to help us understand what fears they’re facing, and how this has affected their behaviour, happiness, energy, productivity, and concentration levels, as well as their appetite to continue running a business in the future.
Do London business owners really have a better work-life balance?
A fifth (20%) of businesses surveyed in London cited a desire for better work-life balance as a motivating factor for starting their own enterprise. This isn’t the only thing that self-employed workers are striving for, with:
- 23% launching their own business for financial reasons
- 19% hoping to further their personal development.
These figures highlight entrepreneurs are taking control of their own working wellbeing, rather than relying on employment to achieve their ambitions.
When asked to identify what they found most challenging about working for someone else before becoming self-employed, the most commonly reported answer (13%) was feeling under-appreciated by their employer.
It suggests that a lack of appreciation, however shown, can be a powerful force with a demoralising impact on London’s workforce. Some entrepreneurs also said that working for a poorly managed organisation was another trigger.
- Not feeling appreciated: 13.34%
- Poorly managed organisation: 12.71%
- Not enough scope for development: 12.62%
- Can’t earn desired salary: 10.56%
- Lack of control over workload: 9.58%
- Lack of creativity: 9.31%
- Long hours: 9.13%
- Difficult relationship with boss: 6.98%
- Lack of support from manager: 6.98%
- Pressure to perform: 4.83%
- Fear of being laid off: 3.04%
The positive impacts of starting a business
Business startups are often launched with the promise of better days coming, more money, and more freedom. Asked what they were hoping to achieve by launching their business, most SMEs were looking for greater flexibility, the potential to earn more, and more outlets for interesting and creative work.
- More flexibility: 17%
- Increase earning potential: 14%
- Better work life balance: 13%
- More autonomy: 12%
- Increase opportunities for personal development: 11%
- Provide a creative outlet: 9%
- Improvements in mental health: 8%
- More variety day to day: 8%
- Less daily stress: 7%
Happily, the vast majority – 92% – of London based business owners found that launching their own startup did have the positive impact they were looking for, though a quarter of those also found it much harder than they expected.
Common challenges included the stress of supporting themselves financially (a third), and 15% finding it more difficult to switch off than before now that they were responsible for their own employment.
It highlights the crucial importance of robust research and business planning when considering the launch of your own startup.
Tips for launching your business
It all boils down to research, research, and research. Whilst it’s a daunting prospect, understanding the potential pitfalls of a business goes a long way towards helping businesses minimise the impact of issues, and lays the foundations for success! Some points to consider include:
- Is there anyone else running a business similar to yours? If so, how are you better, different, more appealing, unique? These are points that will help you stand out when drumming up work for your new startup.
- Take the time to do your sums. Getting a solid understanding of your costs and potential earnings, and what actions you can take if things don’t go according to plan, can ease some of the worry.
- It’s also well worth taking the time to plan how your cash flow will work (literally, the flow of cash in and out of your business). This makes sure that you have cash available to pay bills on time, so hopefully you won’t need to stay up all night worrying.
- Make a list of absolutely everything that you need to launch your business, and then be ruthless in filtering it down to things that you really need, things that would be nice, things that can wait a while… and so on.
- You can use your financial reports to monitor this on a regular basis as the business progresses too; for instance, to see if you are incurring costs for things which you no longer need at this stage, or that are not as effective as you hoped. It helps you make decisions about your spending, and maximise those all-important profits.
Find more help and support for your London-based business in our information centre.