Business
The Emotional Tax draining South Africa’s small business owners
Ask any South African small business owner how they’re doing, and you’ll likely get the same answer: “Busy.”
But beneath that word sits something heavier. A quiet cost. A toll that does not appear on balance sheets or tax returns.
New research from accounting software company Xero has put a name to it. They call it the “Emotional Tax,” and it is hitting entrepreneurs across the country harder than many realise.
When your business never switches off
According to Xero’s latest Emotional Tax Return report, based on a survey of 300 South African small business owners, 95 percent say the current financial year has been more stressful than the last.
More than half admit they are sacrificing personal time just to keep things running. Me time disappears first. Then sleep. Hobbies. Holidays.
For many, the workday does not end at five. It stretches into the evening, into weekends, into family dinners. Running a small business becomes a 24-hour commitment, one that seeps into every corner of life.
Colin Timmis, Regional Director EMEA at Xero, says that while the strain is real, so is the passion behind it. Many business owners believe the stress is worth it. Sixty percent say the pressure is balanced by a strong sense of purpose.
That tension between strain and dedication is what Xero describes as the Emotional Tax: the hidden personal cost paid each year to see a business succeed.
The sleep crisis behind the shopfront
The research paints a stark picture of exhaustion.
Seventy-seven percent of owners say they are getting less sleep since launching their business. More than a third report losing four or more hours a night. Exercise routines fall away. Sixty-four percent say they have reduced or stopped making time for physical activity.
When stress builds, half of entrepreneurs respond by working even longer hours. Late nights become normal. Survival mode sets in.
Clinical psychologist Dr Marc Rogatschnig warns that many founders are operating under constant threat, reacting to financial and operational pressures in ways that are unsustainable in the long term. Without deliberate effort to protect their well-being, burnout becomes a real risk.
The cost in lost productivity
This is not just about feeling tired. It has measurable consequences.
The Emotional Tax is silently costing South African small business owners an average of 33 working days of productivity each year. That is more than a full month lost to stress, worry, and mental fatigue.
Over a quarter of the working week, roughly 11 hours, is spent feeling stressed or concerned about the business.
Eighty-seven percent say their professional performance has suffered. Missed opportunities. Slower decision-making. A drop in confidence. Avoidable mistakes. Reduced creativity.
In a country where small and medium enterprises play a critical role in job creation and economic growth, this kind of productivity loss is not just a personal issue. It is a national one.
Why South African entrepreneurs feel the squeeze
Context matters. South Africa’s business environment is not an easy one. Load shedding, rising costs, regulatory pressure, and tight consumer spending have created a climate where small businesses must constantly adapt.
In this environment, founders often carry the emotional weight alone. They are an employer, an accountant, a marketer, and a crisis manager all at once. It is no surprise that many report feeling permanently switched on.
Yet there is a hopeful thread in the data.
Image 1: Business Tech
Fighting back against the Emotional Tax
Ninety-two percent of business owners say they are actively taking steps to manage their well-being.
Almost half are focusing on self-care. Others are carving out time for family and friends. Some are returning to exercise, turning to mindfulness, or escaping into entertainment to recharge.
A growing number are also trying to simplify operations. On average, business managers spend 39 hours a month managing finances. Xero suggests that automating tasks can free up valuable time, creating space for rest, hobbies, and proper breaks.
The message is clear. Thriving businesses should not require broken founders.
As Timmis puts it, entrepreneurs should not have to sacrifice their well-being to succeed. The relief is that many are already recognising this and taking action.
Image 2: Business Tech
A different kind of bottom line
Perhaps the real story here is not just about stress but about identity. South African small business owners are driven by resilience and heart. They believe in what they are building. That belief keeps them going, even when the hours stretch long.
But purpose should not come at the cost of health.
If there is one takeaway from this research, it is that mental and emotional well-being are not luxuries. They are business assets. Protecting them may be the smartest investment an entrepreneur can make this year.
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Source: Business Tech
Featured Image: BVSA – Accounting and Financial Services
