AI helping ease stress for Australian small businesses

By Parth Prabhudesai

New research commissioned by Xero has revealed the growing emotional and operational pressure facing Australian small business owners, with nearly one-third considering walking away from their businesses because of stress.

The survey, conducted online by One Picture on behalf of Xero, gathered responses from 500 Australian small business owners and senior decision-makers from firms employing up to 200 people. According to the findings, 31% of respondents said they had thought about leaving their business due to stress, while 38% described their current stress levels as very or extremely severe.

The report highlights how deeply business pressures are affecting personal wellbeing. Nearly three-quarters of respondents said they struggled to switch off from work, 58% admitted hiding stress from family members or partners, and 43% said they had withdrawn from social activities. Additionally, 34% reported losing more than five hours of sleep each night because of business-related concerns.

Economic uncertainty emerged as one of the biggest drivers of anxiety, with more than a quarter of respondents saying they were very or extremely worried about the impact of the economy on their business in the coming financial year.

Despite the challenges, many business owners remained committed to entrepreneurship. Around 69% said the stress was either worth it or that they would never consider walking away from their business.

Dr Luke Martin, Clinical Spokesperson at Beyond Blue, said many business owners often fail to recognise how strongly their work affects their wellbeing.

“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,” 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.”

Tax season was identified as another major source of pressure. Around 28% of respondents said tax time was more stressful than the rest of the year, with fears around making mistakes, fines and paperwork topping the list of concerns. More than a third admitted delaying tax filing until the last minute, while 29% avoided meetings with accountants or bookkeepers.

The survey also found that stress was having a measurable impact on productivity. On average, owners estimated stress cost them more than four hours of productive work each week, equivalent to roughly 29 working days annually.

Technology appeared to offer some relief. Among the 73% of respondents using artificial intelligence tools in their operations, 65% said AI had reduced stress levels during the financial year, while 61% said it had made tax time easier to manage.

Charlie Sheppeard, Executive General Manager of Strategy and Operations ANZ at Xero, said the findings demonstrated the urgent need for support systems for small businesses.

“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,” said Sheppeard.

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