May 17, 2023
4 mins

The Impact of the Cost-of-Living Crisis on Business Owners

Key take away points:

  • How the cost-of-living crisis has impacted on the mental health of business owners
  • Support information for those in need of advice or guidance
  • Examples of ways to ease financial pressure on your business

The last few years have been some of the toughest we have seen in our lifetime and for many self-employed people, the impact can be even more intense. Building and growing a business in a thriving economy brings plenty of pitfalls and stresses, but doing so throughout a pandemic, recession and cost-of-living crisis that is largely out of your control takes those challenges to another level.

For Mental Health Awareness Week 2023, mental health charity, Mind, are focusing on the impact of the cost-of-living crisis on our mental health.

At Bluestone we work with UK business owners to help them fund growth and manage their financial strategy more effectively, and as Mind is one of the charities we support on a regular basis, this week’s blog highlights how the cost-of-living crisis is damaging the mental health of business owners, as well as some tips and practical solutions that may provide support during tough times.

Rising costs, rising stress

Businesses of every size across a wide range of sectors are facing:

  • Reduced revenue because customers are reducing their spending.
  • Interest rates increasing on mortgages, credit cards, loans, and overdrafts.
  • Increasing energy costs and the cost of supplies/materials eating into profit margins or forcing price rises – potentially losing customers in the process
  • Staff requests for pay rises in line with cost of living.
  • Cash flow issues.
  • Lack of funds to replace broken or old equipment affecting quality of service/product and efficiency.
  • Tax bills to pay like self-assessment, corporation tax, or the cost of professional indemnity insurance.

Mind’s website has plenty of information about the ‘2-way link between money and mental health’:

‘This crisis is hitting everyone from all directions with a speed and severity we’ve not seen in decades. It’s hard to overstate how big an impact this is going to have on our mental health. This is an emergency. An emergency everyone needs help to deal with.

‘We’re already clear that poverty and mental health problems have a 2-way link that needs to be broken. If we’re not careful, this crisis will push more people into that cycle. More people are experiencing mental health problems because of this crisis. And people who already had a mental health problem are struggling more. We just can’t let that happen.’


Mental health problems can affect the way you deal with money in several ways. If you’re feeling low or depressed, you may lack motivation or energy to manage your finances. You might make impulsive financial decisions, or poor mental health might prevent you from managing your financial responsibilities effectively or making decisions that generate profit, reducing your income.

In addition, you might find yourself avoiding doing things like opening bills, communicating with creditors, or checking your accounts to stay on top of your money.

All this can worsen money problems leading to feelings of anxiety and panic, and worrying about money can lead to sleep problems.

You may not be able to afford to not only operate or grow your business, but you may also stop spending money on basic essentials like nutritious food, housing, water, heating, or medication. You might feel lonely or isolated, potentially hiding the extent of your money problems from loved ones, which will impact your social life and relationships.

Mental Health at Work

Mental Health at Work, a programme led by the Mental Health at Work Leadership Council and curated by Mind, has partnered with Simply Business to improve the level of mental health support available for UK small business owners.

They recently surveyed over 700 small business owners (conducted by Mental Health at Work and Simply Business) and found that 56% have experienced poor mental health in the last 12 months, but 45% wouldn’t seek support for their mental health.

In the same survey, 51% reported feelings of stress, 39% say they have suffered with anxiety, and almost one in four (23%) have experienced insomnia. Depression (20%) and loneliness (19%) were also shown to be common.

Getting the right support

“Running a business can be very stressful. We encourage SME owners to form a ‘well-being plan’, akin to a business plan. Focusing on what your wellbeing intentions are for the business; how will you support your own and your employee’s mental health? It is unsurprising that business owners prioritise financial success, rather than their wellbeing […]

“Getting therapeutic support for stress does not mean waiting until crisis point. Those that have a strategic, proactive approach to managing stress find it easier to intervene early, which means that signs of impaired well-being are recognised before they become problematic. This is where accessing independent, qualified therapeutic help can be the game-changer.” 

British Association of Counselling and Psychotherapy website


Further information and support on coping with the cost-of-living crisis: Mental Health Awareness Week – Mind

British Association of Counselling and Psychotherapy

Find a mental health professional near you: Contact BACP

Mental Health at Work Support for Small Businesses

For practical tips, support and advice for you or your employees, click here

Easing financial pressure on your business

It is also worth exploring financial solutions (with fixed interest rates) that may ease pressure on your business’ cashflow.

  • Asset finance may enable you to invest in equipment that your business needs without parting with a large chunk of cash, i.e., spreading the cost via fixed affordable payments.
  • Invoice finance can unlock cash tied up in unpaid customer invoices.
  • Cashflow loans can be used to bridge a monetary gap, e.g., paying wages, covering bills, giving more financial breathing space.
  • Tax loans can be used to spread the cost of your self-assessment or corporation tax bills over time.

If you would like to explore any of these financial solutions to see if they could give your business’ finances a boost and take some of your stress away, contact our team for a no-obligation conversation about your options.

Remember, without the owner and their employees, businesses no longer exist, and having a healthy business is much more than numbers on balance sheet. When you invest time in your mental health by seeking appropriate support and prioritising your wellbeing, you are also investing in your business’ future.

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