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Pandemic taxes small business and mental health


Ongoing financial stress and instability due to coronavirus impact and restrictions is taking a psychological toll on small to medium business owners. Accessible and affordable mental health and financial counselling could help them through the crisis, argues Tania Tonkin.

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Ask any psychologist and they will tell you one of the biggest triggers for stress and anxiety is change and uncertainty.

Clearly the COVID-19 pandemic is an extreme challenge in this regard, and many of us have been pushed well beyond our comfort levels – especially those running a business.

We have only to look at Victoria to see the real scale of this catastrophe. Research reported in the Herald Sun last week shows nearly seven out of ten managers and owners are now concerned about their state of mind and ability to cope.

In South Australia we’ve been lucky enough not to face the same nightmare scenario as our friends over the border, but recent reports from Flinders University show high spikes in mental health issues across the state, with three quarters of those surveyed saying their wellbeing has been negatively affected.

The fact that we are not doing quite as badly as other states doesn’t lessen the urgent need for more targeted mental health support for our own small business sector.

For many the burdens are just getting heavier by the day as they try to stay afloat. Soon small to medium enterprises (SMEs) and sole traders will face more changes. New JobKeeper 2.0 rules come into play in just a few weeks and these may negatively impact some businesses if they can’t fulfil the criteria. In addition, borders to other states are likely to reopen soon (creating fears of another outbreak), and there are still a raft of new workplace regulations and tax reporting obligations to manage.

It’s really a wonder the small business sector seems to cope as well as they do. However, scratch beneath the surface and all may not be what it seems.

We rarely see the real effects of SME and family business stress – I suspect it is under reported. Most suffer in silence. For some there are high levels of debt to ensure in a lower cashflow environment, with owners often struggling to meet their obligations.

While repayments for office rent or house payments can be halted for a while, they cannot be stopped forever. Soon family arguments emerge about paying the mortgage, the car loan, or the school fees (all linked to the business). Often everything personal in a business owner’s life is intrinsically linked to the success of the enterprise – one card goes down and the whole pack follows.

Constant anxiety is the new normal

It is easy to see how anxiety and rumination starts. Worry thoughts occupy the mind. My staff are fine now on JobKeeper, but what happens in a few months? What happens if I don’t qualify now for JobKeeper 2.0? My overheads are still high and customer confidence is fickle, things can change at any minute … what then? What happens if I need to suddenly shut down again? How can I keep up with all this reporting paperwork, my tax obligations? What about the workplace laws if I have to lay someone off?

This is the way many SME owners in South Australia are living day to day.

Over the past six months I have helped many through these dark days and I have seen more than a few experiencing very significant mental health issues. They try to battle them on their own, but they are often in denial. It’s difficult to continue to be upbeat about the future when we don’t know which way it will go, or how long this will last.

Many business owners believe facing failure or hitting difficulties is something to be ashamed of (believe me: it isn’t). Facing the fact that they could now be suffering from some common mental health issues like anxiety or depression is too much. Feeling so out of control is just not something most of them are accustomed to. Nor is seeking help.

I believe we need less talk of pivoting, and more practical, tangible programs to provide these business owners with tailored support, including mental health assistance and carefully designed counselling for SMEs.

I see this as a program that assists with stepping through things like basic HR regulations, JobKeeper requirements, legal obligations in regard to leases, e-commerce solutions, basic cash flow management and business planning.

However, what must underpin this is an effective agency responsible for encouraging business owners and their families to consult with mental health professionals in a manner that doesn’t involve jumping through hoops, or handing over hundreds of dollars (remembering that visits to a clinical psychologist are not fully refundable at present).

A small business rebate for evidence-based mental health programs, or even a government backed ‘special task force’ to address these issues wouldn’t be out of the question. Neither would a formal small business mentoring scheme with key business professionals extending their support and advice to those doing it tough.

Make no mistake, this issue is a ticking time bomb, the impact of which we may not see for months to come. Typically, SME owners , many of them older males, don’t seek help until it reaches an extreme crisis point.

We need to normalise these COVID-related issues more, talk about them openly, and really encourage all business owners to take ongoing care of their mental health and to seek professional advice to effectively manage some of pressures they face.

Tania Tonkin is a director at dmca advisory, a financial adviser and chartered accountant.

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