Xero sees 'emotional tax' on small business from financial stress

Small business owners are losing the equivalent of 33 working days a year due to financial stress, according to a report released Thursday by small business accounting software maker Xero.

The company's Emotional Tax Return 2026 Report polled a group of 300 U.S. small business owners with fewer than 200 employees and found that 81% of them said their work has been more stressful than in previous years. The main contributors to their financial stress were rising costs (44%) and unpredictable demand (28%). On average, the business owners who responded to the survey spend eight hours a week consumed by worry, and nearly three-quarters (74%) say stress has negatively impacted their work.

Visualization created with AI assistance based on original reporting.

Some 40% of the respondents said they have considered giving up their business entirely, while 34% said stress has caused them to miss opportunities, 43% admitted hiding business-related stress from their partner or family, and 61% reported getting less sleep than before starting their business, with nearly a quarter losing five or more hours of sleep per night. Other impacts of financial stress included stifled creativity (30%) and delayed decision-making (28%). To deal with the stress, 41% of the small business owners polled reported exercising less, with 3% admitting they stopped exercising altogether.

"Ongoing financial stress has become a persistent and defining factor in how small businesses operate," said Andrew Kanzer, managing director for North America at Xero, in a statement.

Over one-fourth (28%) of the business owners surveyed report being short-tempered with others when they are stressed, while 11% now spend their time "doom-scrolling" on their phones, negatively impacting their productivity.