New research reveals stress is no longer just emotional - it's a measurable economic risk for U.S. small businesses
SAN MATEO, Calif., Feb. 12, 2026 /PRNewswire-PRWeb/ -- New research released today by global small business platform, Xero, reveals that the hidden emotional toll of running a small business has become a measurable economic risk. Xero's Emotional Tax Return 2026 Report shows that financial pressure, fatigue and avoidance are costing U.S. small business owners an average of 33 working days of productivity each year.
Based on a survey of hundreds of U.S. small business owners, the data confirms that financial stress is not just confined to tax season, but instead has become a year-round emotional burden impacting owners' wellbeing, productivity and confidence. On average, owners spend eight hours a week consumed by worry.
The business risk of burnout
Sustained pressure is rapidly evolving from a personal struggle to a business risk. With 70% of owners identifying financial management as a stressor, the burden has become so heavy that 40% have considered giving up their business entirely.
This dread is triggering a concerning business response: inaction. Rather than tackling finances head-on, stress is causing owners to freeze—putting their cash flow at risk. The tangible costs of this paralysis are significant, with nearly three-quarters (74%) of owners reporting that stress has negatively impacted their work, causing them to miss opportunities (34%), stifle creativity (30%) and delay decision-making (28%). Without real-time visibility into their numbers or regular input from a trusted advisor, owners struggle to manage cash flow effectively, leaving them vulnerable to financial shocks.
"Ongoing financial stress has become a persistent and defining factor in how small businesses operate," said Andrew Kanzer, Managing Director, North America at Xero. "When pressure around cash flow and rising costs continually drain owners' time, focus and decision-making capacity, they effectively become a hidden operating cost. By reducing business admin, automating key accounting tasks and streamlining collaboration with advisors, Xero helps small business owners feel more confident in their numbers and start reclaiming that emotional tax."
The silent struggle
While the business impact is visible in the books, the personal toll often goes unseen as many owners suffer in silence. The findings reveal the impact of carrying business stress in isolation:
- Isolation: Nearly half of small business owners (43%) say they have hidden business-related stress from their family or partner, while many report withdrawing from social or professional support when pressure is high.
- Sleep deprivation: Over half (61%) of owners say they get less sleep than before starting their business, with nearly a quarter losing five or more hours of sleep a night.
- Sacrificing self-care: To cope with the load, 41% report exercising less, with some stopping altogether.
Reclaiming control and reducing the emotional tax
U.S. small business owners currently sacrifice an average of 22 hours a month to financial management — time that often fuels anxiety rather than insight. However, the research highlights a clear exit opportunity from this avoidance trap.
"What strikes me most as a financial therapist is how many small business owners are carrying financial stress on their own," said Megan McCoy, Ph.D., LMFT, AFC®, CFT™. "When financial stress goes unspoken, it becomes more damaging. Hiding worry from loved ones, losing sleep and neglecting self-care only increases the emotional toll over time. Normalizing these experiences and encouraging support earlier can improve both personal wellbeing and business performance."
Xero can help owners reduce stress, feel more confident and avoid tax-time surprises by combining digital tools with trusted advisor support. By using automation to remove the friction of manual tasks, and leaning on experts to navigate uncertainty, small businesses can replace year-round dread with confidence and feel empowered to make better data-driven decisions throughout the year.
The full Emotional Tax Return 2026 report is available here.
About Xero
Xero is a global small business platform that helps customers supercharge their business by bringing together the most important small business tools, including accounting, payroll and payments — on one platform. Xero's powerful platform helps customers automate routine tasks, get timely insights, and connect them with their data, their apps, and their accountant or bookkeeper so they can focus on what really matters. Trusted by millions of small businesses and accountants and bookkeepers globally, Xero makes life better for people in small business, their advisors, and communities around the world. For further information, please visit xero.com.
Media Contact
Xero US | Rola Tfaili | [email protected]
Survey Methodology
Xero commissioned One Picture to conduct an online survey with 300 independently recruited U.S. small business owners with fewer than 200 employees. Data has been weighted to be as representative of the small business market as possible.
For more information on our research methodology or to access full data tables including all answer options and question text, contact [email protected].
Media Contact
Rola Tfaili, Xero, 1 (613) 2550991, [email protected]
SOURCE Xero
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