MIND Your Business: tackling the mental health crisis in entrepreneurship

By Professor Pablo Munoz and Marieshka Barton, January 2024

Professor Pablo Munoz, Professor in Entrepreneurship, and PhD candidate Marieshka Barton explore the complex relationship between entrepreneurship and mental health. 

The relationship between entrepreneurship and mental health is paradoxical. It offers extreme rewards and stress, producing conditions for both wellbeing and ill-being. For example, entrepreneurship has the potential to create intrinsic rewards essential for wellbeing, such as achieving autonomy, a sense of meaningfulness, feelings of success, and personal development. Yet, what gets entrepreneurs to engage in entrepreneurial activity can constitute the very same source of ill-being. High workload, risk, and isolation inevitably lead to high levels of stress and eventually chronic ill-being such as depression.  

The evidence is out there. Entrepreneurs in general exhibit higher rates of depression, anxiety, mental disorders and suicide. A 2018 study on the prevalence and co-occurrence of psychiatric conditions among entrepreneurs showed that they experience more depression (30%), ADHD (29%), substance use (12%), and bipolar disorder (11%) than comparative participants. Entrepreneurs believe that the associated depression is caused by the increasingly complex and competitive world they operate in. 

Entrepreneurship support organisations (incubators, accelerators funding agencies, etc.) have tried to address these mental health problems, yet the support offered might not be as positive as it seems, because it clashes with the very same services provided by these organisations. Take business incubation for example, as a central support mechanism in any entrepreneurial ecosystem. The main mission of incubators is to support venture development. To do so, they offer training and mentoring, which promotes a very specific set of skills and mindset that’s assumed to propel new venture development. Entrepreneurs are encouraged to persist, take risks, and be optimistic about the future. While important to foster entrepreneurial intentions and actions, research has found that these programmes often trigger negative emotional responses as protection in anticipation to potential failure. 

The design of support programmes should include activities to mitigate mental health issues and decrease anticipated negative emotions from new venture creation. Recently, some programmes have begun to integrate counselling services and mindfulness training in response to these problems. Yet, these are offered on the side, not as an integral part of the business development process. This is complicated because support programmes, like those offered by incubators and accelerators, can end up playing a dual role, creating the problem and selling the cure. This isn’t just a problem of incubators and accelerators. The entire support ecosystem surrounding entrepreneurs seems to be ill-equipped to address the problem.    

Something was missing 

In February 2022, we decided to tackle this issue head-on. For 18 months, we worked collaboratively with six entrepreneurs and two County Durham-based organisations (MINT Business Club and Celebrate Difference ADHD) offering business, social, and emotional support to entrepreneurs, self-employed, and small business owners. We wanted to co-develop a refined understanding of the mental health experiences of entrepreneurs and co-create an intervention to mitigate potential negative effects. 

In our research, we found mismatches between expectations and experiences at three interacting levels – purpose, autonomy, and achievement – which surface as entrepreneurs reflect on execution, performance, and fulfilment experiences. Mismatches materialise as incongruence between the ideal states under pursuit and the entrepreneurs’ actual experiences, which compound, leading to a diminished sense of control, direction, and worthiness. These in turn fuel a cycle of negative emotions involving anxiety, isolation, shame, and guilt. In this sense, our findings suggest that it’s not the stressful experiences or heavy workload themselves that trigger negative emotions. Rather, it’s the compounding of incongruences between expectations of ideal states and actual experiences at the level of purpose, autonomy, and achievement. 

What’s problematic about this process is that it affects the entrepreneurs’ self-worth. This is different from self-confidence and self-esteem, which focus on confidence stemming from competence in a targeted area and externally determined cumulative self-perception. Self-worth is an individual’s evaluation of themself as a valuable, capable human being deserving of respect and consideration, which develops over time, forming stable conceptualisations of self, with implications for psychological functioning. The deterioration of self-worth is particularly problematic in entrepreneurship. It affects how entrepreneurs value and describe themselves. Entrepreneurs with diminished self-worth can engage in rumination displayed by criticising themselves and their abilities. They rarely welcome compliments and tend to focus on mistakes, leading to negative judgments and overly critical evaluations of their entrepreneurial performance, and their value as both entrepreneurs and human beings. A diminished self-worth may lead them to avoid challenges, achieve less, and withdraw from social contact. Ultimately, frequent and intense self-flagellation leads to chronic ill-being, which is more enduring and challenging to treat. 

What are we doing about it? 

Equipped with this knowledge, we decided to turn the process on its head and develop an intervention we call MIND Your Business. MIND Your Business is a 6-week support programme that aims to support struggling entrepreneurs and small business owners. The programme equips participants with the necessary tools to counter the cycle of negative emotions and foster a compounding of positive congruence to improve self-worth. Early evidence suggests that the impacts are largely positive. Entrepreneurs feel that they now have “a space and time to think about how to make positive changes to help both my mental health but also my business.” The training is changing the way entrepreneurs think about work, employment and business. “It's so person-centred, and that's the thing with business owners, if the whole thing is set up centred on the person, their strengths and values, then it's also set up for success.”