March 11, 2019

Emotional exhaustion caused by role ambiguity and work-family conflicts can lead many entrepreneurs to leave or close their companies, even when the ventures are profitable, says a Ball State University researcher.

“Every founder or owner has to exit the business eventually, but the tipping point occurs when emotional exhaustion is simply too much for the individual to handle,” said Michael Goldsby, executive director of the Institute for Entrepreneurship and Free Enterprise at Ball State. “Emotional exhaustion is a key predictor of exit intention among small-business owners. They are simply worn out and need a break. So, the company — no matter how successful — will be shut down.”

Are Work Stressors and Emotional Exhaustion Driving Exit Intentions Among Business Owners?” is an analysis of surveys of 400 entrepreneurs in the United States and Australia. It was published in the Journal of Small Business Management in 2018. In the U.S., role ambiguity had the largest effect on emotional exhaustion, followed by work-family conflict. In the Australian sample, the pattern was reversed.

“Many entrepreneurs start a small company and are in charge of a variety of matters,” Goldsby said. “And as the firm grows, the issues expand, but the owner may not want to let go and begin delegating.

“Working too many hours leads to family conflict. So does hiring a family member because they need work but simply are not qualified.”

Goldsby said the results are consistent with recent research which finds that work-family conflict has a stronger effect on women, who traditionally bear more family responsibilities at home, and causes them to leave their businesses.

In order for business owners to avoid a pitfall, Goldsby advises them to focus on the human side of the business.

“The entrepreneur shapes the business, but the business also shapes the entrepreneur,” he said. “And if the entrepreneur doesn’t change as the business grows, or they aren’t prepared to act differently, there’s going to be a breaking point. Either the business, the entrepreneur, or both are going to struggle. For people, that’s called emotional exhaustion.”

Goldsby also urges entrepreneurs to seek out a mentor, coach, or therapist who can help with the mental and personal developmental side of being an entrepreneur.

“The entrepreneur has to develop, and if they don’t, it’s going to be a tough road,” he said. “Good support networks, good coaches, and good mentors help. That’s why you see a lot of family businesses. Previous generations went through something and can coach up the next generation. They can turn to them when they’re facing the same types of challenges. The good family businesses probably had that going on.”