Founder Burnout and the Impact On Your Bottom Line

We’ve all seen the headlines: “This CEO Gets Up at 4 AM and Works Out at Lunch” or “How This 22-Year Old Launched a Startup While Working a Full-Time Job.”

Even though it’s clickbait, these articles are attractive because they glorify the startup hustle.

What happens when you can’t keep going? Even the smartest and hardest-working founders are only human—no one can give 110% forever. The inevitable result is founder burnout, which goes far beyond physical exhaustion.

In this high-stress environment, burnouts regrettably happen all too often. It’s quite alarming to note that 30% of startups fail, frequently due to personal hardships, including overwhelming stress and fatigue among founders.

Founder burnout can directly impact a company’s bottom line. It has also been estimated to cost billions of dollars annually. Founder burnout is not just a personal hurdle. It’s a phenomenon that can impact the growth and success of today’s startups.

The productivity drain of founder burnout

Many people assume longer hours equal greater output.

The problem is, these extra hours aren’t always productive hours. Research from Stanford University has shown productivity falls dramatically after working for 50 hours in a week. After, working 55 hours in a week, this output plummets.

A little bit of extra time in the office each day can be a great way to cross items off your to-do list. Working 70 hours a week is no more productive than working 55 hours each week.

A two-year study published in the International Journal of Environmental Research and Public Health found that seemingly harmless after-work activities do more harm than good if they’re connected to your job. Without proper detachment, people are unable to fully recover from work each week.

Founders who don’t detach and give themselves time to recover from each workday experience reduced work performance, ultimately resulting in a drain on the company’s overall output.

The Corporate Executive Board, which represents 80% of the Fortune 500, found that those who believe they have good work-life balance work 21% harder than those who don’t.

All of this unproductive time in the office has a significant impact on a company’s bottom line. Gallup found that unproductive workers are costing United States businesses $550 billion per year.

In contrast, authors such as Jacob Morgan have found that organizations that promote a better work-life balance, including reasonable working hours, have four times higher average profits, two times higher average revenues, and 40% lower turnover. Their stock prices also outperformed the S&P 500 and the Nasdaq.

Less work, more work-life balance

Longer weeks may sometimes be inevitable. There are still are a few steps you can take to promote a greater work-life balance:

1. Turn off your push notifications: Your smartphone allows you to take work home with you, which can be both good and bad. Try turning off your push notifications for things like Slack and email. Or you can get a business phone system to use for professional purposes. From professional auto attendant to nationwide unlimited calling, a phone will make things easier for you and shield you from some unwanted distractions.
2. Get physical: Physical activities are associated with a positive effect on a person’s ability to recover from work and improve sleep quality. So hit the gym, walk your dog, or climb stairs. Carve out time to add some physical activity to your work week.
3. Spend time with people outside your industry: Spending time with other startup founders can be great for networking, but it can turn your social life into just another aspect of work. Make time to hang out with people outside the startup ecosystem to truly separate your work and social lives.
4. Take a vacation: Everyone needs a break at some point and that includes you. If your desktop time tracker tells you that you work too much, you should listen to it. Get out of the country or plan a weekend staycation in your city. It doesn’t matter, just give yourself a reprieve from the day-to-day grind.
5. Let go of the work FOMO: Most people associate FOMO with social events. The same mindset can apply to work. Let go of this nagging feeling that there is always more you could be doing. Simply accept that what you’ve accomplished is good enough for one day.

The Myth of the Multi-Tasker

It isn’t always long hours that lead to founder burnout. In many cases, burnout is the result of trying to do everything, rather than delegating or outsourcing responsibilities.

Many founders may think that their ability to “do it all” is what drives their success. They couldn’t be more wrong. As neuroscientists Dr. Cynthia Kubu and Dr. Andre Machado have discovered, humans are wired to be mono-taskers. They argue that “just 2.5 percent of people are able to multitask effectively.” It’s unlikely startup founders are the multi-tasking unicorns they think they are.

The failure to properly delegate or outsource tasks can be particularly problematic for startup founders. As Martin Zwilling, Founder and CEO of Startup Professionals, points out, failing to delegate means you waste more time working on projects that are outside your skill set and comfort zone.

Take the example of bookkeeping. Many startup founders try to tackle the books on their own, despite no knowledge or expertise in the area. In-house bookkeeping alone costs founders over 10 hours per month (120 hours per year), and this is just one example of administrative work that can easily be outsourced.

Lack of delegation can also suggest you don’t trust your team to produce the desired results. It’s easy to see how this kind of situation can leave startup founders exhausted, paranoid, and susceptible to burnout.

Many people who have experienced burnout have the question of how to deal with this condition and not fall into it again. Some users note that health roster has helped them a lot. Thanks to this roster, it is also very easy to manage medical staff and monitor your health in one click

On the other hand, a willingness to delegate or outsource tasks can actually improve a company’s bottom line. According to a Gallup study, CEOs who were talented delegators posted three-year growth rates that were 112 percent higher and generated 33 percent greater revenue than those with a limited talent for delegation.

Understanding what is bookkeeping in accounting is essential for startup entrepreneurs. It helps them grasp the potential advantages of assigning or outsourcing this responsibility. Successful entrepreneurs who embrace the concept of burstiness realize that by entrusting bookkeeping and other peripheral tasks to their team, they can tap into a range of expertise and gain new insights.

This strategic decision can result in improved business outcomes by allowing them to concentrate on their primary strengths and decision-making, while avoiding the challenges of attempting intricate financial work without adequate knowledge and experience.

Mastering the Art of Delegation

Handing over the baton is not always easy. For the reluctant-delegator, there are a number of helpful tips for letting go.

1. Do what you do best: It’s important to prioritize the things that only you can do. While leadership and big-picture growth cannot be delegated, administrative tasks such as bookkeeping and web design development can be outsourced.
2. Find the right people: If you’re going to hand off an important task, make sure you give it to the right person. Everyone has different strengths and there’s likely someone out there better suited to the task that you were fumbling your way through.
3. Take time to set expectations: When delegating, make sure everyone is on the same page. Set clear expectations from the start so you can get the results you’re looking for without sacrificing your own time.
4. Leave room for your own personal growth: Delegation is a useful leadership tool. You should also when it may be worth your time to learn something new. For example, some tech founders may find it’s worth learning to code to better communicate with their product teams. Consulting an accountant may be a much better use of a founder’s time than attempting to master the US tax code.

The physical and mental toll

Ask any startup founder how they manage to work so hard. They’ll simply shrug and tell you they “work well under pressure.” There’s truth in that statement. Most experts would agree, acute stress (meaning short-lived stress), primes the brain for improved performance.

The kind of pressure faced by startup founders goes far beyond that of the average person. Unfortunately, most entrepreneurs live with chronic, all-consuming stress stemming from the belief that failure is simply not an option. This constant state of anxiety inevitably takes its toll on founders both physically and mentally.

According to a study by researchers in California, “mental health concerns have been reported across 72% of entrepreneurs, compared to a mere 7% of the general public.

The notion that entrepreneurs are four times more likely to suffer from mental health concerns than the general population has led to what’s been termed the “Founder’s Blues.”

Research has also shown that stress not only exacerbates many chronic conditions, but it can also impair immunity and lead to further physical ailments.

In tackling stress, it’s not just about keeping calm and carrying on, particularly for those at the helm of startups. Finding enjoyable and effective methods to unwind is crucial. Now, here’s a rather splendid idea – have you considered trampolining? Indeed, it’s not just a bit of a lark for the children. Trampolines are great for improving your mental health.

Engaging in a spot of bouncing is not only jolly good fun but also remarkably beneficial for releasing those endorphins – our body’s natural pick-me-ups. It’s a splendid way to take a breather from the relentless pressures of entrepreneurship, and it doubles as a top-notch form of exercise.

So, incorporating a trampoline session into your regular routine might just be the ticket to maintaining a fine balance between work and a bit of well-deserved leisure.

Therefore, it comes as no surprise that the physical and mental toll of burnout has financial implications for growing companies. Dealing with mental and physical conditions often leads to unscheduled absenteeism, which the workforce solution company Circadian estimates costs roughly $3,600 per year for each hourly worker and $2,650 each year for salaried employees.

Beyond simply a dent in a company’s finances, Fortune magazine found that 30% of startups fail completely due to the emotional state of their founders.

Healthier founders, both physically and mentally, are necessary for the successful growth of a company. Countless studies have shown investments in workplace wellness programs lower insurance premiums, operating costs, and reduce absenteeism and presenteeism (the act of attending work but being less productive due to poor health). The health of a founder and their team is a key driver behind the success and growth of a company.

Mental health is health

Workplace wellness programs are great for employees. Founders often need to take more drastic steps to escape the relentless stress of running a startup.

1. Start with self-care: Whether it’s taking yoga classes or simply letting yourself sleep in on the weekends, small acts of self-care can be a good way to start making your physical and mental health a priority.
2. Talk to a professional: Talking to a professional is one of the best ways to address entrepreneurial anxieties head-on. Even for those with limited time or money, there are virtual counseling services such as TranQool or TalkSpace that can help founders connect to a therapist without leaving the office.
3. Start an honest conversation: There’s no doubt that mental health is still taboo in many circles—especially tech. But if you feel comfortable enough, sharing your feelings with other founders can help start a conversation. Sharing your experiences can help you feel less isolated in what you’re going through.

Founder burnout doesn’t have to derail your startup

There’s no doubt that running a startup is a tough job. It takes a lot of passion, determination, and hard work. The bulletproof founder who works all hours of the day, handles every project, and thrives under pressure, is a myth. In reality, this grueling lifestyle often leads to burnout, poor health, and your mood affecting productivity.  

Founder burnout is not inevitable. Thwarting burnout certainly won’t happen overnight. Take steps to find a better work-life balance, delegate tasks, and combat stress head-on. It’ll help to stop burnout before a company turns to ashes.

Katherine Pendrill is the Content Marketing Specialist at OpenDigits, a cloud bookkeeping solution for startups. By combining industry-leading software with the expertise of real accountants, OpenDigits takes care of the bookkeeping so that startup founders can focus on scaling their businesses.