Research by the company found that 83% of those surveyed experienced stress in the past six months, with almost half (49%) saying they had been much more stressed than usual. And 17% described themselves as 'highly stressed'.
Managing staff (42%), heavy workloads (37%), admin (35%), the decline of the High Street (34%), feeling personally responsible for the success of the company (31%) and uncertainty surrounding Brexit (18%) were the most common causes of small business owners' stress.
Despite workplace mental health being high on the news agenda, nearly a third (28%) admitted they are too busy to think about mental health in the workplace, and almost half (48%) agreed they could be doing more.
Forty-one per cent said the stress of running a business was causing them sleepless nights, while a fifth (21%) said they were drinking more alcohol and 13% said they were having more arguments at home. Eleven per cent said they have cancelled social plans or declined invitations, while 7% have started binging on junk food and stopped exercising.
Despite high levels of stress, 47% said being their own boss was the most enjoyable part of running a small business. The same amount identified being able to improve their work/life balance and another third said it was being able to get things done the way they wanted.
The research by Xero coincides with the launch of Business is Personal, a new book on mental wellbeing in the workplace by being business wellbeing expert, Penny Power OBE.
Penny Power OBE said: "I learned first-hand that mental health is as critical as physical health. The process I went through of self-awareness was fundamental to my personal wellbeing and success. Business people focus on their skills and building a network, but very few understand their own vulnerabilities. We all have to deal with challenges and modern living that can be overwhelming but learning to self-care and learning how to manage our minds can be the difference between living a happy and successful life, or not."
Anne Allen, director of people experience at Xero, said: "Running a small business effectively in testing times is doing about doing the small things well, streamlining administration and tax compliance, and using technology to simplify business management. Our study shows SMEs do feel the pressure of changing times, but work environment with the right technical, emotional and personal support can ease the strain."