Small business owners and managers are under more pressure than ever, with soaring stress levels leading to costly errors, worrying new research has revealed.

The study, by Bibby Financial Services, found that over two-thirds of small firm bosses admitted that running their own company was more stressful than working for someone else.

A massive 92 per cent of those polled said that they experience high stress levels on a daily basis, with over a quarter felt under strain all or most of the time.

According to the survey, the widespread anxiety felt by entrepreneurs was having a damaging effect on their businesses, with 68 per cent of those quizzed admitting to taking the wrong decisions while stressed.

Over half of business bosses said they have lost up to £1,000 through errors while under pressure, while three per cent have lost more than £10,000 due to bad decisions because of stress.

As reported by Startups.co.uk, workplace stress has become a major issue for small firms, with studies showing that 6.5 million working days and £1.24 billion is lost a year because of the problem.

Although the government has attempted to tackle the problem by introducing flexible working laws, UK employees still work the longest hours in Europe and take far less holiday time than their continental counterparts.

David Robertson, chief executive of Bibby, said that every day, a quarter of a million people take time off work due to stress and it is now the second biggest occupational health problem, after chronic back pain.

“Stress levels can run particularly high in smaller businesses, where there are fewer members of staff with higher levels of responsibility, tighter margins and where mistakes can prove potentially more damaging to the firm.

“Business owners and managers work harder than anyone else in their firm and are under tremendous amounts of pressure not only to keep their business going, meet their customer’s demands, maintain their cash flow and stay on top of what the competition is up to, but to keep up with governmental legislation and unnecessary red tape.

“The fact that stress affects decision making and ultimately the bottom line, indicates that managers need to learn how to recognise the warning signs of stress, not only within themselves but in their staff as well,” he said.