Introduction

Politicians and policy makers have emphasized the importance of small business growth for job creation and economic growth (e.g., Davidsson, 2004; Henrekson & Stenkula, 2009; Morrison et al., 2003). Indeed, small businesses with fewer than 10 employees constitute 93% of all firms in Europe, underscoring the crucial role of micro-enterprises in European economies and job creation (European Commission, 2019). Small-businesses can also drive innovation and foster competition, as noted by, for example, Farè (2022) who found that among innovative firms in Europe, a non-negligible share consisted of small-businesses with fewer than 10 employees. However, scholars have recognized that the extent to which small businesses thrive and become successful partly depend on the owners’ health (Little et al., 2007). While previous studies have demonstrated that there is a general relationship between small-business ownership and various aspects of well-being (e.g., Fors Connolly et al., 2020; Johansson Sevä & Öun, 2015), Lechet and Torrés (2017) conclude that not much research has addressed how different work activities and aspects of running a small business affect the owners’ health and well-being. In this study, we address this research gap by examining whether and how variation in satisfaction with different aspects of running a small business are related to small-business owners’ subjective well-being. We also compare these relationships with those between satisfaction with aspects of private life and small business owners’ subjective well-being. Answers to the questions raised have important implications for how to understand these relationships, as well as for policy decisions and regulations that would affect the conditions for small-businesses and subsequently for small-business owners’ health, subjective well-being, and quality of life.

Subjective well-being (SWB) has been proposed to be a key outcome when assessing welfare of societies and citizens’ quality of life (Helliwell et al., 2016; OECD, 2011). SWB is a multi-faceted construct assessed by self-report methods (Brülde 2007; Busseri & Sadava, 2011; Busseri & Quoidbach, 2022; Diener, 1984; Tov, 2018). A common distinction is made between life satisfaction (LS) and emotional well-being (EWB). LS refers to a cognitive judgment of satisfaction with life or domains of life, whereas EWB refers to the aggregated balance of positive and negative affect that people experience in everyday life. This study also contributes to the wider research literature on SWB by highlighting the differences in the relative importance of its cognitive and emotional components. Further light is thereby shed on their unique features and underscores the need to consider both.

While many previous studies have investigated SWB among small-business owners (SBOs), the bulk of the studies focuses on differences between SBOs and wage earners (for reviews, see Binder & Blankenberg, 2021; Stephan, 2018). SWB is generally found to be higher among SBOs than among wage earners, but very few of the studies have investigated potential differences in SWB among SBOs. It has thus not yet been settled whether there are differences in the degree to which aspects of running a small business is associated with SWB. An exception is an event-based mixed-method study reported by Lechat and Torrès (2017). The results showed that stress and satisfaction were correlated with salient events identified in self-employed entrepreneurs’ working activities. An extensive list of specific events was compiled including, for instance, increase or decline in commercial activity, firing or hiring an employee, or gaining or losing a client. In contrast, our study attempts to identify SBOs' satisfaction or dissatisfaction with broader, more permanent aspects of their business activities. Such aspects are in turn influenced by many different events in their everyday working lives. As an example, firing or hiring an employee is one of several events that is likely to be associated with satisfaction or dissatisfaction with employee contacts.

Wiklund et al. (2019) suggested that in small-business research increased attention should be given to the multi-faceted nature of SWB. While few previous studies of SBOs have measured both LS and EWB, in a survey of Swedish SBOs Fors Connolly et al. (2021) analyzed the relationships between the size of small businesses and both SWB components, as well as potential mediators of these relationships. By fitting a structural equation model, they showed that financial satisfaction mediates the positive relationships that business size has with LS and EWB and that time pressure mediates the negative relationship business size has with EWB. In this study we present additional analyses of these data with the aim of investigating whether different aspects of running a small business are related to LS and EWB. More specifically, we investigate the relationships satisfaction with revenues, profits, contacts with employees, contacts with customers, and working hours have with LS and EWB. Lechat and Torrès’ (2017) derived their hypotheses about the influence of affect from Affect Event Theory (Weiss & Cropanzano, 1996). In contrast, we do not focus solely on affect-related aspects. Consistent with the results of Fors Connolly et al. (2021) we propose that aspects associated with financial satisfaction such as revenues and profits should primarily be related to LS, while satisfaction with employees, contacts with customers, and working time should primarily be related to EWB. This conjecture is grounded in the theoretical framework put forth by Kahneman et al. (2006). These authors argue that when making judgments about LS, individuals primarily consider their broader life circumstances (e.g., income), even though these factors are seldom the focus of their daily life. In contrast, EWB is more closely tied to the specific activities people partake in on a day-to-day basis. Thus, when SBOs assess LS, they often include financial status as a key component of their overall life circumstances. On the other hand, EWB is more sensitive to the specifics of their daily work life, including the amount of time spent working and the nature of interactions with employees and customers. These immediate, daily experiences have a direct impact on their emotional state, making them more direcetly tied to EWB than to LS.

SBOs often enjoy increased job autonomy, job satisfaction, and life satisfaction. Managing a small business can still be challenging, as described by Prottas and Thompson (2006) as a "double-edged sword". Existing research indicates that SBOs generally work longer hours compared to salaried employees (Parasuraman & Simmers, 2001), encounter greater job demands (Nordenmark et al., 2012; Prottas & Thompson, 2006), and face increased work-family conflicts (Johansson Sevä & Öun, 2015; Nguyen & Sawang, 2016). Corroborating these findings, Fors Connolly et al. (2020) demonstrated that SBOs experience higher time pressure than their wage-earning counterparts. Additionally, prior studies focusing on wage earners have found that positive moods during leisure time are more important for SWB than mood during work (Fors & Brülde, 2017). However, given the potentially more central role work plays in SBOs' lives compared to wage earners, the question arises whether satisfaction with running their business contribute more to SBOs' SWB than satisfaction with family and leisure activities.

To summarize, in line with the general aim of this study to increase knowledge of how SBOs’ degree of satisfaction with various aspects of running a small business are related to SWB, its specific aims are to test the following hypotheses: (1) SBOs’ satisfaction with revenues and profits are predominantly related to LS, while their satisfaction with contacts with customers, contacts with employees, and working time are predominantly related to EWB? (2) SBOs’ satisfaction with running their business is more strongly related to LS and EWB than satisfaction with aspects of their private life.

Method

Sample and Procedure

The sample was provided by the Swedish Federation of Business Owners who recruited participants from their internet panel consisting of 3,715 SBOs in Sweden. No ethical approval was required in line with the local regulations since no personal information (all data were anonymized) was handled. Data collection took place over a span of three weeks, starting on September 19, 2017, and finishing on October 6, 2017. An invitation email dispatched to all 4,323 panel members yielded a total of 1,208 participants, corresponding to a response rate of 32%.

The participants completed an online questionnaire consisting of 109 questions. We retained 614 participants who answered all questions suitable for the data analyses. Since questions were asked about contacts with employees, small-business owners with no employees were excluded. All data analyses were conducted using SPSS version 28. The demographic profile of the sample is presented in Table 1.

Table 1 Descriptive statistics of the sample
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Questionnaire and Measures

In the online survey, questions were asked about the participants’ satisfaction with performance of their business, work environment, and private life. We only analyze answers to the questions described below about satisfaction with aspects of running the business, satisfaction with aspects of private life, life satisfaction (LS), and emotional well-being (EWB).

To measure satisfaction with running their business, participants were asked “How satisfied or dissatisfied are you with the following aspects of your business?” For each of five aspects (contacts with customers, contacts with employees, working hours, revenues, and profits) participants rated their satisfaction on a scale from 0 to 6 with the endpoints labelled “very dissatisfied” and “very satisfied”. Parallel measures of satisfaction with the private life were obtained for each of five aspects (family, friends, leisure, health, and economy).

Life satisfaction (LS) was assessed with the Satisfaction with Life Scale (SWLS) which is frequently used to measure life satisfaction (Diener et al., 1985; Pavot & Diener 2008). The scale consists of five statements (e.g., “In most ways, my life is close to my ideal”). Agreement to these statements were rated on a scale from 0 (“Do not agree at all”) to 6 (“Completely agree”). An index was constructed by averaging the ratings (α=.91).

Emotional well-being (EWB) was assessed by means of retrospective ratings of the frequency of positive and negative affect felt during the last month at work and off work, respectively. Six unipolar scales each defined by three adjectives were used with seven steps ranging from “never” (0) to “always” (6). Participants indicated how often during the past month they had felt positive affect high in activation (engaged, interested, optimistic), neutral in activation (glad, pleased, happy), and low in activation (serene, calm, relaxed). Using the same scale, they also indicated how often they had felt negative affect high in activation (tense, anxious, nervous), neutral in activation (sad, displeased, depressed), and low in activation (indifferent, bored, pessimistic). The adjectives defining the scales were adopted from the Swedish Core Affect Scale (SCAS) (Västfjäll et al., 2002; Västfjäll & Gärling, 2007). After inverse coding of the ratings of negative affect, an index was constructed by averaging (α=.92). For correlations between all items included in the measures of LS and EWB, see Table 4 in Appendix.

To validate the multi-item measures of LS and EWB, a Principal Component Analysis was conducted with two fixed factors, using an Oblimin rotation. The correlation between the two compoents was .52. As shown in Table 5 in Appendix, each of the items intended to capture EWB loaded strongly on the first component. Items intended to assess LS had strong loadings on the second component. .

Results

Means, standard deviations, and product moment correlations are presented in Table 2. All of LS, EWB, satisfaction with the aspects of running the business, and satisfaction with the aspects of private life are on average rated above the midpoint of the 0-to-6 scales. In the business domain, satisfaction with contacts with customers and contacts with employees were rated higher than satisfaction with working time, revenues, and profits; in the private life domain, satisfaction with family was rated higher than satisfaction with friends and economy which in turn were rated higher than satisfaction with leisure and health.

Table 2 Means (M), standard deviations (SD), and product moment correlations
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Sets of OLS regression analyses were conducted with LS and EWB as dependent variables to determine their associations with satisfaction with the different aspects of business and private life. Comparable standardized beta coefficients are reported in Table 3. In Model 1 LS and in Model 5 EWB are regressed on satisfaction with the business aspects. All five aspects have independent positive associations with both LS and EWB, but their magnitude varies. Satisfaction with working time has the strongest association with LS, followed by satisfaction with revenues, while satisfaction with contacts with customers, contacts with employees, and profits have weaker associations. Satisfaction with working time, followed by satisfaction with contacts with customers, have the strongest associations with EWB, while satisfaction with contacts with employees, revenues, and profits have weaker associations.

Table 3 Standardized coefficients from OLS Regression Analyses
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Additional regression analyses showed that also aspects of private life have independent positive associations with both LS (Model 2) and EWB (Model 6). Satisfaction with leisure has the strongest association with LS, followed by satisfaction with family and economy, while satisfaction with health and friends have weaker associations. Satisfaction with leisure has the strongest association with EWB, while satisfaction with health, economy, family, and friends have weaker associations.

In a third set of regression analyses LS (Model 3) and EWB (Model 7) are regressed on satisfaction with business aspects and private life aspects, respectively. All coefficients are weaker in these models compared to the models (Models 1 and 5) with only satisfaction with business aspects or satisfaction with private life aspects. This suggests that satisfaction with business aspects to some degree affect satisfaction with private life aspects and vice versa. The largest reduction is observed for satisfaction with working time with coefficients roughly half the size. This shows that a substantial proportion of the variance between SWB and satisfaction with working time is mediated by satisfaction with the private life aspects.

By entering EWB in the regression analysis with LS as dependent variable and by entering LS in the regression analysis with EWB as dependent variable, Model 4 controls for that EWB is correlated with LS and Model 8 that LS is correlated with EWB (Busseri & Sadava, 2011; Busseri & Quoidbach, 2022). Despite a LS-EWB correlation of .59, the results were not importantly different from those not controlling for the other SWB component (Models 3 and 7). The differences between LS and EWB in relation to the effects of satisfaction with aspects is thus only weakly affected by their shared variance.

Discussion

The results showed that small business owners’ (SBOs’) satisfaction with aspects of running the business and satisfaction with aspects of private life are associated with the measured components of subjective well-being (SWB), life satisfaction (LS) and emotional well-being (EWB). The only statistically non-significant independent associations were observed between profits and both LS and EWB in the business domain and between satisfaction with friends and both LS and EWB in the private life domain. The former non-significant coefficients in the regression analyses are due to the high correlation (.74) between satisfaction with profits and satisfaction with revenues; the latter that satisfaction with friends correlate with both satisfaction with family and leisure (both .49).

There were differences in the strength of association between satisfaction with the different business aspects and the two components of SWB. In support of the first hypothesis, in the business domain satisfaction with revenues is associated with LS and satisfaction with contacts with customers and contacts with employees associated with EWB. These differences remained or were strengthened when satisfaction with private life aspects were controlled. They also remained or were strengthened after controlling for LS or EWB. Satisfaction with working time is a business aspect that had strong associations with both LS and EWB but that were reduced when controlling for satisfaction with aspects of private life. The reason may be that working hours affect the time people have for spending with their family or pursue leisure activities outside of work. Further, a low satisfaction with working time should if it implies negative effects of time pressure, have a negative association with EWB (Fors Connolly et al., 2021). But since the level of satisfaction was high, working time probably reflects differences in positive utility of time use (Larsson et al., 2017). As likewise found in Fors Connolly and Gärling (2022), working time was therefore associated with both LS and EWB.

In the private life domain, differences are observed in that satisfaction with family and economy are associated with LS, while satisfaction with leisure is associated with EWB. A possible explanation for these results is that performing pleasant activities in everyday life is more strongly associated with EWB, while people's perception of their general life circumstances is more strongly associated with LS (Luhmann et al., 2014). Supporting our second hypothesis, overall satisfaction with the private life domain has a stronger association with LS than with EWB, while overall satisfaction with the business domain has an equally strong association with both. The results also suggest a dependence between satisfaction with aspects in the business and private life domains. Thus, all correlations are positive between satisfaction with the aspects in the business domain and satisfaction with the aspects in the private life domain. An example is the correlation (.51) between satisfaction with working time in the business domain and satisfaction with leisure in the private life domain. Other examples include that satisfaction with revenues and profits in the business domain correlate (.47 and .58) with satisfaction with economy in the private life domain. Since satisfaction with economy conceptually is closely related to financial satisfaction (Joo & Grable, 2004), we infer consistent with the results of previous studies that satisfaction with economy in the private life domain is associated with satisfaction with other aspects of private life that in turn are associated with EWB (Fors Connolly & Gärling, 2022; Fors Connolly et al., 2021).

Our results complement the results of Lechat & Torrès (2017) in showing how SBOs’ satisfaction with aspects of running a small business is associated with their SWB and how satisfaction with aspects of private life contribute to this. In addition, both LS and EWB were measured since previous research (Fors Connolly & Gärling, 2022; Fors Connolly et al., 2021) has shown differences in outcome for SBOs. Several other studies have likewise found such differences in the general population (e.g., Kahneman et al. 2006; Kahneman and Deaton, 2010; Knabe et al., 2010). A direct comparison with the results of Lechat and Torrès (2017) is unfortunately difficult due to the differences in method. In our study the different aspects of running the business and private life, respectively, were broad categories while Lechat and Torrès identified many specific events in the SBOs’ daily working lives. Intensity of positive and negative ratings of the identified events were then correlated with overall measures of satisfaction and stress. No distinction was made between different types of satisfaction corresponding to LS and EWB, neither was satisfaction with private life measured. Probably because their measure of satisfaction was closer to EWB than LS, Lechat and Torrès classification of events as related to contacts with customers were highly ranked in satisfaction, whereas economic benefits tended to be ranked lower. Overwork was the most frequent stressor. Our results likewise identified working time as an important aspect.

We acknowledge two potential limitations. Firstly, our analysis is cross-sectional. Therefore, we cannot infer the causal direction of the observed associations between satisfaction with the business and private life domains and LS or EWB (Schimmack, 2008). Secondly, all our measures were based on self-reports. As a result, there may be a common method bias, which may lead to overestimation of the strength of the associations between LS, EWB, and domain satisfaction (Schimmack & Kim, 2020). Still, even though the absolute magnitude of these associations would be inflated, the relative strengths of the associations should still be accurate.

Implications for Research and Application

The positive results indicate that some follow-up studies would be valuable. A high priority is the implementation of research designs that are better equipped to permit causal inferences. By tracking the same sample over time, cross-lagged analyses would make it possible to determine whether changes in small-business owners’ satisfaction with the business and private life domains cause changes in LS and EWB. Another priority is cross-sectional as well as longitudinal studies of other occupational groups.

Some of the findings of this study suggest in which areas policies and legislations would be important. The observation that satisfaction with working time was associated with both LS and EWB suggests that the work-life balance is an important aspect of SBOs’ quality of life. Additionally, the finding that satisfaction with family and economy is related to LS, while satisfaction with leisure is more closely related to EWB, suggests that SBOs may also benefit from facilitation of enjoyable recreation activities outside of work. At the same time, the positive correlations between satisfaction with aspects of the business domain and satisfaction with aspects of the private life domain suggest that interventions aimed at improving satisfaction with business aspects may have positive spillover effects on aspects of private life.