At this point, they go one of two ways. If they have good sense they may decide to recruit key staff who can take the burden away from them. This often leads to unmerciful haunting of new staff and a spate of rapid staff turnover. Other owners just drop their bundle and let go entirely, fleeing their business as soon as new staff commence, desperate for well earned break. The new staff are unlikely to want to put in the same hours or commitment as the owner, especially considering what they get paid, so the business suffers and value for money goes out the door.
Standards fall but the public take some time to realise.
By the time trade declines it's often too late. A small percentage of owners manage to get their business structured properly and end up with a profitable concern, run by a manager. The key staff who can run the operation are very valuable and are probably destined to run their own businesses. If they quit they can create a monster problem within the business. This is where I see a lot of owners lose the plot.