In a sign of renewed confidence among Europe’s entrepreneurs, almost one in three (30 per cent) small businesses are set for expansion in 2010 – with two thirds (63 per cent) of those planning to go for growth during the second half of the year – according to new research.

The second ‘DNA of an Entrepreneur’ study* carried out by specialist insurer Hiscox among nearly 1,000 small business owners in the UK, Germany, France and the Netherlands, also found that three in five (58 per cent) of those polled are optimistic about the year ahead.

With the recession now officially at an end, over half (53 per cent) of those questioned believe 2010 is a good year to start up a small business with nearly a fifth (19 per cent) pinpointing gaps in the market caused by company closures as a key opportunity to capitalise in the economic upturn.

Lack of support

But despite growing optimism, one in five (20 per cent) SME bosses are concerned that there is not enough support for emerging small businesses. In fact, the majority (65 per cent) believe that government bureaucracy is threatening their country’s entrepreneurial sprit, identifying four major barriers to setting up on your own:

· Unfavourable taxation system (71 per cent)

· Inflexible labour laws (63 per cent)

· Burden of benefits and social security payments (58 per cent)

· Lack of support from government (37 per cent).

However, when it comes to nurturing future business talent the UK topped the poll – a third (31 per cent) of UK SMEs say our education system encourages individual ideas and dreams, compared to just 19 per cent in Germany.

Risky business

The study also found the recession impacting entrepreneurs’ attitude to risk – just one in three (36 per cent) small business owners say they are comfortable with taking risks compared to 40 per cent at the time of the last study two years ago**.

Figures also point to a glaring disparity between countries when it comes to new ventures. Less than one in ten (8 per cent) bosses in Germany accept the need to take a gamble when running their business compared to 38 per cent in France and 29 per cent in the Netherlands and the UK.

As the most risk averse of Europe’s SME bosses, over a third (37 per cent) of those polled in Germany admitted they would prefer to run their business without having to take any chances. In contrast, just 11 per cent from France and 15 per cent from the Netherlands and the UK said the same.

Alan Thomas, small business expert at Hiscox comments: “The SME sector is a strong bellwether for the rest of the economy so it’s a great sign that Europe’s entrepreneurs believe they are now in a sound financial position and well placed for growth in the second half of 2010, despite being more risk averse.

“But small businesses cannot lead the charge alone. The tough economic climate of the last two years has left many in a delicate position so it’s vital that the right support is provided to breakdown any barriers threatening Europe’s future entrepreneurial success.”

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