It is vital to the economy that small companies are allowed to prosper, it has been suggested.

Emyr Williams, director of Bytestart.co.uk, said that the coalition government has shown itself to be far more pro-business than the previous regime, which gives firm owners confidence.

This could mean that recently-established companies find themselves in the position to benefit from new opportunities, such as more office space to rent.

Mr Williams stressed the importance of emerging corporations in driving the economy by stating: "As the bloated public sector is shrunk, it's vital that small businesses are there to provide employment and stoke the engine of the economic recovery."

He added that undersized firms are the most important employer in the UK and major tax contributors to the Treasury.

The latest Business Factors Index published by Bibby Financial Services revealed that 72 per cent of small companies feel positive about their current trading conditions.

And although business output fell by 12.4 points during the second quarter of 2010, Mr Williams commented that the majority of enterprise owners remain optimistic and are able to spot opportunities, despite the effects of the recession.