Although the initial step to set up a business may seem like a huge challenge, one expert has suggested that being able to expand and grow such a venture is proving difficult for many.

Simon Briault, spokesperson for the Federation of Small Businesses, claims that while start-up figures suggest more new businesses are being established, the organisation is 'concerned' about the rate such organisations develop further.

The expert states that 'it is here where businesses tend to run into more difficulties', as regulations, red tape and employment law can be challenging.

However, Briault notes that the credit crunch has yet to have a 'major impact' on business start-ups, while existing businesses are 'reporting fairly brisk business'.

A recent survey of London-based small businesses by the Department for Business Enterprise and Regulatory Reform revealed that 72 per cent are seeking to grow in the next two to three years.

Of those questioned, ten per cent said that regulations were the greatest obstacle to achieving success.