One in three small businesses plan to expand in 2010, according to new research by Hiscox.

Professionals setting up a recruitment agency will be glad to hear that nearly one in three (30 per cent) small businesses is planning to expand in 2010, according to new research by Hiscox.

Highlighting the level of renewed confidence among Europe's entrepreneurs, the study also revealed that two-thirds (63 per cent) of these businesses are planning to go for growth during the second half of the year.

More than half (53 per cent) of those questioned in the UK, Germany, France and the Netherlands were also of the opinion that 2010 is a good year to start up a small business.

"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," commented Hiscox's small business expert Alan Thomas.

However, he warned that government bureaucracy threatens "the entrepreneurial spirit" of these businesses and called for more to be done to aid their expansion.

The Institute of Directors recently put pressure on the government to cut red tape, which is costing businesses more than £80 billion a year.