Some 30 per cent of businesses think that reducing administrative burdens would encourage them to grow, while more than a quarter (27 per cent), feel that tax breaks would provide the best incentive for expansion, according to a study of 150 companies by Iris Accounting & Business Solutions.

A further 30 per cent say the uncertain economic climate will continue to be the greatest challenge for businesses in 2012, followed by operational costs (23 per cent) and staying competitive (18 per cent), with 12 per cent feeling that customer retention would be a challenge for them in the next 12 months.

Despite the challenges, businesses are trying to remain optimistic about their prospects. Three in ten see exploring new markets as the biggest opportunity for growth available to them in 2012, whilst almost one quarter (24 per cent) think that introducing new services will provide their chance to shine.

Paul Sparkes, Product Director, IRIS Accounting & Business Solutions, says, ‘Most businesses have already been through a sustained period of operational cost cutting but many are still under pressure to look for further savings. Tax breaks are just one solution that will help to encourage entrepreneurial activities and business growth, but it’s important that the government considers this as an urgent priority.’

Sparkes adds that regulations and administrative burdens will continue to hamper growing businesses, so it is important that they take time out to look at how they can improve procedures and efficiencies from the inside out.

‘Assessing existing processes and ensuring they have the right tools and information they need to enable business growth is a small but simple step towards improving efficiencies and making better, more strategic business decisions.’