The five key concerns highlighted in its report 'The SME Glass Ceiling - Growth Obstacles in 2007' were late payment, lack of business finance, National Insurance Contributions, business rates and levels of Government business support.

A spokesman said: "While figures for start ups in business are broadly favourable, this report demonstrates some clear obstacles to growth, which need tackling before they become endemic.

"To this end the IoD have laid out 14 urgent steps that Government needs to take in order to really engage with the SME [small and medium sized enterprises] agenda."

The IoD says BERR will be judged on how it tackles small business concerns over the next 12 months.