People’s dreams of being their own boss can blind them to the realities of establishing a business, an industry body has said.

According to the Federation of Small Businesses (FSB), establishing a firm is a "kind of lifestyle choice".

A spokesperson for the organisation said: "It is a risk setting up a business, there is no doubt about that, but most people’s reasons for doing it are because they are really passionate about what they want to do."

However, he went on to warn prospective entrepreneurs to ensure they really understand what it is they are getting into before they do it.

According to figures produced by Barclays Bank earlier this year, more businesses were established in 2007 than in any other year since records began in 1988, with the north-east and the West Midlands seeing the greatest increases compared to 2006 of 11 per cent.