The number of firms in business across the UK increased by 260,000 last year - the biggest annual rise since records began a decade ago, the Government said yesterday .
There were 4.3 million firms operating by the end of the year, compared with just over four million the previous year.
More than nine out of ten firms were small to mediumsized organisations, with total employment nudging 13 million.
Industry Minister Alun Michael said: "We must continue to support new and existing businesses, and ensure that they are at the forefront of our efforts for encouraging a sustainable entrepreneurial culture.
"It is essential that we continue to build on this economic stability and help businesses succeed and prosper, by reducing the barriers that prevent enterprising individuals who want to start in business taking those important first steps.
Neil Mackay, from Advantage Business Angels, welcomed the news and said the region had seen a rise in business start-ups, especially from people made redundant from larger firms.
He said: "Increasingly people prefer to own a slice of a business rather than rejoining a big company.
"There is a realisation that a successful small business is likely to provide better provision in retirement than a pension fund."
Mr Mackay said increased funding opportunities and investment were largely responsible for the rise.
"We have certainly seen a rise in the numbers of startups and people wanting to start businesses approaching Advantage Business Angels.
"I think we have to give Government and Advantage West Midlands credit for providing funds to help these new firms."
David Bishop of the Federation of Small Businesses said the increase in the number of firms was "encouraging".
"More and more people at different stages of their lives are seeing self-employment as an attractive option and are deciding to work for themselves."
Meanwhile figures published yesterday suggested a rise of 0.5 per cent in business investment during the second quarter of this year - a 2.2 per cent jump on the same period a year earlier.
The Office for National Statistics said business investment stood at £28.26 billion in the three months to June.
Most analysts believe that the figures will provoke an increased estimate for second quarter GDP.