Just over two-thirds of West Midlands small firms want their business to grow, or take on more staff, but many feel that over regulation and tax get in the way.
The latest NatWest/ SERTeam Quarterly Survey of Small Business revealed that 67 per cent of small firms saw red tape as the biggest barrier to growth, whereas 52 per saw taxation as a major problem.
Over half of West Midlands small businesses prefer to measure business growth by the number of sales that they generate, 36 per cent base it on profits and, unlike other parts of the country, none measure it in terms of market share, employment, number of sites or product range.
Just over a third believe that they would benefit from targeted measures such as the provision of loans and grants, compared to only 13 per cent who thought help with training would be useful.
Larger firms are much more likely to favour a reduction in red tape and better training and education for employees.
Over a third of West Midland small businesses believe that success in finding new customers has the strongest influence on their desire to grow.
Around a fifth of retailers and 29 per cent of restaurants are more dependent on an expanding local community than other types of wider reaching businesses.
Small firms in Scotland and Wales are more likely than those elsewhere to believe that an expanding local economy is the most important factor influencing their growth.
Pete Ferns, director of NatWest Business Banking, said: "Deciding to grow your business is a big decision and one that requires a lot of planning.
"Expansion will have a direct impact on cashflow and profit in the short term, however can lead to extensive gains in the longer term.
" It is clear from the research that Government regulations and taxation continue to impact the Britain's small business community and appear to be a key reason behind their attitude towards growth."