In a survey by the Forum of Private Business, 85% of respondents said they were positive and intended to develop their businesses in the next 12 months.
With three out of ten respondents expecting to increase employee numbers, the survey findings will boost hopes that SMEs will create significant numbers of jobs this year.
Some 15% expect to increase the total hours worked by staff.
However, the Forum said: "The research also highlighted that 'the cost of doing business' remains a key concern for small firms and a significant obstacle for creating the business confidence needed for a sustainable recovery in 2014."
The rising cost of utilities concerned 40% of respondents.
The results of the survey of around 4000 businesses in the UK suggest firms may be finding it easier to access funding on acceptable terms, following repeated claims that banks were starvings SMEs of affordable credit.
Around a quarter, 24%, of firms said the cost of finance was a barrier to growth, compared with 36% last year.
Noting that many respondents said they were short of time, Alex Jackman, head of policy at the Forum of Private Business, said: "Now is the time to build on the success of deregulation measures introduced and to push on minimising the impact of some of the big employment law reforms currently in progress.
"A focus on creating stability of regulation for small businesses would be enormously helpful."