The Scottish small and medium enterprise sector had a strong 2014 with 70 per cent improving or maintaining their turnover compared to 2013, according to a survey by insurer LV=.

It says: "Scottish SMEs are thriving with business owners reporting that profits are up in the past year and the outlook is positive."

It goes on: "Four in ten (38per cent) of Scottish SMEs have seen their turnover increase in the past 12 months, while a further 32per cent say turnover remained steady at 2013 levels. In addition, a new generation of Scottish SME owners has entered the market as 26,000 people started running their own business in Scotland in the past 12 months."

The UK-wide survey of 767 SMEs included 84 in Scotland, covering sole traders and companies employing up to 250.

The survey suggests that a quarter of Scottish SMEs took on more staff in the year past.

The insurer's concern is that it also suggests that 10,000 Scottish businesses employing staff have no employers' liability insurance.

Legal & General meanwhile has published its annual 'state of the nation' SME report, highlighting the risks faced by business owners.

It says the average UK SME is worth £3.1m and generates a profit of £620,000. The data also reveals that the average small business owner is a 48-year-old male and has been trading for 12 years

It warns that 40per cent of small businesses said that they would cease to trade within a year of losing a key employee or owner yet almost 60per cent have no 'key person' cover in place.