Small businesses are currently feeling less confident, according to the Bank of Scotland Small Business Confidence Index.
The survey of 1,000 business owners and senior executives of smaller firms found that confidence has dropped six points since April, from 48 to 42.
A total of 33 per cent of respondents said that now is a good time to be running a small business, while 38 per cent said it is not a good time.
Additionally, 63 per cent said that they anticipate economic conditions to get worse over the next year.
Ivan Matviak, head of Bank of Scotland Business Banking, commented: "The economic uncertainty that has dominated the news agenda throughout the latter half of 2007 has clearly filtered down to Britain's small business community."
He explained that "a more cautious approach" is being taken by many of these small business owners as they face the new year.
Meanwhile, Nationwide recently found the consumer confidence dropped by 12 points to 86 last month.
