Evan Davis

The economic cycle has turned in the last year and business life has changed for entrepreneurs. The credit crunch has made banks less willing to lend money and certainly less willing to take risks. Housing prices are falling and so the option of financing a business by mortgaging a home is far less available. Harsher too, is the fact that consumers are facing a bit if a crunch of their own. It will probably become harder to sell to them as they start to retrench on their spending, having saved rather too little for the last few years, borrowed too much and having relied a lot on housing as a source of wealth.Given all this, one might well expect that fewer new businesses will be created in the next three years than in the last three. Are we about to see a similar decline in entrepreneurial activity?

This is an important question for Dragons’ Den. The venture capital TV programme has been a huge success since its first series in 2005 and the years since 2005 have been rather favourable for new businesses. For Series 6 of Dragons Den now entering production, the question is whether British entrepreneurs have the resilience to weather difficult economic times? I suspect the answer to the question is “yes”.

If there are two things that generally characterise successful entrepreneurs, one is the ability to think positively, and the other is the ability to see an opportunity where others see a problem. This is clearly a time for those attributes to shine! The good thing about current conditions is that the banks and other lenders will be more discriminating and companies which are formed, that succeed or grow are ones that will have real strengths. What does that mean for the investors and entrepreneurs in Dragons Den and in the traditional world of business start-ups? In principle, those investments are not usually about short term profit opportunities that will only survive benign conditions.

Investors want to spot businesses with long term prospects, ideally those that can be scaled up into something large and valuable for a sale down the line. So the tougher environment doesn’t change the job of the Dragons or other professional venture capital investors. Entrepreneurs may need to go further than before to impress, to iron out any wrinkles in their business plans and to ensure they have preparations for all contingencies. Remember robust ideas are those that can fly come what may!If you would like an application form please visit www.bbc.co.uk/dragonsden, or send an e-mail to dragonsden@bbc.co.uk or call 0871 200 3003 (Calls cost 10p per minute from a BT Landline, other operators and mobiles may be higher.)