BUSINESS 2000 Many very successful Irish entrepreneurs have had chastening business experiences, writes Caroline Madden

IN 2005, Rachel Elnaugh, a former panellist on the cult BBC venture capitalist programme Dragons' Den, suffered a dramatic fall from grace. Her adventure gift business Red Letter Days, which had won her many accolades over the years, collapsed after an ill-advised expansion plan went wrong.

To add insult to injury, her fellow dragons Theo Paphitis and Peter Jones swooped for the kill and snapped up Red Letter Days when it went into administration, and succeeded with the business where Elnaugh had failed. But rather than let her very public downfall get the better of her, in true entrepreneurial style, she has found an opportunity to profit from her business failure.

She has penned a new book Business Nightmares - out this month - which promises to reveal "the human side of public business failure for the first time". As well as speaking about her own experience, Elnaugh has persuaded other well-known entrepreneurs to open up about their own business nightmares and failure.

Whether or not you liked her style on Dragons' Den, Elnaugh's resilience in the face of public humiliation is admirable. Moreover, any initiative that helps to break down the stigma attached to business failure can only be welcomed.

Mark Fielding, chief executive of the Irish Small and Medium Enterprises Association, says that, in the past, business failure carried a major stigma in Ireland. " were regarded as gangsters if they were successful and chancers if they failed," he says. "The failure used to attach itself to the person rather than the business. It was the person who became stigmatised rather than the business idea."

Fortunately things have improved since those unenlightened times. "There has certainly been a change towards entrepreneurial activity from that point of view," says Fielding, who himself carries the battle scars of being a business owner-manager. "More and more people are willing to give somebody who has failed a second chance."

In the 1980s, if an entrepreneur had a business failure on their CV, they were damaged goods as far as the banks were concerned. However, banks and venture capitalists have realised that second-timers - entrepreneurs who have bounced back from a harrowing first experience in business - are more likely to be successful than first-timers.

Even if their previous start-up didn't survive, serial entrepreneurs will have learnt vital business lessons the hard way and will have built up a huge wealth of experience. They are unlikely to make the same mistakes twice.

Entrepreneurs who are going through their own personal business nightmare can take comfort from the fact that they are in exalted company. Many of Ireland's most venerated businesspeople have struggled with adversity and had their own fair share of failures before hitting the big time. "I would think that, if you went through the top 50 or top 100 business people, you would find failures in each and every one of them," says Fielding.

Seán Murphy of Chambers Ireland agrees: "You will find if you look at the most successful entrepreneurs around, they've often had chastening experiences." But they learned from these experiences and moved on, he adds.

The portfolio approach favoured by some Irish venture capital firms shows that they accept the reality that not all start-ups they fund will survive. So, for example, they might be willing to invest in 10 start-ups on the basis that two might be successful, four might break even, and four might be abject failures. The idea is that the two success stories will more than compensate for the others.

Murphy points out that even in the case of the ventures that fail, their efforts are not in vain. The skills that management teams acquire will be hugely beneficial to them should they become involved in a subsequent start-up.

"So I think it's really, really important that people see those type of failures as a way of learning for the next investment, for the next start-up," he says. "It's only the skills you get from dealing with very tough experiences that toughen up an entrepreneur with regard to the activities that they will engage in in the future."

The story of the late Tony Ryan, founder of budget airline Ryanair, Murphy says, is a prime example of the resilience of Irish entrepreneurs. Despite the collapse of his aircraft leasing company GPA, Ryan soldiered on with Ryanair, pouring huge amounts of his own money into the fledgling airline. Ultimately his determination paid off and Ryanair is now arguably one of Ireland's greatest success stories. The moral of the story? If at first you don't succeed, try, try again.