Business secretary Vince Cable announced made the announcement at the beginning of Global Entrepreneurship Week. The forum is part of the government’s agenda to engage with business people to hear their views on unleashing enterprise and encouraging entrepreneurship as an alternative career. The Business Secretary wants to break down the barriers that deter people from taking the leap into starting a business and encourage them to make a job, not take a job.

Up to 26 entrepreneurs will sit on the forum, including Jan Fletcher, Dawn Gibbins and Sarah Tremellen. They have been drawn together on the basis of experience they can bring to the development of enterprise policy. A significant proportion of the forum are women and increasing the rate of female entrepreneurs is one area the forum will be encouraged to look at. One of the women is former Flowcrete owner Dawn Gibbins, who sold her Nantwich-based flooring business in 2008 in a £30m deal.

Business Secretary Vince Cable said: “People with the courage to start up a business will be crucial to driving the growth of the economy. Start-ups create jobs, stimulate innovation and provide a competitive spur to existing businesses to encourage them to increase their productivity.”

The forum will meet around four times a year, with a flexible schedule according to the material to be discussed. The first meeting is expected to take place early in the new year. The forum is just one of several ways in which the Business Secretary will hold dialogue with business. The forum will complement other groups, such as the Prime Minister’s Business Advisory Group; the Secretary of State’s Business Advisory Group; and the Small Business Economic Forum.

The demise of Business Link will save the cash-strapped government £154 million a year and leave entrepreneurs to find information and advice themselves. The end of Business Link will bring mixed feelings where some found it useful and others regarded it as an ineffective use of public money.  The end of business link is likely to increasxe the importance of  business angels who can not only provide funding , but also valuable advice to budding entrepreneurs.

Business angels usually don't have money to burn

You’re wealthy and you’re ready to invest large sums of money to make a decent return – so where do you invest your cash in 2010? Should you invest in a start-up business? Is angel investing right for you?

Property’s still looking a bit shaky, the stock market looks like it will continue to take a beating every time there’s a whiff of bad news coming from Europe or the US. Then there’s gold which until recent years has offered little to get excited about when it comes to a good return on investment.

So how about having a go at business angel investing?  Start-up businesses are apparently desperate for capital. Risk-averse banks are setting the bar too high on their lending criteria according to Vince Cable.

At this point I’ll stop…

A common misconception about business angels is that they are wealthy, the kind of wealthy that means they’ve got money to burn. They’re ready to invest large sums of cash in a promising idea, and if it doesn’t float, well it doesn’t matter nothing ventured, nothing gained. Perhaps TV shows like Dragons Den help create this image of the business angel, but in the real world it isn’t quite like that.

Business angels are unlikely to be sitting around surrounded by wads of cash whilst deciding whether or not to invest in a business. While it is important that you are prepared to invest a decent amount in a fledgling business this can be as little as £10,000, and, typically investments are often around the 25,000 mark. You really shouldn’t risk it if you cannot afford to take the very real risk that you might lose all of this money

So anyone can become an angel investor as long as they can afford to invest the sums mentioned above and take a hit if it doesn’t work out. But while anyone can become a business angel, angel investing is not for everyone.

The journey for a start-up business is far more volatile than a nice maturing property investment. It is true rewards can be much higher of course, and the journey exciting – assuming you back the right horse. But there is no guarantee and the odds will be stacked against making a return on your investment.

So as long as you have the stomach for failure, where even the most seasoned business angels can get it wrong sometimes, becoming a business angel may well be for you.

You can either go it alone or join a network. If you choose to go it alone, contacts in the business and experience in the type of the business you choose to invest in are invaluable. That way you will have a better grasp of the potential value and the amount of money it is sensible to invest. If your business knowledge is not up to scratch you could easily be misled by an excitable entrepreneur who believes that his or her idea is a sure bet that simply cannot fail.

The most successful business angels are the one’s prepared to be hands-on; Thomas Edison once said “Opportunity is missed by most people because it is dressed in overalls and looks like work”. So if you are prepared to get to work and help with your experience in the business you invest in then your investment is more likely to succeed.

Still fancy having a go?

Before you begin it is vital that you do your due-diligence. Start with obtaining legal advice to assess for assessing documentation and drawing up agreements. Get this wrong and things could get messy. If you are unsure, consider joining a network of business angels who can offer you some valuable advice before you begin as well as sharing any losses if a business fails to take off. But going it alone means you get to keep a greater share of the profit if the business is successful come exit time.

Remember keep in mind that as with any form of investment, it is important to be patient and wait for the right opportunity, it can take a long time to find an investment opportunity you are comfortable with. Be prepared to make a commitment of around three years by which time you can hopefully (there are no guarantees) exit with a nice profit.

Mr Cable was addressing an audience at the Cass Business School in London when he also promised to redouble our efforts to ensure that bank lending agreements from banks that have benefited from taxpayer subsidy are being honoured – especially for SMEs”

While the banks would argue that demand is low for business loans Mr Cable said: “If the bar is set too high, of course no one is willing to jump. The current risk aversion by banks in the SME sector will stifle recovery and, if it does, will actually rebound on the banks through bad debt.”

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