In this week's SME Focus, a veteran entrepreneur and former wordsmith for The Wombles explains why he decided to launch an upmarket furniture venture just as the credit crunch started to get nasty.

Paul Fennon provides a passionate reminder that entrepreneurship is all about taking risks and being prepared to learn from the consequences, whether those are good or bad.

Name: Paul Fennon.

Age: Fifty-three and a half.

What is your business called? I own a graphic design consultancy called EVM (Effective Visual Marketing), a sign company called EVM Signrite and, most recently, a bespoke furniture business called Wood Made Good.

Where are they based? In Glasgow and Ayr.

What do they produce, what services do they offer? EVM designs brand identities, brochures, websites, retail/commercial interiors and exhibitions.

EVM Signrite designs, manufactures and installs internal and external signage.

To whom does it sell? The majority of EVM's turnover comes from the property development sector, while EVM Signrite makes signs for every kind of organisation. Wood Made Good sells directly to the public.

What is its turnover? The combined turnover of the businesses will approach £2.5m this year.

How many employees? We employ 25 full-time staff and four part-timers across the three companies.

When was it formed? I established EVM in 1991, purchased Signrite in 2006 and formed Wood Made Good earlier this year.

Why did you take the plunge? The driving factors behind establishing my own company were to achieve financial and creative independence and the freedom to make decisions without interference along the way.

EVM was an ideal vehicle for exploiting my marketing communications background.

I decided to form Wood Made Good when I couldn't find any good-quality furniture of the right size for my home. When I researched the market, I discovered many others like myself were growing increasingly frustrated with the current retail furniture offerings.

On the one hand, there are big retail chains selling flat-pack furniture of questionable quality shipped in from the other side of the world while, on the other, bespoke furniture was very expensive because it is often produced by one or two craftsmen whose business structure necessitates an exorbitant price tag.

The other reason I took the plunge is that cabinet-making is something for which I have a passion. It helps that EVM provides in-house marketing and advertising for the brand.

As an entrepreneur, you have to back your instinct and take the risk - that's what being an entrepreneur is all about. Thorough and practical research into the market sector you are looking at entering is critically important but, at some point, based on that knowledge you have to take that leap of faith - that's what makes the juices flow. If you're thorough in your preparation, then you can minimise the downside.

At the end of the day, though, you've still got to take that risk.

Fortunately, touch wood, my hunch appears to have been proven right as we're seeing a steady stream of customers.

We are arguably better equipped to ride out the credit crunch storm than other traditional retailers. Our overheads are smaller, our margins are better and we don't tie up a lot of cash in stock and property leases.

What were you doing before you took the plunge? I was an advertising copywriter writing the words for TV commercials and jingles in London. It was great fun at the time. I worked for American agencies including Benton & Bowles and Grey Advertising and worked on Jacobs Club - "If you like a lot of chocolate on your biscuit join our Club" and Oil of Ulay (now called Olay) "Helps keep your skin looking young".

I also spent time in the music business working with CBS Records (now Sony) writing ads for the likes of Bob Dylan, Bruce Springsteen, Simon & Garfunkel, David Essex and, believe it or not, The Wombles.

Sometime later on I moved into graphic design. One way or another I've always been involved in the creative industries.

How did you raise the start-up funding? I sold my house in Wimbledon at the right time and relocated to Scotland.

What was your biggest break? My very first business venture, which went bust in the mid-80s. It was a photographic processing business which developed and printed for professional wedding photographers and estate agents.

It was a difficult time for the sector, digital imaging was changing the whole business and because of overcapacity in the processing market, prices were very low compared to Europe. The capital investment didn't stack up against the poor returns.

On reflection, I didn't thoroughly understand the technical side of the business, taken care of by my business partner, and frankly it was a blessing in disguise when I decided to call it a day and get back to my first love - design, graphics, advertising and marketing communications.

That said, it wasn't all bad. I sold the estate agency part of the business to London Rubber - the people who made Durex and had the largest photo processing business in the UK at the time.

I was also treated to a visit to the Kodak factory just outside New York, and an all-expenses tour of the States as we were one of their biggest UK customers.

I learned so much about running a business and from making mistakes from the experience that it was positively empowering for my future enterprises although I didn't realise it until a few years later.

What was your worst moment? Having to inform hard-working loyal staff the bad news that my first business wasn't going to survive. Fortunately, most of them stuck through it and remain with me today.

What do you most enjoy about running the business? Making things that make other people happy - whether that's designing a new corporate identity or a website, putting a new sign above the front door of a new hotel or manufacturing a bespoke item of furniture.

What do you least enjoy? Paperwork and the increasing amount of legislative red tape with which businesses must now comply.

What is your biggest bugbear? Employment legislation - not for the faint-hearted. It's a minefield for would-be entrepreneurs wishing to create jobs. It's full of good intentions but doesn't leave any margin for errors of judgment when assessing new employees.

What are your ambitions for the firm? To continue growing profitably, to keep costs strictly under control and to ensure that our new retail brand Wood Made Good becomes a great success. I'm not interested in growing much bigger for the sake of it. I'm more driven by the new opportunities that we create by being recognised for doing great work or by making a beautiful piece of furniture that will last for generations. For me making money in business is simply a by-product of doing something really well.

What are your five top priorities? Stay healthy, achieve this year's targets for Wood Made Good, ensure we make the most of the opportunities that the Commonwealth Games will bring, continue to develop our property in the East End of Glasgow, and find an ambitious apprentice to hand over the reins to at some point in the not too distant future.

What single thing would most help? I'd like to see the development of a scheme through which successful business owners approaching their mid-50s like myself can be put in contact with fresh-faced, energetic and enthusiastic young entrepreneurs to our mutual benefit.

I think a mechanism that introduced young talented entrepreneurs into existing businesses like mine, perhaps via the Entrepreneurial Exchange, or through Scottish Enterprise, would be of great benefit to the SME sector in general and the long term well-being of the Scottish economy.

What could the Westminster and/or Scottish governments do that would most help? Ensure that our home-grown entrepreneurs are respected and nurtured and given the incentives to create the wealth and job opportunities that will encourage them to start their businesses ventures here in Scotland.

There's great talent here - we overlook it time after time and then take short cuts in trying to build a robust economy by dishing out millions of pounds on inward investment projects that seem to last only until the Regional Selective Assistance money runs out.

What was the most valuable lesson you learned? When in doubt about something trust your instinct - it's rarely wrong.

How do you relax? Tennis in the summer, ski-ing in the winter. Occasionally I buy modern art that I really can't afford. I've recently started to grow my own vegetables and, with the help of my son, enjoy preparing celebrity chef recipes that we try out on the rest of the family.