A downturn can be an exciting time, insists prime-time television business entrepreneur Theo Paphitis. This self-made multi-millionaire explains why there are plenty of opportunities for canny entrepreneurs who keep their heads, writes Richard Gillis.

THE CALL comes through as I'm dawdling down Oxford Street on a sweaty London afternoon: Theo Paphitis' day is running ahead of schedule and, time being money, can we push our interview forward an hour?

It seems Theo and his fellow venture capitalists have run out of pre-meditated one-liners and the filming of the fifth series of Dragon's Den has finished earlier than planned.

We agree to meet at Ryman on Lower Regent Street, one of the Paphitis-owned chain of office stationary shops which contribute to the Cypriot-born entrepreneur's huge personal wealth, put at €190 million by the most recent Sunday Times rich list.

An unscientific straw poll among friends and colleagues suggests that of all the multi- millionaire business tycoons currently treading the boards of prime-time television, Paphitis is up there as one of the most likeable.

This is odd, given he once told a Dragon's Den contestant that he'd rather put pins in his eyes than invest in him. Nonetheless, I go into his shop and ask: "Is Theo in?", in the sort of casual manner I wouldn't try on with, say, Sir Alan Sugar, or that ruthless blonde Deborah Meaden who sits next to Paphitis in the den.

I'm directed to the basement, where the man himself is wandering a gloomy corridor looking for a free office. We go into a small windowless room dominated by a big circular table, pushed into the corner, with chairs stacked up against the wall.

"This is just somewhere we use when we're in London," says Paphitis. "Glamorous 'innit'?" he says, looking around at the tired wallpaper and empty drinks machine.

And he's right, it's a million miles from the slick image cultivated on the cover of his autobiography-cum-self-help-book, Enter the Dragon, where he is seen grinning from his €430,000 Maybach car. But it's in offices like these that Paphitis has worked his particular brand of magic, turning around underperforming high-street chains and selling them on for vast fortunes. He recently sold the lingerie chain La Senza to Lion Capital for an estimated €125 million, a move he says was prompted by the current economic climate.

"We've got a balance of trade deficit, budget deficit, pensions deficit, and the only thing that was keeping the company going was that inflation was down and unemployment was down. You only need one of those to move and you're dead.

"If I was a risktaker, I wouldn't have sold, but I decided that house prices were unsustainable. My view was I sat down and put my team together and said: 'All of you now explain to me why we shouldn't sell, why the economy's great and that we will continue to grow - you give me the reasons'. Nobody could, and because they couldn't, it told me it was time to sell and bank the cash which I did, thank God.

"But that's just common sense, you look at all the facts and say something's got to give. I reckon we are going to be in for a deep, long period of no growth, possibly stagnation."

The appeal of Dragon's Den lies in its simplicity. Five very rich venture capitalists sit in leather armchairs with thousands of pounds of their own money piled in front of them. Into the den come the aspiring entrepreneurs, their aim to convince one or more of the dragons to invest in their business ideas in return for a share of equity in the fledgling company.

The programme, now starting its fifth series on BBC, has been a surprise hit and made stars of its regulars, the dragons, who take turns in destroying in an increasingly cruel way, the dreamers who present their business plans before them. Some of the contestants you feel sorry for, others have got it coming. After four series, the least they could do, says Paphitis, is know what to expect. "I think that some people who come in are a lot more prepared," he says, referring to the latest stint of filming that took place in a reconstructed den at Pinewood Studios to the west of London.

"But with some people, you wonder what planet they're on. They turn up, they haven't done their homework and you ask, 'do you watch the programme?'

"It sums it all up. They will never be successful, those people. They haven't got any common sense. If you had common sense, you wouldn't just turn up to pitch."

For the first time since it was launched in 2004, the programme takes place against a gloomy economic backdrop. It is the product of a bull market, where people are embracing risk and chasing cheap money. Will this formula work in a downturn?

"I haven't seen the programme because we're still shooting it," says Paphitis. "Obviously, it'll be edited and hopefully reflect what is happening, but I think there are some lessons, some discussions that take place that really take into account the space we are occupying at the moment, which is different than it has been."

The rewards for Paphitis and fellow judges lie less in the investments made on the programme, but in the lucrative spin-offs from the series. Dragon-themed publishing deals, television series and entrepreneurial magazines are just some of the ways in which they are working the 'Dragon' brand.

The subtitle of Paphitis book is: "How I transformed my life and how you can too!" It lists 12 rules for business success, including gems such as: weigh up your opposition - and yourself, start small and know that cash is king.

The "you can too" premise of the book's title goes to the heart of the business reality shows like Dragon's Den and The Apprentice. But can you really teach someone to be an entrepreneur? Paphitis was a poor Cypriot immigrant, who has battled dyslexia and social prejudice to get to where he is. In this way, he's a product of a meritocracy. Through his hard work and wit, he has made the classic rags to riches journey.

The flipside of a meritocracy is that multi-millionaires tend to assume that "anyone can do it".

I put it to Theo that the "you can too" philosophy is misleading and that the key to being a successful entrepreneur is down to how much risk we can bear, citing an example in his book where he sells the family home to invest in a new business. He looks at me like I'm five years old.

"I'm not a risktaker," he says, warming to the theme. "I'm the total opposite. If I was a risktaker, I wouldn't have sold the house. I would have taken a chance, but I did the exact opposite because I didn't have the balls to hold onto the house and say, 'it will come good'.

"I thought, 'I'm going to limit my downside'. Stack the cards in your favour and in a casino, you'll get arrested and put in prison, but in business and in life, it's the right thing to do. Take calculated risks and limit your downside."

Successful business people have common sense, says Paphitis, looking at me grinning. "It's called common sense, but it's not common. Most people don't have it." For this reason, he says, there are many people who are heading for a fall.

"I'm excited, I'm seeing businesses all over the place, businesses I couldn't afford before. There'll be opportunities from the fallout that is happening at the moment."

He goes into business guru mode, and for the first time in our interview, the dragon bares his teeth. "Be sensible, don't be in a rush and don't take a flier. This is not an economy that's flush.

"So many people took part in the last seven or eight years. They bought properties all over the place, overpaid for them and the market got them out of trouble and they thought they were clever."

So, it seems there's never been a better time to be a millionaire.