Don't plan your exit too soon, says entrepreneur turned investor Julian Ranger, but if you hear the right number, walk away

While Britain's banks defend themselves against accusations that they're letting down the UK's credit-starved small businesses, one angel investor is getting on with his job, investing in SMEs and passing on his management knowhow to aspiring entrepreneurs.

Having sold Stasys, the military consultancy firm that he co-founded in 1986, Julian Ranger took a two-year "mini-sabbatical" before starting up angel investment and management consultancy J Ranger in 2007, and iBundle, a subsidiary that invests in software and Web companies. Despite the recession, he says his investments have been moderately lucky with "two deaths, and four still in business".

Ranger learnt lots from the sale of his own business. Be 100 per cent clean and honest, he advises, because due diligence will spot any gaps. Don't plan an exit too soon—ensure the company is making a good profit, not just a good turnover. Get advice from someone who has done it before—the exit will be less likely to disrupt your business. Hire someone to negotiate, and have a figure in mind that if you get, you walk away.

And plan for your "zero cash day", he says. Make sure you've got cash facilities well before you need them. Ranger still believes this is a good time to start a business, despite "the restriction of liquidity being a real killer", because competition is less fierce.

A combination of optimism and realism is what he's looking for in a business. Anything else? "It's a 50/25/25 split," insists Ranger. "People that you can train, develop and trust. Then an idea, and then a plan. Good people matter."