"You bitch from hell" is a phrase that peppers my interview with Rachel Elnaugh. It was the kind of correspondence she received from disgruntled customers, she says, when her multi-million pound business, Red Letter Days, went into administration in 2005.

It's also how she remembers being portrayed in the media at that time, as she was torn to shreds for being a 'Dragon' who failed in her own business. And when she became interested in the internet and blogging more recently, and discovered people had been having all sorts of virtual debates about her online, there it was again.

Elnaugh first stepped into the media spotlight in 2004 as one of the original five 'Dragons' in BBC2's Dragons' Den, the TV show where people pitch their business ideas to a panel of successful entrepreneurs in the hope they will invest. Although only appearing in the first two series', the show gained a cult following and Elnaugh, along with the other Dragons, was propelled to fame.

She's best known as the red haired, softly spoken, sole female dragon who branded herself the 'marketing guru' - her unique selling point - when pitted against the other alpha males dragons interested in similar business investments.

And though the 'marketing guru' tag is strictly true - Red Letter Days, the gift and experience company she began in 1989 at age 24, turned over £18m at the height of its success - it also made her business failure all the more spectacular.

Two and half years on, Rachel Elnaugh is back in business - releasing a book next month and launching a series of 'master classes' for entrepreneurs of small businesses.

But she's doing things differently this time around. There's no huge office, no big expense accounts, and no 24/7 work schedules while nannies take care of her five children. Looking back on her former life now, she says: "It's a price you pay to get rich and successful; you do it at the time because the business comes first and everything else simply comes second. Funnily enough, I remember my biggest luxury even then being the days I could spend not having a meeting, not having to put on make-up nor having to dress up."

Times have certainly changed. Elnaugh now lives with her husband and five boys in Derbyshire, and spends her working week mostly at home writing about business, giving consultancy advice to entrepreneurs or mentoring them on what to expect, how to survive and eventually thrive.

"I had my fourth baby and was back in meetings with creditors the following day, talking to insolvency advisors, briefing journalists because the story had broke, and was still bleeding from the birth"

This is also the focus of her new book. Together with her own experiences, she's spent the last two years researching and interviewing top entrepreneurs for the 21 chapters which span the 'whole entrepreneurial journey'.

It touches on the start up phrase, the growth nightmares and the end phase when, as she puts it, 'it all goes pear shaped'. Elnaugh has firsthand experience there. "That chapter is about removing the fear," she explains. "When you're on the edge, there's this terrible fear 'what if I fall over?' and sometimes it's the best thing that can happen to you. That was very much the case for me, though it felt like the worst thing at the time."

The edge for her came one week before Red Letter Days went into administration. "I'd had my fourth baby and was back in meetings with creditors the following day, talking to insolvency advisors, briefing journalists because the story had broken, and had my husband in tow with the baby because I was breast feeding and still bleeding from the birth. It was just a nightmare."

Totally exhausted that evening, she and her husband decided to call it quits. "Until then, I was like a woman going down the side of a ship, screaming 'noooooo'. But the moment I let go, I felt completely liberated, it was amazing. I thought, I can stay at home with the baby. Of course, you're also thinking, am I going to lose this very home?"

As forthright as she comes across on TV, Elnaugh sums up how she coped financially during this crisis: "Before the business failed, money was no object, whatever I wanted I just bought. Suddenly I'd lost my company, my world, and all my income.

"I'd never written a book before in my life," she continues, "but when I was offered a lump sum up front, I said 'Fine, I'll write a book'. It's only later I realised how difficult it would be. The same with speaking engagements, I was terrified of public speaking but, offered £5K, I started doing them. I had to think about cash flow immediately."

What you don't see on TV, however, is Elnaugh's strong belief in spirituality and cosmic ordering. As well as giving sound entrepreneurial advice, she also encourages business people to tune into their creative energy, and swim with rather than against this, as it's a significant part of their 'journey'.

"I asked Peter Jones 'what has happened to you? You were such a nice, genuine, charming guy and now you're acting Mr Big, slagging off all these people on TV"

She takes Red Letter Days as an example. During a session with her life coach in 2002, a time when she began to realise she wanted her life to change direction, she wrote down on a scrap of paper 'how I would like my life to be'.

"I found it recently and realised the universe had sent me exactly what I'd asked for. It said 'Get rid of Red Letter Days by 2006, take time to write, be more creative and spend more time with the children'. I'd wanted my time in the company to come to an end but was swimming against that stream because I anticipated the end differently," she says.

Another experience she believes was part of her cosmic journey was appearing on Dragons' Den, a show that originally 'had energy, was fresh and had a real emotional edge', she says. It was in the second series that things started to change, becoming 'a bit formula and not at all about small businesses'.

"For a start, all the dragons had their teeth whitened and began wearing designer suits," she remembers. "And Peter Jones got Max Clifford, who represented Simon Cowell, as his PR so he started acting Mr Nasty. I remember after one altercation with him, asking 'Peter, what has happened to you? You were such a nice, genuine, charming guy and now you're acting Mr Big, slagging off all these people on TV."

The show has, however, given her a platform for her current business. With more people aware of who she is, they're also more interested in hearing her speak or attending her seminars. "It's interesting how something wonderful can often come out of adversity."

Overall though, she's struggling with the Dragon brand. "Now, I'm very much at the coal face of small businesses in Britain and Dragons' Den is such a bad example of that. I'm constantly working to change my Dragon brand.

"Without fail, I still get people come up to me after each event saying 'You know, you are such a nice person, you really are. And we really didn't expect it. We thought you'd be the bitch from hell'," she sighs.

For information on Rachel Elnaugh, or to find out about her entrepreneur master classes, visit www.rachelelnaugh.com

By Barbara Walshe