Nisha Katona, former Barrister turned founder of Indian street food restaurants Mowgli, talks about how it feels to accept a stranger as an investor into the business you've created from scratch.
Nisha has taken her beloved creation from single Liverpool outlet to multiple UK cities, and the list is getting bigger. But growing Mowgli hasn’t always been an easy journey.
She discussed striking a balance between head and heart in business, and how the right adviser makes all the difference, at Professional Liverpool’s Access to Finance event on 31st October.
“During a long career in law, Indian cooking was a way of keeping my heritage alive. It was the flavour of my family,” Nisha told the room of financial professionals.
Nisha is serious about her food, and it shows. Whilst most of us leave our hobbies as exactly that, Nisha chose to walk away from a successful, two-decade career as a Barrister to make Mowgli happen. Today, running the business, something she spends 18 hours most days doing, is like “breathing” to her.
Within weeks of the street food eatery opening its doors in Liverpool, there was an investment offer of £500,000 on the table. “I didn’t originally have the intention of rolling Mowgli out across the UK, but people seemed to smell a brand,” Nisha explained, “and as queues started to form outside the restaurant, I began to think that Mowgli could be the national voice for Indian food.”
Mowgli has grown exceptionally fast since its founding in 2014, and this is perhaps owing to Nisha’s overwhelming passion for her business and her desire to keep a close eye on each and every element of it.
But this desire for control also brought its difficulties.
For small businesses, accessing finance means giving up a part of your passion project to someone else, and this can be hard, particularly when the emotional connection runs as deep as Nisha’s.
“The decision to give up a slice of Mowgli was a monstrous thing to do. I built this thing and it was mine, no one knew it like I did,” Nisha explained.
“If I wanted to make a change to the menu one afternoon for the following day, I could. As a Barrister, you marshal your own life, from time to workload and even salary. Parting with equity meant walking away from some of that control I’d known in both law and the early days of Mowgli.”
In July, Nisha said yes to a £3.45 equity investment in her £6m turnover business from private equity firm Foresight. Nisha first met the firm in July 2016, and despite walking away at one point, the deal was completed in August this year.
Such a large, time-consuming deal inevitably comes with its ups and downs. It’s therefore vital that the very best, tailored advice is in place to support businesses during the deal, which can be a rollercoaster of emotions.
“Life would be easier for me, and I’d be personally richer in terms of time and stress, if I stuck with the four restaurants,” Nisha told the Professional Liverpool delegates, “but I have a calling to take this national, to even more people.”
Equity and Emotion
One of Nisha’s advisers, Peter Richards, was both the master franchise holder of Subway and development director at McDonalds. With such a breadth of knowledge across the food industry, Peter's knowledge has been extremely valuable to Nisha. However, he lent advice that went deeper than business alone.
“You need an adviser who speaks to the emotional side of you too,” Nisha explained. Emotional capital is as important as financial capital, and luckily, Peter understood that.”
Guided by her adviser, the Foresight investment went through, and with it came the creation of a board, chaired by Café Rouge co-founder Karen Jones.
However, with plans to open a London location knocked back by the board, Nisha soon met with the reality of what it meant to have one.
As Nisha told the audience of financial professionals: “I’ve had to learn that I cannot just fall in love with ideas, or buildings, and go with them anymore. It’s a vote now. However, I trust my chair 100 per cent and she has become a precious pal.”
Keeping Mowgli Moving
However large a business grows, it’s important that advisers and financial backers understand the emotional connection that the founder of that business is always going to have.
“Ensuring that the right team is in place across the business, from board level to restaurant managers,” Nisha explained, “has helped keep the joy of running Mowgli alive. The details that were there when I started it are still there, and that’s hugely important as we expand. It’s something that the board completely understands.”
With Foresight’s support, Mowgli has been able to add a Birmingham restaurant to its Liverpool and Manchester eateries, and an impressive five more are planned for the next year.
The growth of Mowgli has partly been a result of Nisha's careful choice of investment partner, one that understands her business. This courtship process can take months, or even years, but is a choice that should never be overlooked.
“The presumptuous philosophy of build it and they will come is b*ll*cks,” Nisha declared to the audience, of which 90% raised their hands when asked if they’d eaten at Mowgli. “The world does not owe you a living. Find a gap in the market and fill it with real skill. Then find support. The right support and backing is vital for national growth."
The audience, made up of professionals from the finance sector, attended the event organised by Professional Liverpool's corporate finance group to gain valuable insight into some of the new forms of finance available to SMEs in the Merseyside region. The Corporate Finance group’s strategy is to ensure more deals are done locally by local advisers, and with a multimillion pound investment recently accepted by the Mowgli founder, who better to lead the discussion.