Mitchell Tonks: Respect your shareholders

Mitchell Tonks has proved seafood restaurants do make money - Fishworks, the OFEX-listed (Now PLUS Markets) restaurant chain he founded in 1994, turned in its first annual profit this year. With five sites now up and running, Tonks has plans for another 15 establishments.

Good people – employ a personal assistant

The one thing I wish I’d done sooner is employ a personal assistant. This may sound like a luxury, but since my assistant joined a year and a half ago, I’ve managed to achieve much more. Having someone to organise my schedule keeps my business life structured and I feel far more motivated and able to focus.

The concept for the business, to have a quality fishmonger fronting our sites with a restaurant and cookery school attached, means there is always a lot going on. So for years I was pulled in every direction to ensure its smooth running. With the added pressure of being a public company – Fishworks listed on OFEX in 2000 – my time is precious, so having a personal assistant has made a massive difference. I’d say getting the right people in place across the business, as early as possible, is vital.

Be firm with business advisers

I firmly believe the entrepreneur should have the final call on what is good for the business. Although advisers are paid to do a job, they don’t always comprehend what you’ve got or how the business is run. With advisers, I’ve found that they are good at setting deadlines that don’t fit into your schedule.

Early on I assumed that by floating on OFEX, it would somehow encourage better discipline in running the business as well as give Fishworks more public exposure. But overall the experience has been a frustrating one. The shares are pretty illiquid and there has been little movement in price. What I realise now is that when in the process of an initial public offering I really should have been more direct and forceful with my advisers.

The right management

Being in sync with management is vital to the success of any business. But it hasn’t always been the case with the Fishworks board. After we floated, our advisers told us we needed to put people in place rather than finding relevant directors. As a result, the many egos appointed were not conducive to business. Today, we have two excellent non-executive directors, who act as ambassadors to the company and constantly provide advice as to where we should be heading.

Fishworks’ chief executive Roy Morris and myself now share the same vision of pushing the business forward and are very clear on how long we will continue to work together for. We are both young enough to have aspirations further down the road, but remain positive and focused about where we are taking this business. It’s a unique partnership and we never fall out.

Talk money, not fish, with banks

In our first month, turnover was £26,000, but we spent £27,000 on fish. It’s an expensive product, but we were convinced we could, eventually, make a fish restaurant pay and have since gone on to prove it by posting a £160,000 profit for the year to February. It’s been a struggle. Last year we restructured, pulling the sites into one brand. It was expensive but going forward it will pay for itself. The problem is that bankers don’t get under the skin of an investment and so never really understood the overall strategy and plan for our business, preferring to worry about immediate issues. I’ve spent a lot of energy explaining to bankers and creditors what we do and how we do it. But all they are ever interested in is the financial position, so stick to that when speaking to banks.

Respect shareholders

In 2000 when we joined OFEX (now PLUS Markets), we had 247 shareholders, many of whom were customers we knew well. But by 2001, Fishworks desperately needed more money to survive. One of the options we had was to file for receivership and then buy it back, using £300,000 we had to start again. But we decided we couldn’t do that to our shareholders and kept our integrity by ploughing the money we had into the business, determined not to give up. Now, to fund our expansion, we will have to raise money again, but being profitable should make it an easier process. We are mindful of extracting the most value for our shareholders and won’t take any decisions lightly.

Marc Barber

Marc Barber

Marc was editor of GrowthBusiness from 2006 to 2010. He specialised in writing about entrepreneurs, private equity and venture capital, mid-market M&A, small caps and high-growth businesses.

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