'There haven't been bumps in the road – there have been mountains in our path'

I STUDIED MY postgraduate diploma in nutrition and dietetics at the Glasgow Caledonian University.

I worked for several years in a clinical setting after that in the NHS and HSE, which gave me an understanding of how the health sector works.

However, I started getting itchy feet to move from the clinical side into the business side of things. So I left and joined one of the biggest players in the clinical nutrition sector: Nutricia, which is owned by Danone.

While working for Nutricia in a sales role, Professor Michael Barry wrote a report on the high use of oral nutritional supplements in Ireland and whether the state was getting value for money.

Professor Barry is the national director of pharmacoeconomics in Ireland, and basically advises what medications the state does and doesn’t pay for. All nutritional supplements fall into that bracket.

That was the first time the idea came into my head for Nualtra – a company that develops oral supplements to treat malnutrition at significantly lower cost than state reimbursement schemes.

I couldn’t understand why no one was developing the products, formulating them and manufacturing them in Ireland at a lower cost than the big players.

There are only really four world players that control the market for these products. There are some smaller companies, but those four dominate 90% of it. I thought, in a worldwide market with only four players, there is room for a fifth.

Paul Gough

Setting up the business

My first port of call was to approach Professor Barry and the HSE to tell them about my idea and to see if it was worth doing or not. We then went away, prepared our business plan, looked at the investment that was needed and made the decision to go for it.

We went through all the hoops to get it in motion, like compliance studies and palatability studies, gastrointestinal tolerance tests and approached Enterprise Ireland as well to get into the high-potential startup programme.

This was around 2013 and we secured a first round of €300,000 from Enterprise Ireland on top of the original investment we raised from private investors.

Enterprise Ireland then set us targets of having 12 employees and exports of €1.2 million within two years. We hit those targets fairly comfortably, so they ended up investing another €300,000 last year to bring their total support to date to €600,000.

We now have a total of 21 employees with plans to grow that too and we will be looking to expand into new international markets as well.

In November 2012, we launched our products in the Irish market, which was a total surprise to competitors. We blindsided everyone, which was a great achievement.

In my view it is always important to have a disruptor in any industry to keep the big players on their toes and to provide competition.

One of the key things we did in Ireland was reduce the cost of these products to the HSE to the tune of €12 million per year in reimbursement costs, providing real value for money for Irish taxpayers.

We’ve nearly doubled revenues each year and we’re at the stage now where the business is profitable.

Inspired into business

My father-in-law, Seán Corkery, would be a fairly prominent businessman in Ireland, inspired me to become an entrepreneur.

Seeing the buzz he got from the business world was a real attraction for me.

I wasn’t getting the same thrills working in the public sector. It’s fine for someone who wants a nine-to-five job and a solid career, but I would be a bit more prone to taking risks.

I was always in Seán’s ear asking questions about this, that and the other, and he has always been a loyal backer of the company. He has sat on the board since we launched.

I like to think that we have a board of directors that any company in Ireland would be proud of.

We have Leslie Buckley, chairman of Independent News and Media; Seán, who used to be head of operations for Dell; and our chairman is Dan Byrne, who used to work alongside Steve Jobs as vice president at Apple in the US.

We also have Professor Declan Walsh who is chair of the Carolinas Health System in the US, Sky Ireland chief JD Buckley and Oisin Gilbride, a chartered accountant.

Nualtra's product range

What is really important for a startup is to have experienced people behind you. They’ve done it all before and have had many successful businesses over the years.

It doesn’t really surprise me how far we’ve come. There’s a three- to five-year plan, but what we’re focusing on is the plan for 2017 and hitting our monthly numbers.

While there is a target to hit €20 million to €25 million in revenue within three or four years’ time, that’s not what we’re aiming for right now. All we’re focused on is hitting our target for March.

Once 1 April comes around, we’re back on zero sales and have to hit another number.

That’s the key for us now. If we continue to hit the monthly numbers, the annual budget will look after itself.

Doing things differently

One of the things I would have done differently is hire a financial controller much sooner than I did.

We didn’t employ one until we had a turnover of €3 million and the bank was always telling me I should hire someone. But I was always of the mindset that I wanted to grow the sales side of the business first and I didn’t see a financial controller adding to that.

If I was employing people, I always wanted to hire people who were customer facing because I felt they made the biggest impact to the business. I felt someone in the office crunching numbers isn’t going to grow my sales.

The biggest transformation we’ve had in the business has been employing our financial controller in the middle of 2016.

It has transformed our reporting, how we look at the business and how we spend our budgets. It has played a vital role in taking us from loss making, to operating profitability.

I wish I had employed somebody like that two years earlier. I know it is an added cost to the business, but it’s one that will save you money in the long run.

Low moments

There haven’t been bumps in the road – there have been mountains in our path. But that is the same for any startup. The major low would be some of the legal issues we have had to deal with.

At the end of the day, you have to defend yourself against attacks on your business and that’s something we will do 100%. We’ve been very fortunate that our chairman has taken over the management of the day to day legal issues we have faced.

This is where the experience comes in and he looks after those, which allows me to focus 100% on the business. You could end up focusing on tasks that mean you will have to take your eye off the business, which will take its toll on sales.

I owe him an enormous debt for the amount of work he has put into the business as a non-executive over the last two years.

I’m in all this for a reason though, because there is a buzz, but it’s also why I have grey hairs now. The highs you get, there probably isn’t anything like it.

Whenever you can take something from zero revenue to over €5 million and beyond, you get a real buzz. However it could not be done without the dedication of our tight knit group of employees.

Paul Gough is the co-founder of Nualtra. This article was written in conversation with Killian Woods as part of a series on business mistakes and what can be learned from them.

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