Growing Stronger: Metabolic Adds An Eighth Location with Help from Pursuit
Although gyms are among the hardest-hit businesses of the pandemic, Metabolic is proof that with energy and creativity, it’s possible to come through stronger: In the coming months, owners Matt Phelps, Cara Phelps and Kirstie Harris will open their eighth location.
We interviewed Matt to learn more about Metabolic’s incredible growth and how an SBA 504 loan through Pursuit is helping them achieve long-term plans to build equity and resilience through ownership of their gym locations. Matt also shares insight about creating new revenue streams and the profound improvements Metabolic achieved that resulted from tightening operations and renewing attention to every detail.
A fit foundation
Matt and his partners had all the credentials and industry experience needed when they opened the first Metabolic studio, including Matt’s master’s degree in applied exercise science, a slew of professional certifications and years of personal-training and coaching experience. Matt also had developed an eager and ready clientele – the parents of the high school and college athletes he trained.
“Parents saw the results that their kids were getting and asked me to help them,” says Matt. “I developed this training system at my previous gym, Phelps Gym. We honed it and developed the Metabolic studio concept and full program around it.”
“Our clients span all ages and fitness levels,” Matt says, “but we really target busy adults who are looking for an efficient and effective program. They’re a lot like us, in the 35-45 year-old range, we’re parents and caregivers and professionals with a lot of responsibilities. We need energy to get through the day, we want to feel and look our best and we need to get results quickly. That’s what Metabolic offers.”
Metabolic also has more than two dozen coaches plus administrative team members who serve nearly 300 clients daily at each location. Metabolic even has an app, Metabolic Macros, that they developed in 2014 so their clients could track workouts and nutritional goals and stay informed and engaged.
“Our app was a huge financial investment because we wanted something more sophisticated for our clients. The app has become an important competitive advantage for our program and a significant revenue stream for the business, too,” Matt says.
Smart growth requires advantageous loan terms
Building and outfitting a specialized gym is a huge financial outlay and the pandemic taught the Metabolic team that having ample cash reserves on hand is essential, particularly when the future is uncertain. Matt and his partners also knew that financial assistance would be critical to continue their growth strategy but they didn’t want to sacrifice equity and ownership with outside investors, so they agreed to explore loan options for the new location.
When their bank connected them with Steve Willard, a loan officer from Pursuit, the Metabolic team realized that buying the building for their new location was a viable option with an SBA 504 loan. Although the total project cost was substantial — $900,000 — the SBA 504 only required a 10% owner-equity infusion, which meant that they could hold onto more cash. The SBA 504 also offers a fixed interest rate for the life of the loan and longer repayment terms, which results in significantly lower payments than many other commercial loans.
The complex deal included several components and Pursuit worked with Matt’s team and the bank to bring it to fruition.
“Working with Steve and Pursuit has been terrific,” Matt says. “Pursuit has been amazing, responsive and knowledgeable. Steve quickly understood our business model and needs and we were totally impressed by Pursuit’s commitment to helping us.”
Contributing to a healthier community
“I won’t diminish the terrible impacts of the pandemic on so many people,” Matt says. “But I also try to find the silver lining. In our case, it’s that the pandemic forced us to slow down and reevaluate everything. We had to review and improve our systems and processes from end to end, and we’re actually a more profitable business now.”
He continues, saying, “It also made people realize that our health is everything and we can take better care of ourselves. We had to close our physical locations as part of the pandemic response, but we created an online training program, Metabolic Online, forty-eight hours after the shutdown and with that, we got new clients from around the country. Now, we have about 200 more members who learned about Metabolic from our online offerings. That’s an important revenue stream that we’ll keep building.”
Pursuit: Working to help businesses grow
Looking ahead, the Metabolic team plans to grow the core business through additional locations, including purchasing properties. They’ll also grow their supplement and apparel lines, with a goal to be a one-stop shop for all of their clients’ fitness-related needs.
“Our primary concern now is to see everyone get through the pandemic safely and as long as we do that together, we’ll be all right,” says Matt.
To learn more about how Pursuit can help your business, contact us today.