Marin SBDCSan Rafael, CA

“One of the best things about working with the [Marin] SBDC is that it helped me grow at a pace I could handle. It was fantastic that they also shared my vision for creating the very best indoor cycling studios.”

Alan Roberts

Pelo Cycling and Fitness was founded by Alan Roberts, whose passion for cycling and fitness has helped him personally experience the impact that riding a bike can have on one’s life. His vision has been to make cycling classes and fitness easy, available and fun for people of all fitness levels. Located in San Rafael, CA, Pelo Fitness is a dedicated indoor cycling studio built from the ground up to give people the best cycling and fitness experience possible. In addition to indoor cycling, Pelo offers Body Align and TRX strength training classes - all designed specifically to complement and complete the cycling workout. In one hour, with professional instruction, great music and the top-of-the-line bikes, Pelo offers a work-out calibrated to meet each person exactly where they are.

When Alan first started working with an SBDC advisor, Pelo had many challenges common to start-ups in their first years of operation. One of the biggest challenges was managing liquidity on a monthly basis. There was not a huge reserve of cash to draw upon each month and a portion of the start-up expenses being held as debt could benefit from being restructured. Alan was also concerned about the under utilization of his facility. With rent at a premium and lots of unused space, Alan needed to find something to contribute revenue towards Pelo’s bottom line. Furthermore, Alan’s vision from the start was to create and grow a business that investors would be interested in. He was unsure what type of business Pelo needed to be to secure investor attention and capital. He did not have a clearly defined business model for growth and needed a solid business strategy to secure investment capital for expansion.

Alan and his SBDC Business Advisor spent several meetings analyzing what historical information was available to create forecasts and budgets, so Alan could start predicting revenues and expenses to ensure there was adequate liquidity on a monthly basis. Pelo’s current debt and equity tables were examined to understand what opportunities were available in order to reduce the amount of cash-out on a monthly basis and to service start-up debt. Paul and Alan also explored a variety of options to find a better way of utilizing the rest of Pelo’s unused space in hopes of generating additional revenue. As Pelo was creating a lot of forward progress on the financial aspects of the business, Paul and Alan turned the focus of their meetings into building a business model and an expansion plan that would allow Pelo to grow to five regional locations and attract the investment capital required to fuel expansion.

Since Alan began working with the SBDC, Pelo’s has experienced phenomenal growth. What began as a half empty studio has turned into a fully fledged fitness center with packed classes every weekend. In 12 months Pelo’s total sales increased by 25 percent, thanks in part to Pelo’s empty space being converted into a boutique. Alan was able to able to obtain equity investments and level out Pelo cash flow with guaranteed monthly income from different fitness programs and packages. The company has been able to hire 14 new employees, and in 2014, will be opening another location in San Francisco.

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Funded in part through a cooperative agreement with the U.S. Small Business Administration. All opinions, conclusions or recommendations expressed are those of the author(s) and do not necessarily reflect the views of the SBA or HSU Sponsored Programs Foundation.