was no damage to the Tribeca location structurally, the damage to the business was dramatic. “We put in an application to the Downtown Alliance and we did get a grant from them for $25,000. They also gave us a $25,000 loan.”
Tribeca would finally become more accessible in December, and 24/7-Tribeca would open its doors on January 2, 2002, one year after it was purchased, six months behind schedule, and $150,000 over projected costs. Like the city around them, Washington and Wilson had to assess their damages and begin rebuilding. “We were ecstatic [to finally open],” says Wilson, noting that the delay had been so long some thought the duo had abandoned the venture altogether. “Just the fact that we opened gave us an incredible feeling of accomplishment.”
But their victory came at a high cost. “We lost 20% of our presales at 24/7-Tribeca after Sept. 11,” says Washington, “so, I put my past blueprint to work, printing flyers to spread the word that the gym was open. In less than one month we signed 373 new members. Tribeca was signing about 15 new members per day at one point, exceeding even our expectations.”
With all three gyms finally up and running — the partners can finally take a deep breath. Washington smiles, thinking back to the disappointments, sorrows, and tragedies he and Wilson had to endure in 2001. Four months behind on rent, to the tune of about $60,000, a payment plan was arranged with the Tribeca landlord. For additional revenue, space is being rented out to a beauty salon and in-house massage specialists for about $2,500 and $1,500 a month each.
“When someone says ‘growing pains’ — that’s exactly what 2001 was,” Wilson asserts. “From having to keep up with creditors and having [revenue from] 24/7-Gramercy Park basically fund [24/7-Tribeca], it became a money pit after a while — it was just a nightmare. And when you [add] Sept. 11, it became even worse. I would never have guessed that it would have been that difficult.”
But the worst is likely over for the enterprising partners. “We expect Tribeca to do about $1 million [in 2002],” says Washington. “About $250,000 of that will be profit,” he says. With all three gyms, which have an average annual membership fee of $449, and about 10,000 current members, Washington and Wilson expect to bring in $2.3 million by the end of 2002 and project revenues to reach $3 million by 2003.
It’s 8:00 p.m. during the summer of 2002. Washington smiles as he watches the activity at 24/7-Tribeca. “It’s been quite a year,” he says smiling, as his business and the city in which it operates are on the road to full recovery.
We asked two experts, Sean Toomer, a Life Fitness Academy trainer with a master’s degree in education, and Les Powell, an advisor to the Minority Business Development Agency, to review Washington and Wilson’s performance, recommend strategies, and identify any land mines that may lay ahead in the entrepreneurs’ most challenging year.
PRICING YOURSELF OUT
Both experts agree