Powerhouse Gym bulks up
POSTED: Sunday, October 26, 2008
Alvin Paguio parlayed his passion for powerlifting into a heavyweight business.
» Address: 432 Keawe St.
» Phone: 532-8000
» Hours: Monday-Thursday, 5 a.m.-11 p.m.; Friday, 5 a.m.-10 p.m.; Saturday, 7 a.m.-8 p.m.; Sunday, 7 a.m.-7 p.m.
» Members: 3,500
After more than a decade as a competitive powerlifter - hauling up as much as 585 pounds - Paguio and his wife, Keri, a physical therapist by trade, started Powerhouse Gym on Keawe Street, catering to hard-core lifters and the majority of gym-goers who enjoy less intense workouts.
The couple opened the more than 22,000-square-foot gym in July 2007 and last month inherited in excess of 1,500 members as part of an agreement with Gold's Gym, which closed a few blocks away on Aug. 31. It has about 3,500 total members.
The deal, valued at between $39,175 and $54,845 based on fees of $25 to $35 month, changed the game for the mom-and-pop operation, which suddenly became a larger player in the local fitness market.
"We actually took a risk starting from pretty much dirt level and we're going to bring this thing up into a big business," said Alvin, 42, a Pearl City High School graduate.
The company's 13 employees also believed in the concept of a low-key gym that supports the health of its members in a family-type environment.
"Our staff like us believed in the concept of why you have a gym," said Keri, a 39-year-old Punahou School alumni. "We're providing a service that sows into somebody's entire well-being. It's not just cholesterol numbers; it's the way they feel about themselves."
Though the underdog in the local fitness industry - competing against larger corporate mainland operations such as 24-Hour Fitness - the couple like it that way. The gym is so personalized that they often notice when regular members miss their weekly routine.
"We'll say, 'Where were you last week?," Keri said. "It gives members more sense of actually belonging to the whole Powerhouse family."
They have found a niche in the highly-competitive fitness industry by offering the latest and top-of-the-line equipment on the market. They lease much of their equipment so that they're able to bring in updated workout machines every three to five years once the lease expires.
"We can't compete on hours," Alvin said. "We just bring a better quality gym equipment and constantly try to bring in the newest lines and models of cardio equipment."
The business began as a dream for Alvin, who at the time in the early 1990s was heavy into the strength sport and worked at Spa Fitness Center doing sales and consulting. But he didn't know at the time that his endurance-based hobby would prepare him to withstand the ups and downs of a volatile business that requires much discipline, perseverance and strength.
It wasn't until he started in 2000 his first business distributing newspapers that he understood what it takes to build a company from the ground up.
The couple, who married in 2006, decided to take the leap seven years later, investing some $300,000 from savings, lines of credit and home equity.
"It was mainly Keri telling me, 'Are we going to do this all our lives or are we going to do something else?," he said. "You can't start a business unless your spouse is very supportive - that is key. I literally had to sell her so she was my first membership. I thought if I could sell her on the gym concept idea and membership concept I knew I could open up a gym."
But it was a scary start at first since the local banks were not as open as his wife to the idea. After being turned down at least half a dozen times, the couple got a break from a mainland bank and later Central Pacific Bank bought into the gym, which they operate through a licensing agreement that cost $16,000 for the first year and $6,000 every year thereafter.
Keri, who works on-call with Castle Medical Center, had to balance her main career with the fledgling business and now 14-month-old son Garin, born a week after the gym opened. She manages the gym's personal training, group fitness programs, front-desk operations and membership accounts, while Alvin manages daily sales and operations and business accounting. Both average 12 to 14 hours workdays.
The Paguios are negotiating with potential investors to expand Powerhouse Gym to other locations, including a site in Leeward Oahu.
Meanwhile, they're helping other small businesses get their start in the industry. The husband-and-wife team have subleased space to Muscle Inc., which sells nutritional products, brought in independent personal trainers and are working on leasing space to a locally-owned smoothy and deli operation. Their goal is to reach 5,000 members by year's end.
"We figured we'd give ourselves about two to three years to make it," Alvin said. "It's bumpy all the time, there's always obstacles and hurdles you've got to jump, but maybe now the hurdles are not as high as they used to be."