RevBody was ramping up business just before the pandemic. As it hit, they found ways to grow, ultimately replacing a gym that failed.
SAN DIEGO COUNTY, Calif. — Rent is sky-high, gas is expensive, and your money doesn’t go as far as it used to at the grocery store– we’ve all noticed the squeeze our economy is putting on us.
Just like every game, an inflated economy has winners and losers, especially during a pandemic. Some win because of the economy, while others persevere despite it.
RevBody in Eastlake opened its doors to clients at their location off Showroom Place in October.
Co-owners Xavier Barrett and Oscar Eberle started with about 10 clients, working out of Eberle’s garage during the pandemic.
“It was like playing Tetris in there,” Barrett joked. “You know, trying to… ‘let’s put this cardio equipment here, this last pull down there.'”
As people sought exercise and a way to burn energy in the height of the pandemic, RevBody grew. Barrett says they got to work, hiring experts to help them with legal paperwork and finances to formally create the company. And with about 400 clients now, move into their new location.
“We actually used to train in this gym, but it used to be another gym,” Barrett said. “We used to rent out the room to build up our clients.”
Numbers from the California Secretary of State show RevBody is one of more than 426,000 new businesses formed in the state in 2021.But in the same year, more than 131,000 businesses filed to shut down for good.
That means California saw about about 295,000 true new businesses in 2021. That’s still a steady trend up from 2020’s 237,928 net new business filings, and 2019’s 185,390 filings.
“There’s a lot of churn in the economy,” Eli Berman, UC San Diego Economics Professor and Faculty Member at the School of Global Policy and Strategy, said. “By churn we mean there are businesses that fail and there are businesses that start up again.”
Berman says that churn is a sign of an active and healthy economy. However, Barrett’s gym replaced one, in the same location, that shut down during the pandemic.
“That thing that was a Thai restaurant last year and is now a Cambodian restaurant, will show up in your data as a new business start up,” Berman explained. “But you have to keep track that there was another restaurant that closed when that restaurant opened.”
Revving up the business in a pandemic-induced economic downturn is a bold move which is paying off for Barrett. But Berman says we have to look at other factors too, to gauge the health of the economy, like inflation and employment.
“Inflation is what everybody’s talking about right now, but inflation has winners and losers,” Berman said. “It’s an unusual moment… because it really depends who you are.”
For example, Berman says homeowners in San Diego hit the jackpot, as their properties appreciated by 15-20% percent in just the past year. At the other end, people at-risk of unemployment, facing high rent, and without a raise in salary could face the most up-hill financial battle.
“Their rents are up about 18% in the county in the last year, gas prices are up 18%, food is up 5%, they could really be hurting,” Berman added. “So the economy’s really improved for some people, but not for everybody.”
Berman is part of a research team at UCSD that is working to find out if the federal government’s aid, like the extended child tax credit, helps people and kids, and in what ways. He says so far, their data shows 15 percent of families who are eligible never collected their money– either because they didn’t know about the benefit, or they never filed taxes, so the IRS didn’t know they exist.
“So now here comes the crunch,” Berman said. “You’ve gotta help families know about the program and know how to file taxes if they’re going to collect this money they’re eligible for.”
Berman says as part of their study, the UCSD team has reached out to community partners like San Diego for Every Child, the International Rescue Committee, the Schmitt Futures Foundation and others to help with tax prep services, in turn helping families collect their credits.
Helping the community is one reason Barrett, back at the gym, is planning to use his success to lift other black and brown-owned business– as he and Eberle turn the gym they once worked at, into their own pandemic-built empire.