In a city brimming with breweries and aspiring to become more bicycle friendly, beer and bikes turned out to be the perfect business combo.
In 2010, childhood friends Derek Collins and Ryan Lloyd founded Milwaukee Pedal Tavern, a rentable party on wheels in the form of a 16-seat bicycle-powered tavern.
The entrepreneurs were inspired by a trip to Minneapolis to make Brew City the second in the United States to have a pedal tavern.
Convinced the eccentric idea would be a hit, Collins worked 100+ hours a week in the first year, driving every tour on top of his full-time job. The duo saved enough money in a year to acquire three more vehicles and put all of their money back into the company until 2012.
“This was the best practice for us as we were striving to expand,” Collins said.
What’s the Purpose?
In October 2012, the growing business ran into a hurdle: The city of Milwaukee and state of Wisconsin informed Milwaukee Pedal Tavern that it was breaking state law by having open intoxicants on the street. The existential crisis caused the company to lose 50 percent of its riders in one year.
Collins and Lloyd weren’t going down without a fight, however. They began working with then-Rep. Jeff Stone to legalize pedal taverns statewide. Their bill received wide bipartisan support from elected officials and the public, going into law Jan. 1, 2014.
Collins’ advice in surviving legal challenges is “to reach out to your community and let them know who you are, what you do and why you’re starting the business because they will treat you positively.”
Collins met Rick Gorko of the SBDC at UW-Milwaukee in the spring of 2014 when they next navigated through the city ordinances. Gorko helped Collins and Lloyd understand the issues and documents so that they could adjust to be a completely legal operation.
Gorko, who still works with Milwaukee Pedal Tavern, also provided help on the financial side: business plan development, SBA loan assistance, document compilation and cost projections.
“Derek is eager to run a more organized business and is very receptive to guidance. I like his attitude!” Gorko explained, “He and Ryan have great marketing minds and a unique concept.”
Milwaukee Pedal Tavern has seen consistent 20 percent annual growth from 2014-2016, attributed in part to word-of-mouth advertising and strong community support.
In 2017, Milwaukee Pedal Taverns went on to explore a new business vehicle: boats.
Accomplishments with SBDC at UW-Milwaukee
- Expansion to Paddle Taverns through agreement with manufacturer
- Financial planning
- Identifying additional sources of funding (SBA loans)
- Guidance on fiscal responsibility
From Pedal to Paddle
Paddle Taverns follows the same concept as Pedal Taverns, with paddleboats instead of bikes for the bar-hopping and BYOB. In their first season, the two boats have been a hit. A 1-hour, 45-minute trip can accommodate 14 people, with a captain, first mate and coolers on board.
“Wisconsin SBDC’s mission is to expand the economy and promote employment in Wisconsin, one business at a time, and Pedal Tavern is doing that by doubling their employees, from 20 to 41, as well as working to become a staple Milwaukee tourist attraction,” Gorko said.
With eight bikes running full time and one replacement on hand, Pedal Tavern served 2,000 riders in 2016 and is on track for 2,400 bike riders plus 500 boat riders in 2017. The revenue generated in 2017 “will allow us to pay off the debt on the current paddleboats as well as acquire more for the 2018 season,” Collins said.