STOP Wasting Time Brandon Stevens' Proven Business Formula REVEALED! 📈 E95

0:00My dad still today gives the same advice. the only advice he's ever given us, and that is just keep on trucking. And so we just kept on trucking. We never had a plan. Talked to my dad today. You'll see me all stressed out. He'll come in and say, just keep on trucking. It's really good advice.

0:20Ladies and gentlemen, welcome to the most specialist Money Mondays in history. This is the first time, and hopefully the only time, we do this podcast not inside of the RV motorhome, but inside of the massive, fantastic, gorgeous Gravitas Membership Club here in Beverly Hills, California. 28 ,000 square feet. We are inside the poker room, the podcast room that they built that is freaking gorgeous. Like the quality, the content, everything you guys have created here, the details of it is mind going. Okay, as you guys know, on the Money Mondays podcast, we cover three core topics. How to make money, how to invest money, how to give it away to charity.

0:55But because this is a very special episode and I have one of my best friends on the planet here with me right now. We're going to mix in about business of building a membership club in the heart of Beverly Hills, take on this huge undertaking. Why did he do it? How did he do it? Talk through the concept of building such a gorgeous place and spending three years of his life when he already has massive amounts. I don't know, 17, 18 car dealerships we'll talk about. I think he's got like 50 or 60 gyms, probably more by now. Might have opened one just yesterday for all I know. We're going to go through all those things.

1:25But as you guys know, these podcasts average a little bit under 40 minutes because the average workout is 45 minutes. The average commute to work is 45 minutes. This episode will be between 34 and 38 minutes for your listening pleasure. Without further ado, I'm going to bring on Brandon Steven to give you a quick two-minute bio so we can get straight to the money. First of all, this is your first podcast outside of the motorhome? Yeah, hopefully the last. Oh, my God. Just for you. And this is my first podcast, and this is the first podcast in the Gravitas podcast. Exactly. That's three firsts.

1:52That's a lot. That's a lot of firsts. We've got to make it extra, extra good. Okay, so two-minute bio, which I hate, so I probably won't even use the old two minutes. I'm Brandon Steven. I am from Wichita, Kansas. I still live in Wichita, Kansas. People from Beverly Hills that have known me just from doing Gravitas are amazed that I still live in Kansas, but I love it there. I think first I'm the father, husband. I have six kids, six amazing kids, five daughters and a boy. I did start in the car business early on, like in my teenage years, working at my best friend's dad's car dealership. and then I just fell in love with the car business then my brother and I we were partners we opened up a health club we opened up our first health club in 95 no, 94 in my first used car lot which is a little bit bigger in this room in 95 and fast forward to 2024 we have 74 health clubs 74?

2:45you had like 60 like a week ago not a week ago Dan 8 days ago And 21 car dealerships. You had 18 car dealerships last time I saw them, which was a week ago. Dan's exaggerating again. Okay, nine days ago. We have a couple restaurants. We have a hockey team. We have a lot of things. But our core business are health clubs and car dealerships. That's our core business. And my advice to most people is stay in your lane, stay in your lane, stay in your lane. And then I keep going outside my lane and doing restaurants and hockey teams and a membership club. What business do I have? Going in the heart of the Golden Triangle and building this massive project.

3:23That was less than two minutes, right? Yeah, perfect. Less than two minutes. So you already had a steakhouse in Wichita. That was kind of like practice, right? Practice of this fancy steakhouse you built there years ago. But why this? Why go build 28 ,000 square feet in the heart of Beverly Hills, right next to Mr. Chow and Cipriani and all these fancy places? How did you decide, you know what? I'm going to stake my ground right here on the corner of Camden and Santa Monica Boulevard. The answer to that question is pathetic. There is no answer because I didn't plan this. It started out as I literally came to pick up my buddy Paul for lunch.

3:56And they had this patio outside that was very underwhelming for where it was at. And they were getting ready to put a restaurant inside in this little 4 ,000 square foot vacant space they had that was Wells Fargo. And I was talking to him. I'm like, I just don't understand. It just didn't work for me. It didn't make sense. And I was like, you should put a bar. This should be like a garden bar. This should be an outside bar. I mean, look where you're at. He just kind of shrugged his shoulders like, whatever, you're from Kansas. I'm like, what do you mean? It's not going to happen. You're not going to put, the city's not going to approve that.

4:28Okay, well, my question to myself was, how? How would they approve it? And that's literally how we started. And so it started out to be 12 ,000 square feet. And now once we started going, I'm like, we need this. We need this. We need this. That's a good idea. Let's do that. And as my business was growing, this was literally 37 months ago. That's when this project started. And I was like, I need this for my business. I need this. And that's kind of where it's kind of to work to. So it's open. Time has come. Today is day number nine. Wow. Wow is right. Are you happy? Are you ever happy as a business person?

5:06I get a lot of congratulations, you know, because I've been doing this for so long, building this. And so people are congratulating me so long. I don't want to say it just frustrates me. It irritates me when people congratulate me because I've done nothing. We are open. We are open. That's only one-third of it. I built this amazing – we built this amazing facility, but that's only one-third of it. Great service and great food are the other. And the club is 95 % done construction-wise. So, Dan, you know me well enough to know what do I see. Everything to fix. Yeah, I see the 5 % that's not done.

5:39That's just the way I've always been. And so I do need to relax. I do need to appreciate how far I've come and how fun this is. So walk me through why restaurant and not membership club. Like, why did you decide I'm going to go with membership club and go that route? As it got bigger. And so I started expanding here, you know, five, six, you know, my car business. I started expanding to Los Angeles. And as you know, I build a family like in my car business, my team. My team is my team and they're very important to me. My meetings are super important to me. And my celebration dinners with my employees are super.

6:14So it kind of dwarfed it. Like, I need a space for this. I need a space for this. There was a need for this in Beverly Hills. And so that's how it kind of dwarfed it. As I was building this restaurant and taking on more and more space, it just became a membership club. Like, it became like, okay, I can't just have everyone use this. I mean, I just walked you through and showed you that gorgeous, it's called the pool room, the conference room. Like, it's a gorgeous room that I need for myself. which means other businessmen also need that for themselves. And that was not going to be just open to the public.

6:44It needs to be just exclusive to our members. So as you're building it, it's getting bigger. It goes from 12 ,000 square feet to 20 ,000 square feet. You build this retractable roof in the middle of Beverly Hills. You build this huge patio. But then you started talking to me about cars hanging from the ceilings. And walk us through some of the extravagant parts. Like, why do those things? Do you think it matters to members? Do you think it matters to the brand? Why did it click in your mind? Like, I'm going to hang a fancy car from the ceiling. I like people to tell me no and then to overcome it.

7:12I love the challenge. Everyone says you cannot. I mean literally everybody, my designers, everyone says you're not going to be able to hang an 18 foot F1 car from the ceiling. It sounds silly. It sounds silly. And then now with that there's all kinds of sponsorships. I get to wrap the car. It's going to be a Red Bull car. I just found that yesterday. I'm doing a deal with Honda Racing Club. It's going to be a Red Bull car. 18 foot hanging from the ceiling. Actual red bull car um why not right i mean that's a separate room that's called the vault um later we're going to sell i'm going to sell naming rights to that room i built a huge so to get beverly hills for me to prove to drive a car through the curb up the curb into the building was a whole nother task a whole nother world but why not why not have a place where people could unveil their cars whether you're buying a car whether it's a f1 unveiling whether There is Bentley releasing their new model.

8:07That's what that room's for. Come to find out, we've only been open for nine days. That room's been rented out three nights. It's not even done. It's the room that's the most incomplete, and it's the room that people want the most. So that was the last, last edition. And on the wine side of it, talk us through, it seems like people can actually leave their wine here. They can store their wine here. Yeah, so that was something I did not know. The advice from Paul, who's my buddy with this building, he's like, Brandon, there's a huge need for wine storage in LA. People will pay whatever for wine storage.

8:37I'm like, okay, well. Sure enough, so we built these almost 400 wine lockers. I don't know if you know any of our memberships. We're doing what we call GEM, gym memberships, which is only selling a few of them. They're lifetime memberships. With that lifetime membership, you also get a huge 12 by 12 wine locker by biometric, so you walk up, you put your thumbprint in it, and the wine locker comes out. It's a gorgeous, gorgeous, gorgeous room. That room won't be done for a month. But we just started renting out those wine lockers, and they're almost sold out. So the entrepreneurs that are out there are like, I want to open a restaurant.

9:11Obviously not necessarily a 28 ,000 square foot one, but let's say they're 2 ,800 square feet. They want to open up their first thing. What was advice you would tell them when they're first planning? Not to do it. Not to do it. Not to do it. There you go. Not to do it. Thank you. That's probably not a good answer. Ask me again. I'm sorry. No, it's a great answer. By the way, I've been going very hard the last two years saying, Most people should not be entrepreneurs. They're not built for it. They don't realize that they're trying to be the entrepreneur because they heard someone fancy on social media say, you should just tell your boss that you're going to quit and go become an entrepreneur.

9:44They don't realize that you're not going to make money for one, two, three, four years, even when your business makes money. Let me explain real quick, guys. Let's say Brandon and I decided to start whitetshirts.com. In whitetshirts.com, Brandon and I crush it. We put in 100K each to start it. We got 200 grand in capital. We go do$1.5 million in sales our first year. Brandon and I should be happy, right? Does anyone know out there how much money that Brandon and I pull out out of the 1.5 million in sales? Zero. Rhymes with zero. Because what happens? Well, 50 % of it goes to the cost of manufacturing, production, shipping.

10:1712 % is going to go to the marketing. 5 % on the paid ad spend. We're going to get a convention booth. We're going to have staff. We're going to have employees. But then for year two, we're going to go from$1.5 million to$4 million. We crush it. brand and I freaking crush it. Guess how much brand and I pull out? Negative. Negative. Exactly. You know why? Because it's working. So if your business sucks, you're not gonna make money. And if it's working, you pour all the money back in and you take on debt or investors or loans or something to scale the business because it's working. You didn't get paid year one, year two, year three, et cetera.

10:48And so when I tell people that, it's hard for them to grasp. They just see fancy numbers on social media like, oh, they did 4 million in sales. That's gross sales. That's not net profit and you as the entrepreneur CEO are dead last to get paid from staff from vendors from lawyers accountants leases and everything between they're all first and you are dead last and even when you're dead last you're probably not going to get paid all right but I digress so Brandon Steven there's an exception to every rule of course there's an exception to that as well and I do agree completely what you said not everyone is meant to be entrepreneurs and that's not a negative thing right there's you can make so much money working for a company like myself where you're actually we actually enhance you being an entrepreneur inside of our company when that company already has the infrastructure already has all the things you need to expand your database which in essence is your business inside of my company right our company and that's what i've done inside my car business is i've enabled great people to market inside my company instead of doing everything you're talking about building your own infrastructure having all these resources, not having the funds to advertise and market, IT funds.

11:55I mean, there's so many things inside of my company that an entrepreneur can come in and just expand his business inside, which is good for some people. And some people want the pain. How did you know who was finished? They want the pain. They want the pain. And some people will just get lucky and have a great product that costs very little, and they get to produce a lot of income off it, and they get to take money home right away. but I would definitely say that's the exception to the rule. Some of you listening after I went on my tirade about entrepreneurs is hard. You definitely did, by the way.

12:29I'm very passionate about it. I can see that. Yeah. I just see a lot of people get stressed out, and I don't want society to think that you should just quit your job. I think you should save up money, have six to 12 months saved up in your piggy bank, because you're probably not going to make money for a long time, even when it works. It's interesting you say the word stressed out. I'm 51. I've been opening up my own. I opened up my first business at 11 years old. Wow. And it's crazy. and I kept on opening and I'm still opening businesses. And I'm still stressed out. Like it's crazy. My poor wife and my kids see me stressed out all the time.

12:58And some people will come up to me and say, gosh, celebrate, relax. And a true entrepreneur just is not, it's just never, it's always. I remember somebody told me 25 years ago, an entrepreneur in Kansas, a real estate guy that I just immensely still admire. He kept on saying, Brandon, it's just more zeros. And you're right. It's just bigger zeros. But the things that stress me out now would have literally murdered me 25 years ago. And the things 25 years ago that stressed me out now are like nothing to me. So it's just, they just get bigger. And the stress, unfortunately, gets bigger. So employee number two, four, seven, you can live a really good life.

13:35There's nothing wrong with not being employee number one. Imagine, think about it for real estate. Employee number four at your car dealerships or employee number four at your gyms. They make good money, right? They have great money, but it does not mean they're not stressed. Of course. Because if they're there and they're that high up inside of our company, they are like us. They want more. They see the 5 % that's not done. They see the 12 % that they could have got, they should have got. They see the crumbs. What they don't have to pay your rent, your insurance, your payroll, your liabilities, your lawyers.

14:07Stop making it sound worse than it is. Did I exaggerate something? You didn't exaggerate it, but I think the people that are that high up that have been with me for 30 years, they fill it with me. I love that. Yeah. I love that. And that's great for them. I just want people to be okay being employee number four, getting some equity, making six figures a year. Sometimes that's even better. For sure. Because you do get to go home at night and have a different – the mill tastes better sometimes. Your sleep – you do get a better night's sleep, I would say, for sure. Okay. So the tirade is over from that part of it.

14:39I'm guessing you're going to come back to the tirade, though. Well, yeah, I'm passionate about it. On the investing side of the world, you've chosen to invest a lot of capital into this project, 20 ,000 square feet. When you're making investment decisions, whether it's real estate, more car dealerships, more gyms, a massive location in the middle of Beverly Hills, how are you thinking about it? Are you talking to other people? Is it our advisors or partners, friends? Or is it you on a whiteboard like, okay, this is my crazy plan. This is what I'm going to do. Yeah, that$25 whiteboard has cost me a lot.

15:11I did not do a very good job of investing in this part. So I would definitely tell everybody everything I did in Gravitas, you should not do. It's gorgeous, though. Like I would say, actually, everything that I did, you should do the exact opposite. I started out with a great plan. I was going to make it small. My budget, I'm embarrassed to tell you guys this, but I'm going to tell you. My budget for the first 12 ,000 square feet was$13 million. And I spent two months value engineering with my team. two months to get it from$13 million to$11.4 million. And I'm like, I did it. I was really proud of myself.

15:45I signed the contract. Let's go. $11.4 million. Now, it's ironic that we got from$13 to$11.4 million. Not$11. Let's not round off to$11. And we're at$37 million is what I spent. And guess what? I'm still going. Right. You still have 5 % to finish. But I'm so happy that I got it to$11.4 million by spending two months to value engineer. The whiteboard says$11.4 million.

16:09so back to your question this is a horrible investment idea when I got it down to 11 I was going to get 20 partners, friends of mine and say this is going to be a passion project for all of us we're going to build this great thing and we're going to use it for ourselves and then as it got bigger and it got bigger the number got to 23 million I was for sure 23 million, I'm done I went ahead and talked to some of my buddies about it and said here's what we're going to do and I said we're close and I'll get the information to you when we get closer and the number got so big that I just said I can never bring somebody else in as a partner in this deal and so I own 100 % of it unfortunately when I say I, my brother and I are partners we own 100 % of that interesting enough Rodney, my partner, my brother I kept on telling him for the last 16, 18 months you need to come to LA to see what you're doing he's like I'm busy you got that part I'm like you need to come to LA to see what we're doing and as the numbers got bigger he came last week oh finally three years later yeah at month 36 he came by He had dinner.

17:07That's nice. Was it good? He loved it. It is fantastic. Okay. From an investing perspective, when you have infinite options because you are surrounded by so many people, relationships, you travel a lot, how do you decide between real estate, stock market, investing in companies, outside of just investing in your own business? So I know a lot of people. You know a lot of people. We have a lot of friends. We're very passionate with our friends. one thing I'll tell you is when you're in the position that we're in everybody comes to you with their new idea if it's not once a week anymore it used to be once a week people would come to me and say hey I want you to invest in this and now it's not as often because people know very clearly that I do not invest in other people's business I know that you're very good at that I am not I've done it a lot in the past and I'll tell you I'm zero for whatever that's not true maybe I'm one for whatever I've decided Rodney and I have decided we're going to invest in us So we're going to invest in projects we do.

18:01I have no problem spending an infinite amount of money borrowing it or in my own capital of a car dealership or a health club because I know for certain that I will win. That's not arrogant. It's because we have solid processes. We have an incredible team that's been with us, number four employees. They've been with us since the 90s. So we have confidence in our team for our two core businesses, health clubs and car dealerships. We know for sure that I can go buy a car dealership that's broken and fix it. That's not arrogant. Trust me, it's really not arrogant because it's such a fruit and process.

18:28And it's the team that we've built, the teams that we've built. We know for sure that we can go into market for health clubs, and we're going to do very well. Health clubs are a little different because it takes us years to curate the market. But we're good. We're really good at buying the real estate and then putting the best health clubs in the best places. So real estate is interesting because we're in the car business and the health club business, but we own all of our facilities. Oh, wow. So we're really real estate developers, but not really. Like the McDonald's model. Yeah, but for car dealerships.

18:58Interesting enough that Gravitas is the only thing in the world that I don't own. I'm leasing this space, which is very frustrating that I spent all that money on leased space. So the developer, if you're listening, would you like to buy this building at some point? Not now. I should have bought it in 2021. It was worth a lot less after I spend all this money. Yeah. Okay. So when you have brother focusing on the gyms, you're self-focused on the car dealerships, where does the trust come in? At what point you're like, you know what? I'm not going to play around your business. You're not playing around my business.

19:33You obviously listen to each other because you're brothers, but how do you get someone to stay focused on their thing? That's never there. And I still help Rodney and he still helps me. It's hard. Like Rodney is the face of the health clubs and I'm the face of the car dealerships, but it's interesting enough. We are both in the same business. Like it's about retention. Yeah. It's so much cheaper and so much better for us to spend money retaining a customer and retaining a team member versus hiring a new team member and trying to get a new customer. It's easier to retain the whole company. Anybody that's just come to work out, everyone that comes in, right, Roger?

20:04They come in and they get all excited to work out for the first, and they do, for the first six weeks, seven weeks, and they go crazy. And then they start to work less. That's where we come in. We're like, hey, listen, we've built the software. We know that Dan came in an average of three times a week. Now it's two times a week, and now it's one time a week. We're going to spend the money to retain Dan now. Let's give Dan a personal training session. Let's get Dan back in here and try to keep Dan as a member. Same with the car customers. People come to our dealership, nobody wants to shop for a car.

20:31I mean, it's like they actually equate it to going to the dentist, going to the car dealership. It's scary. People hate going to the car dealership. We've tried to change that, where people come in. We try to make it more of a personal experience, where your sales professional, you get to know them. And you get to know the manager. and that's the easiest and best way to retain a customer. And guess what? It's also the best way to retain a team. I spent my whole life building the culture. Building the culture around it. Making sure your environment's perfect. You do that and your customers fill it from your team, you win.

21:03So when you build a place like Gravitas or you build a chain of gyms or a chain of car dealerships, is there an end in mind? Do you build it with an exit in mind or do you build them as legacy for the family? What are your thoughts when you go into it? it's a great question do you have the answer my job i was hoping you have the answer that question because i don't um we've talked about a lot it's tough because our kids are getting older now rodney's you know we have rodney's three of his kids four of his kids now working in the gyms i have three of my kids now working in the business um it's interesting it's like because i don't we didn't do a good job of we didn't do a good job of thinking about legacy um we just started working and we kept working we kept on plow for it my dad my dad still today gives the same advice the only advice he's ever given us and that is just keep on trucking and so we just kept on trucking we never had a plan talk to my dad today you're looking you'll see me all stressed out he'll come in and say just keep on trucking it's really good advice so i don't have a great answer about legacy yeah okay let's go to the charity side of things why do you think it's important for businesses so let's say that car dealerships gyms or someone out there has a restaurant or insurance agency why should they have some type of charity component if they have to or not Why should they have some type of charity component for their staff, investors, partners, or vendors to be able to see?

22:21I don't know if I have a good answer to why they should. I've seen a lot in this realm. Like not only did, I would say not only did I used to be hit a lot about, and like people would always come to me and say donations, donations, donations. And I never said no. I hated being the guy that said no, but I didn't enjoy it as much. Writing a check to me is not that big of a deal. I don't mean that negatively. way like i never got great pleasure out of it because i never really saw the effects right um so about 15 years ago um we i started i had a poker tournament which saw kansas for kids at the time it wasn't called gift which is gfft genesis for fitness and tennis but it was just for these underprivileged kids and i saw my team my staff couldn't wait to volunteer their time to help they just couldn't wait yeah then they love they love to see me passionate about helping now it's this huge foundation that we started but it's only for local, local kids.

23:14And I get a lot of... It's pretty rewarding, is all I can tell you. It's pretty rewarding. For example, we give shoes to kids every year. It started out as a couple hundred and we ran out and now it's a couple thousand pairs of shoes we give kids to underprivileged areas in Wichita. My mom goes all the time and she cries every time. It's amazing. It's sad, but it's still amazing when you give somebody their first brand new pair of shoes. Now, Dan, we're talking about somebody that's 13 or 14 years old, and they get their first brand new pair of shoes. And it just blows your mind of how things that we take for granted.

23:51So to answer your question, how is it important? I don't know if it's important for everyone, but it was amazing when now how much of our team, our big team, they look forward to volunteering their time because they got that same feeling inside when they see it. Yeah. A lot of people think about charity. They think about money. They think about the initial reaction what Brandon said was like just writing a check. But charity really is more about the time and energy, the passion. Which is more important. For sure. Unbelievable. Because you can do those type of things. Like most of the charities that we've created are about people going out and giving out backpacks to the homeless or giving toys to kids or doing Thanksgiving food drives.