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Steve Little is the CEO and Managing Partner of Zero Limits Ventures. Steve first started his entrepreneurial career at the young age of 13, and sold his business a few years later for a 6-figure sum. Steve has over 40+ years of experience in entrepreneurship in a wide range of industries, which is why he is the perfect guest for this week’s topic. On the show, Steve discusses some of the important factors you need to consider, to drive value in your business.
Steve started just like any other kid on the block, cutting his dad’s lawn. After two years of taking care of his neighbors and clients’ lawns, and having 35 employees under his belt, he sold the contracts he acquired for a little over $200,000. He didn’t realize it at the time, but when he looks back, this was one of the earliest lessons he learned about how to drive value into the business.
There are all kinds of value hidden inside the walls of businesses. There’s valuation that’s tied up into constraints, like things that exist in your business that’s keeping it from being valuable; and there are things outside the business, like opportunities in the marketplace that owners are not fully leveraging.
Today, when Steve sits down with prospective clients, he asks two questions, “What’s your exit strategy?” and “Do you know what drives the value of your business?” Many people are unable to answer these questions.
Steve often cites Amazon buying Zappos as one of the prime examples of high value. Why did Amazon pay a billion dollars to acquire Zappos? It wasn’t for their products. It was for their company culture. And if you talk to the Founder of Zappos, Tony Hsieh, he will tell you he built the Zappos culture for that exact reason; he knew someone would want to buy the culture, not the products.
You may not want to sell your business today, and that’s okay, but you really can’t know what your business is worth unless you understand who would buy it, why they’d buy it, and what they’d be willing to pay for it.
The Valuation Playbook by Steve Little
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Scaling Up is the best-selling book, by Verne Harnish and the team at Gazelles, on how the fastest growing companies succeed where so many others fail.My name is Bill Gallagher, host of the Scaling Up Business podcast and a leading business coach with a Gazelles. We help leadership teams to get the 4 Decisions around People, Strategy, Execution, and Cash right so that they can Scale Up successfully and beat the odds of business growth success. Our 4 Decisions are all part of the Rockefeller Habits 2.0 (from the original best-selling business book, Mastering the Rockefeller Habits).