How to Get Lucky in Business: 6 Habits of Successful Companies
How to Get Lucky in Business: 6 Habits of Successful Companies
“I’m a great believer in luck, and I find the harder I work, the more I have of it.” – Thomas Jefferson
Long before spreadsheets and data analytics, Thomas Jefferson pinpointed the hinge that swings the door to success open for any business: hard work. But hard work alone won’t necessarily get you where you want to go. After all, it takes two hinges to swing a door. That second hinge is an innovative growth strategy that moves your hard work in the right direction. When companies put these two ideas to work together, they have a blueprint for getting “lucky” in business.
6 Ways to Make Your Own Luck
“Lucky” companies – the ones that achieve their objectives and outperform their competitors – know how to seamlessly blend strategy and execution in the pursuit of their goals. These business leaders take specific, intentional actions to reach their desired outcomes. Here are 6 habits you can take from their playbook to make your own luck.
- Do More With What You Have – Having more resources to work with is always great, but what if you’re strapped for cash or can’t hire new talent? Start with what you have. Learn how to leverage your people, brand presence, and data to identify opportunities for growth. Ask questions like these:
- How can we promote more interaction and collaboration among departments?
- How can we encourage employees to share ideas for greater efficiency or productivity?
- Can we draw more insights out of your data, or create more effective ways of capturing and analyzing the data you have to reach the right prospects?
- Where do we see efficiency gaps or data silos that can be corrected?
- Should we outsource non-essential tasks to free our internal team up for critical activities?
- How can we promote more interaction and collaboration among departments?
- Leverage CFO Leadership – Successful startup leaders know the value of a skilled CFO. That’s why 71% of startup unicorns valued at $1B or more have one on their leadership team. Whether you hire internally, work with an interim CFO, or use fractional CFO services, the right partner will help you cast a SOLID financial vision, strategically manage cash flow, assemble the right team, and structure your financial systems and processes for the best outcomes.
- Build a Strong Financial Foundation – Growth isn’t sustainable unless you have efficient financial systems and processes in place to support that growth. The process of growth can be unpredictable, with a windfall of revenue coming in one month and a downturn the next. To weather these storms and keep moving forward, your financial strategy should include:
- Smart Budgeting – As you create your budget, look for opportunities to leverage data for strategic asset allocation, respond to market trends, and invest in initiatives like hiring, technology, or outsourcing.
- 13-week Cash Flow Forecast – A cash flow forecast that looks 13 weeks ahead (rather than just 4-6 weeks) gives you enough flexibility to respond to market changes and revenue shifts. Use your cash flow strategy as a strategic asset so you can take advantage of opportunities to boost ROI.
- Strong Balance Sheet – It’s easy to get excited about revenue growth, but you also need to consider risks and liabilities. A strong balance sheet ensures that you are looking at all the right numbers so you can make better decisions.
- Scenario Planning – Scenario planning is another critical tool to help you plan for both the ups and downs of business. It allows you to document the strategic actions you will take in any given scenario so you are prepared for a downturn.
- Smart Budgeting – As you create your budget, look for opportunities to leverage data for strategic asset allocation, respond to market trends, and invest in initiatives like hiring, technology, or outsourcing.
- Update Your Technology – If you are still running your business on spreadsheets – or even QuickBooks – it may be time to upgrade to an ERP system. An ERP empowers you to standardize and automate systems and processes so you can leverage data effectively. With the right technology platform, you can quickly and accurately capture the right data, eliminate single points of failure, and automate processes to minimize human error.
- Track the Right KPIs – Track both leading indicator KPIs (looking forward to the future) and lagging indicator KPIs (looking back at what has already happened). Lagging indicators – such as monthly revenue, gross profit, and production costs – show you what outcomes have occurred already. Leading indicators – like bookings, pipeline quality, and new leads – help you determine how to make course corrections for the future.
- Position Your Business Effectively for Investment – If you have reached an inflection point in your business and you are considering a funding campaign or M&A opportunity, you need to understand what investors are looking for. A great idea and some initial success isn’t enough to sway the balance in your favor. Here’s how to ensure that your business is ready:
- Leverage Strategic Leadership – This starts with alignment in the C-Suite. Your CEO, CFO, and COO will work with a strategy advisor to plan, initiate, and execute your deal strategy. Make sure you have an experienced leadership team that can keep buyer confidence high and keep the deal moving.
- Assemble Your M&A Team – M&A requires a unique set of skills. You’ll need a top notch team of advisors, investment bankers, legal minds, and accountants to help you take your deal across the finish line.
- Clean Financials – Investors will want to see deep, detailed financial reports that demonstrate the validity of your business model and the value of your company.
- External Partners – If you don’t have the bench strength internally to manage your deal, consider outsourcing to an external provider. The right partner will work as an extension of your team to help you close the deal.
- Leverage Strategic Leadership – This starts with alignment in the C-Suite. Your CEO, CFO, and COO will work with a strategy advisor to plan, initiate, and execute your deal strategy. Make sure you have an experienced leadership team that can keep buyer confidence high and keep the deal moving.
Success Doesn’t Happen Overnight
It’s easy to look at an “overnight success” story and wish for that kind of karma. But the truth is that overnight successes are preceded by years – sometimes decades – of hard work. Nobody ever got lucky by wishing for it.
In 2020, Vu Studio founders Tim Moore and Mark Swanson lost 80% of their business as a result of the pandemic. They responded to what could have been a crippling loss and turned it into an opportunity to build a groundbreaking virtual reality studio that is changing the future of film. Their inspiring story is a case study in how to find opportunities for innovation and growth, even when things seem to be spiraling out of control.
The takeaway? Growth is a journey that will include both successes and setbacks. When you plan for successes and respond to setbacks with grit and determination – and the ability to pivot strategically as needed – you’ll discover the secret to making your own luck.