After successfully running a company for a few years many entrepreneurs think of expanding their businesses but are short on funds. This is where the need for IPO arises. Many entrepreneurs wish to add more products to the existing product line, others wish to expand their business by opening a branch at a different location(s) and many others have yet other reasons.
At this juncture to acquire more capital inflow in the company the entrepreneur is ready to share with the public and go in for the initial public offering (IPO).
For executing a successful IPO the business owner and management requires a tremendous amount of hard work and dedication. One should consider the reason for going public and the timing of the launch of IPO, as both have a significant impact on how things will turn out at the end.
It is exceptionally important to plan a solid strategy well in advanced and as far as possible all potential problems to be identified and if possible rectified.
Discussed here are a few matters which should be considered in advanced before the launch of the IPO.
A strong and experienced CFO
Successful ventures are heavily dependent on those persons who are guiding it, mostly the owner and his team members. Though it is more of a financial matter, hence chief financial officer has a major role to play. He/She will be responsible for the creation and implementation of IPO strategy.
Though other members will also be involved throughout the process who can be the company’s internal executives, external professionals are also required who are familiar with ins and outs of an IPO.
Before entering into water it is better to test first. One should analyze the company’s past performance and financial standing. Identifying existing and potential collaborators or partners and how much the prospective investors are interested in the company’s betterment.
Assess stakeholder’s readiness and interests
One should take into account the factors and circumstances for which the company is going for IPO, an honest assessment should be done. Since the reality of the situation should not be bye-passed with the greed and impatience only to make money. Stakeholder’s interest should be in line with the company’s mission and vision.
Assessing company standing and adjusting to the future needs
Conducting an honest assessment of the company’s standing will help you fix any irregularities or shortcomings if they exist in advanced. Once a company goes public it is bound by many rules and regulations that govern a company which does not apply to a privately held company and may create problems at the later stage. Financial and operational matters may need some change and that will consume some time. It is better to make these necessary adjustments to see how the company will perform once it goes public.
Allocating appropriate manpower
Making the transition from a private domain to a public domain will affect every aspect of the company. Hence one should have the appropriate amount of manpower and resources so that the staff can easily handle the tasks assigned to them. Though it does increase the costs allowing any sort of lapse or falling off the track may prove disastrous to deal with the upcoming situation. Care should be taken to manage and allocate appropriate resources at present then to feel disappointed when things go out of control.