A publicly traded company is one whose ownership is dispersed among the general public. The ownership takes place in the form of freely traded shares and stocks. Taking your business from a private organization to a public company is a big decision that requires much more than just a skilled marketing department. Before you dive in, it is important to consider whether your business is truly ready for an initial public offering (IPO). To succeed as a publicly traded company, you need to ask yourself some of these key questions.
Have You Experienced Healthy Growth?
The first question to ask yourself when considering going public is whether your company has grown adequately since its inception. Healthy sales growth is sustainable and solidly profitable. Investors will not be interested in an organization that has not been successful. Make sure that your business is in a good place to demonstrate potential growth for the future.
Do You Have A Strong Accounting Team?
Before going public, you need to have a strong accounting team. This helps to prepare your business to successfully navigate a launch of this size. You want to have the right accounting structures and statistical programs in place. Many private companies do not have the finance discipline that they should. Before your business goes public, make sure you act like a publicly traded company by having a strong accounting team.
Are You Prepared To Communicate?
Many business owners must realize that publicly traded companies are constantly subject to scrutiny. Before you can release stocks and shares for your company, you must make sure that you are prepared to communicate. Transparency with the public is essential to your success. For the ultracapacitor market, the volatility requires frequent updates to shareholders. If you are not ready or able to share everything with your many investors, you may not be ready to go public at all.
What Is Your Value In The Market?
Before you decide to release your business to the public, you must consider what your value is in the industry. If your organization is average at best, you will not receive a lot of investment offers. The market is driven by top tier companies that promise innovation and success. If your business cannot offer something valuable, becoming publicly traded may not be the best choice for you. Take the time to build your company’s reputation like Philip Nel before releasing an IPO. This will ensure that people value and want to own a part of your business.
Are Your Processes Optimized?
Another question you should ask yourself, how are your current business practices? The process of becoming a publicly traded company is a long one. It can take months to work on an IPO. Furthermore, this can eat away at your management team’s time. In order to prepare for this, you must make sure that your organization can handle less oversight. Optimizing your business processes will help keep your company on track as you make the transition.
Is Your Revenue Predictable And Consistent?
Finally, the last thing you should ask yourself, is if your revenue is predictable and consistent? Healthy growth aside, it is important that your organization have reliable profitability like Millennial Media. You may be doing well for a period of time, but investors will look at the overall picture. Maintaining a steady revenue is an important part of showing that your company has potential for major success.
If you feel that your business is ready to be publicly traded, take a moment to consider these questions above. Releasing an IPO is much more complex than many would believe. Communication, revenue, forecasting methods and your overall reputation will impact your success. Be sure that your business can be approved for all of these considerations before being publicly traded.
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