When a privately held company goes public via an Initial Public Offering, it is one of the most significant milestones in the company’s entire history. The way it works is that the company issues share certificates to investors and gets listed on a chosen stock market. After the listing, the company’s shares can be traded on the market.

It is an extremely complicated process with a maze of regulatory and compliance requirements. But the benefits, in terms of finance, are just as high. A successful and well-subscribed IPO can instantly turn a small regional company into an international corporate heavyweight.

The biggest benefit of an IPO is obviously the massive infusion of capital for financing ongoing operations and planned expansion of the business. It improves the company’s liquidity position and helps reduce debt. There is also a big uptick in brand recognition and trust in the company’s products and services.

The way an IPO works is that the SEC needs the company to file a registration statement along with a prospectus detailing every aspect of the company and its business. The prospectus will also include the company’s post-IPO plans and how the company plans to utilize the funds.

Underwriters and the company’s accountants are required to work together to fulfill these regulatory requirements. They will provide the management with advice on shifting from a private decision making process to a public company answerable to the board and shareholders. The most important thing the underwriters do is help decide the price and number of shares that the market can absorb.

There are significant post-IPO reporting and disclosure requirements for public companies. Publishing quarterly financial results and holding an annual shareholder meeting are two such examples. One big area where change is almost inevitable after an IPO is the management. Every company that goes public ends up hiring new executives who have experience in managing large public companies.

The success of a public offering largely depends on the growth potential of the company and its sector, and whether or not the business has sound basics and a revenue model. But many IPO’s have failed inspite of having all this. It may be because they didn’t choose the right market or the right price, or chose the wrong time to go public.

In Canada, for example, IPOs tend to be smaller than the ones in the US. They are also slightly under-priced because the market doesn’t have the same strong appetite for risk. European IPOs have to look at a lot more factors and have a smaller window, since problems in any EU member nation can affect markets in all the other nations.

During the dot-com era, anyone with a website willing to fulfill the regulatory requirements could launch an Initial Public Offering and become an overnight millionaire. Things are different now, and investors are looking for a safe bet with long-term potential. The process of getting listed as a publicly traded company is long and hard, but the flood of money that accompanies a successful IPO is well worth the effort.

In order to grow and expand, many companies will go through the IPO process and make an Initial Public Offering (IPO) to the IPO Market. A new IPO valuation is usually made, and the IPO Canada are becoming more common nowadays.

Article Source: https://EzineArticles.com/expert/Adriana_Noton/446836

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Greed and Fear.

Two Emotions that play a bigger factor in the success or failure of humans than any other emotion we experience. Both fear and greed refer to an intrinsic emotional state. Tens of Millions of dollars have been made and lost based on these 2 emotions alone. In trading, in business and in relationships. So why do so many educational courses, stock trading books and online courses avoid this topic all together?

Perhaps they are not avoiding the topic of emotions, Perhaps by teaching certain methods and skill sets to their readers they are in fact dealing with the emotional side of trading head on!

It is well known that emotions create a certain amount of pleasure or displeasure. It is also known that emotions are networked with mood, frame of mind, desires and passions. The list goes on… So how do we as individuals develop a skill set to navigate these emotions in business in trading and in life?

Charles Darwin argued that emotions actually served a purpose for humans and rightfully so, If our emotions have been evolving for over 2 million years. Should we not be using these amazing skills to our advantage rather than placing blame on them for poor decision making? It is my belief the poor decision making has nothing to do with emotions and everything to do with laziness and lack of planning.

A Lesson From One of the Greats!

I would be doing my readers a disservice if we did not mention the strategy of Warren Buffett. One of the most successful investors of our time. Warren Buffet stuck to his strategy and profited greatly. Warren Buffett showed us just how important and beneficial it is to stick to a plan. When deciding whether or not to invest in a company himself, Buffett and his partners follow a few simple guidelines, one of which involves trying to determine the company’s longevity.

As the market becomes overwhelmed with greed, the same can happen with fear. When stocks suffer large losses for a sustained period of time, the overall market can become more fearful of sustaining even further losses. But being too fearful can be a grave mistake. It is precisely at this time successful investors and traders alike make their move. This is where the real money is made.

Just as greed dominated the recent Cryptocurrency boom or fear dominates the headlines on potential trade war outcomes, investors quickly move around from one “secure” investment to another. It becomes a constant game of cat and mouse.

This flooding in of money to the stock market shows a complete disregard for many technical indicators that continue to scream a correction is inescapable. Retail Investors seem overjoyed with the flooding in of headlines that read ALL TIME HIGH. Should retail investors be overrun by fear of a major correction?. Granted, losing a large portion of your retirement portfolio’s worth is a tough pill to swallow, but even harder to digest is the possibility of missing out on the massive gains the market is currently offering investors of all experience levels.

Having a clear understanding of my own personal goals, a understanding of my success and creating a list of my OWN wants and needs rather than taking dreams of others and trying to reach them has been a colossal factor in putting out the greed flame in my own trading and daily decision-making.

I have also added a link of “Must Read” Books that have been advantageous in my journey of reigning in my emotions on decision-making. I will update this as I see fit..

One method I have found to be helpful is to be careful on how I measure success, wealth, goals and most importantly happiness. It is far to easy these days to allow outside influences affect our happiness and success. Social media blasts us day in and day out with the success of others.

Article Source: https://EzineArticles.com/expert/Farryl_Buchman/2585246

Article Source: http://EzineArticles.com/10002143

Too often, we consider things, based on labels, perceptions, etc, instead of delving, deeply, and considering, the true impacts, and ramifications, and possible, paths – forward! At – current, one of the most – discussed, topics, is, inflation, and what it might mean, to all, of us! However, these considerations, often, proceed, in an overly – simplistic way, which serves very little purpose, in a relevant, and/ or, sustainable way. In fact, most people are being affected, by inflation, and inflationary trends, but, little, common sense, considerations, are focused – upon! With, that in mind, this article will attempt to briefly, consider, review, examine and discuss, 5 areas, where most people, are feeling inflation (or, will, soon), to a significant degree.

1. Groceries/ household items: Anyone, who goes to the supermarket, has seen, their bread – basket, items, such as groceries, and other, household items, go – up, significantly, in – price, in the past year, or so! What has driven this? Probably, the single – biggest factor, is, supply – chain, considerations, because, items are more difficult and expensive, getting to the stores! One factor, is, of course, Supply and Demand, because of this. This concept states, when supply doesn’t keep – up, with demand, prices usually rise! Another factor is probably, greed, and, also, related to pandemic ramifications, and impacts. How long will this continue, and what strategies, might address this?

2. Utilities/ oil and gas, etc: We are seeing, rising costs, in electric rates, as well as heating costs! Oil and gas prices are rising, at a fast – pace, and this, causes, everything, else, to get more expensive, also!

3. Gas/ fuel, at the pump/ station: We are near, or at, record – high, prices, in terms of what we are paying, at the pump! Some of this, comes, from, rising costs of labor, while much is also, due, to greed, from some, or several components, in the delivery – chain! President Biden just released, some of our Strategic Oil Reserve, to, attempt to address, the short – term, impacts, of increased demands, and the Supply and Demand, ramifications! Since, supposedly, the United States, is, now, the largest producer of oil, we can’t simply, blame OPEC, etc, but must realize, this is a multi – faceted, overall, inflation – related trend, etc!

4. Housing Costs (sales prices; repairs/ renovations; rents, etc): In most geographic areas, the price, to purchase, a house, has risen, dramatically, in the past year, or so! Some of this, is related to the Supply and Demand, ramifications, related to a continuing, Sellers Market, because of a lack of demanded, inventory. Some is, because, which low mortgage rates, buyers perceive they can afford, more, because of the impact on monthly payments. Part is related to inflation, but, whether, inflation, created rising home prices, or, that rise, contributes to, overall rates of inflation! Remember, also, because of the ramifications, on the thought processes, and perceptions, created because of the horrific pandemic, we are seeing much of this trend! Because, materials, and labor, has gotten more expensive, we are experiencing a far – higher cost of repairs, and renovations, etc.

5. Dining – out/ entertainment: Restaurants have felt the cost of inflation, as much, as any industry! Challenges, getting help, the increased costs of labor, and food, utilities, etc, have creates, significant price increases, in the cost of dining – out, etc! Entertainment costs have risen, because of a variety of impacts and ramifications of the pandemic, and inflation!

Inflation is, with – us, but, for how long? Many factors will determine, the longer – term ramifications, but, it is, certainly, wise, to proceed, wisely, and prepared/ ready!

Richard has owned businesses, been a COO, CEO, Director of Development, consultant, professionally run events, consulted to thousands of leaders, and conducted personal development seminars, for 4 decades. Rich has written three books and thousands of articles. His company, PLAN2LEAD, LLC has an informative website http://plan2lead.net and Plan2lead can also be followed on Facebook http://facebook.com/Plan2lead

Article Source: https://EzineArticles.com/expert/Richard_Brody/492539

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This article compares and contrasts the responsibilities of a CFO versus a Controller, Accountant or Bookkeeper. Many business owners do not understand the differences between the roles and the value a CFO can bring to the business. Additionally, many business owners do not feel they can afford a CFO, however that is where a part time CFO who participates with the business owner and management is critical. A part time CFO can spend as little as a day or two month with the business and add value to the bottom line.

A. CFO Responsibilities:

1. Cash Management

Cash management includes understanding your business’s “operating cycle” (i.e. cash to cash cycle). To improve your “operating cycle” it is imperative you understand what it means, how to calculate it, and what influences it before you can improve it. Cash expectations your cash balance to be in 6 months?” Most of the time companies are fighting cash flow problems today and can’t think about the future past this week. Forecasting and managing cash flow provide a real sense of control over the business. Implement a Cashboard-Dashboard, 13 week cash flow forecast and review cash flow reports at least monthly. The key for any business is to focus on cash, not just EBITDA and Net Income, as Cash is King!

2. General Financial Sophistication

• A sounding board for the owner in making key decisions, as the Trusted Advisor
• Fewer cash flow surprises using a Cashboard-Dashboard and 13 week cash flow forecast
• Better trained accounting staff
• Better documentation and controls
• Fewer surprises relating to tax payments and effective communication with the CPA for taxes
• Alternative, recommendations and solutions to company problems

3. Budgeting

The ongoing process of developing, implementing and reviewing the budget and its associated variances to actual results. The CFO helps correlate the operations and financial results of the business so the management team understand the financial impact of the decisions they make.

4. Compliance

The ongoing process of keeping in compliance with bank, investor covenants, tax versus management reporting working papers, insurance, corporate minutes.

5. Financial Oversight and Management

Analyze and review monthly P&Ls and Balance Sheet and Cash Flows with the board and management team. Look at the story behind the numbers, not just the numbers. Drive toward data-driven decision making. Monitor key business metrics using a dashboard which gives you the vital statistics in the areas needed to monitor working capital. For instance, each month a report is produced showing information such as aged receivables, receivable days, inventory levels by category, inventory turnover, and days in payables. These statistics should be looked at and compared month by month to determine if the problem is getting better or worse. Trending and associated analysis and decision making is a key CFO function. Action should be taken immediately when the numbers show a trend that will be bad for the company.

Oversee the activities, work and quality of the Controller/Accountant/Bookkeeper. Working capital and treasury management. Overseeing CPA relationship, business lawyer relationship.

Working capital planning and forecasting. A simple Cashboard-Dashboard report will focus management in the right areas, and help to move the business into stronger cash performance.

Review financial reports before sending to investors or any other external party.

6. Key Ratios

Track and analyze key financial ratios against industry standard benchmarks. Put plans in place to exceed certain industry ratios, or make decisions to not meet certain ones, to meet others, and to exceed others.

7. Profitability

Gross margin analysis by product line, products or customer is critical for small businesses. Migrate towards having the internal systems provide information to manage gross margins for product lines and products.

8. Processes and Systems

Design, implement and maintain accounting processes and procedures. Processes, whether documented or not, exist in all businesses. It is the way staff perform the work necessary to produce products or services. In most small businesses, the underlying processes to accomplish the work are rarely documented or reviewed as a whole (i.e. system). Developing efficient and effective systems and processes generally reduce costs and/or improve productivity. In businesses where there is a planned exit or merger or sale of the company, documented processes are critical so the buyer gets more value from the company, and the investor/buyer does not have to these things themselves.

This goes beyond just the financial area of the company to operations, sales, marketing, technology, HR and all areas of the company. The more these process areas are fully documented, the higher the value of the company.

9. Internal Controls

Structure, work and authority flows. Theft avoidance, cash tracking, accounting processes that limit access. Internal control procedures reduce process variation, leading to more predictable outcomes. Focus is on effectiveness and efficiency of operations, reliability of financial reporting, and compliance with laws and regulations.

10. Strategic Planning

As a company grows towards an exit/liquidation event, a strategic planning process is essential. This is not as much a document, but more an ongoing process to analyze and describe the strategic goals and tactical implementation. Parts of the strategic plan include: SWOT (Strengths, Weaknesses, Opportunities and Threats) analysis, ideal customer profile, competitive analysis, short and long term action plans. The CFO guides the business through the preparation for an exit strategy in order to maximize enterprise value.

11. Corporate Credit and Collection

Establish and improve corporate credit standing. Separate personal from business credit reporting so the company’s credit stands on its own following the seven steps to success in developing business credit.

12. Audits

Oversee external accounting and other audits as required.

13. Information Systems

Oversee the continued improvement of internal operations for information systems. Well documented IT systems, software and hardware asset tracking are key factors when a buyer completes IT M&A due diligence for to a company that wants to be sold.

14. Financing

Direct the business in the development of an effective capital structure by securing debt financing at attractive terms, managing the lender relationships and ensuring compliance to the debt terms.

B. Controller/Accountant/Bookkeeper Responsibilities:

1. Main Responsibilities

The main responsibilities of of the Controller/Accountant/Bookkeeper are to maintain and operate the books and records of the business. Prepare, control, balance and check various accounts using standard bookkeeping methods. Enter daily/weekly/monthly financial transactions in QuickBooks or other accounting software. Maintain general ledgers recording the status of various accounts and make sure that all the accounts balance. Prepare financial statements. Verify the accuracy of computerized accounting and record-keeping systems.

*Accounts Payable
*Accounts Receivable
*Bill Payment
*Payroll and Check Registers
*Bank Reconciliation
*Financial Statements
*Customized Reports
*Payroll Services
*Payroll Check Writing
*Payroll Tax Returns
*Monthly, Quarterly, and Annual Payroll Reports
*Federal, State and Local Tax Reports and Filings
*Accurate and Timely Data Entry
*Tracking Inventory
*Available for phone call questions
*Validate trial balances
*Invoice Matching
*Interface with vendors as needed

2. Standard Operating Procedures (SOP)

Under the guidance of the CFO, document the accounting and bookkeeping standard operating procedures manual. Help the CFO create the full accounting process documentation, review for improvements, and update the process to increase streamlined accounting/bookkeeping processes.

3. Compliance

Maintain best practices accounting and bookkeeping in compliance with General Accepted Accounting Principals (GAAP).

C. Conclusion:

There is a significant strategic and tactical difference between the value a CFO brings to the executive leadership of a business and Controller, Accountant or Bookkeeper. The key is for the CEO/business owner/entrepreneur to schedule an initial meeting with a CFO, access the business need, and determine an action plan to drive the business to the next level of sales and profit. As mentioned in the introduction, most small businesses cannot afford a full time CFO, so a part time or virtual CFO is the ideal arrangement. The key is find a CFO with experience that can be the Trusted Advisor to the CEO/business owner/entrepreneur and provide financial, operational and business insights.

Keith McAslan is a Partner with CxO To Go a national professional services company headquartered in Denver, Colorado that provides on-demand C-Level expertise and best practices to client companies on a part time, flexible, and affordable basis. Keith is sought after to provide advisory services as the Trusted Advisor to Owners and CEO’s. By utilizing his extensive experience as a successful financial and operational C-level executive, Keith brings a results driven leadership style to complex situations.

McAslan’s expertise includes: financial advisory; management consulting; part time, interim & virtual CFO, COO and CEO; debt and equity financing; turnaround management; acquisition and divestiture advisory. Most recently Keith, was instrumental in the successful sale of Western Forge to Ideal Industries. As the interim CFO with finance and private investment transaction experience, he guided the management team through the complex sale and due diligence process completing the sale from prospective buyer presentation to close within 60 days.

Article Source: https://EzineArticles.com/expert/Keith_McAslan/543340

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Creating clear and accurate financial forecasts for your company during the start-up stage is crucial.

Most business owners complain that building accurate financial projects is time-consuming, and that time could be used generating sales rather planning. However, few investors will invest in your company if don’t have clear projections.

Correct financial projections will help you create staffing and operational plans that will take your company to the next level.

Here are ways to help you build financial projections for your business.

Start with Expenses

Is your company in the start-up stage? If so, then it’s easier to predict expenses rather revenues. Therefore, start with estimates for the common expenses such as rent, utility bills, phone bills, legal fees, advertising, cost of goods sold, materials, and cost of customer service.

Double your estimates for marketing and advertising because they tend to escalate beyond expectations. Triple legal and insurance fees because these are difficult to predict.

Check the Key Ratios to Ensure Your Projections are Accurate

Don’t forget about expenses, especially after doing aggressive revenue predictions. Most entrepreneurs focus on reaching revenue goals and assume they can adjust expenses if revenue doesn’t materialize. Positive thinking could help you improve your sales, but it’s not enough to pay the bills.

By using key ratios, you can reconcile your revenue and expense forecast. Here are a few ratios that can guide to make an accurate forecast:

Gross Margin

This is the ratio of total direct costs to the total revenue for a certain period. Note assumptions that could increase your gross margin from 10 to 40%. For instance, if your customer service and sales expenses are low now, they could be high in the future.

Operating Profit Margin

Operating profit margin measures the profit a business makes on a dollar sale, after paying the variable cost of production – like wages and raw materials, and before paying interest or tax. Expect to see a positive movement from this ratio.

As your revenue grows, overhead cost should be a small proportion of total cost, so your operating profit margin should increase. Most entrepreneurs make a mistake by predicting the break-even point too early and they assume they won’t require financing to get to this point.

Total Headcount per Client

Are you a one-person entrepreneur who plans to grow your business on your own? Then, pay a lot of attention to this ratio.

Divide the number of employees in your firm (just one if you do everything on your own) by the total number of customers you have. Then, ask yourself if you’ll want to be managing all those accounts in five years when the company has grown. If not, then you need to reassess your assumptions about the payroll or revenue or both.

Article Source: https://EzineArticles.com/expert/Jon_Allo/1079948

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In our home we try to get the children to help out. One day our youngest son came into the living room and asked, “Does anyone want a cup of coffee?” “Yes, please!” we said. He replied, “What kind of coffee do you want? Capitated or decapitated?”

This old blog article about the commercial loan brokerage business is one of the best of my forty-year career. If you are making $500,000 per year, you don’t have to read it.

My best blog article EVER?

You’re reminded that I am largely retired now. If you need a commercial loan, please contact one of my two wonderful loan officers, Alicia Gandy (our Loan Goddess) and George IV (my wonderful son, who is old and very experienced in his own right):

Warm Regards,

C-LOAN, INC.

George Blackburne, III