If your company has grown to the point that you’re ready to take it public and have a personal IPO, you’ll suddenly find you have more people to answer to—your stockholders.
With an IPO, you have to report every quarter and investors expect to see results.
Fortunately, there are some simple things you can do that will allow you to not only meet but also exceed stock expectations for your mobile company/startup.
1. Supply and demand
Sometimes the value of your stock is as simple as the perceived value of the product. The theory of supply and demand also applies to stocks. If the same number of stocks are in play, but the demand for those stocks goes up, then the value will rise.
Some things that can make the stock more desirable is getting some press on the IPO. Go ahead and do a few interviews about your company and future plans, send out press releases, agree to articles and provide links to your company.
2. Buy back shares
Another idea is to make the value of the stock go up and thus make it more desirable. One way to achieve this is for the company to buy back its own stock shares on the open market.
This will decrease the available number of shares and thus increase the business value per share. The business can also purchase shares in another company to increase the overall value of stocks.
3. Restructure your company
Since it is a smart use of your time to evaluate your company’s structure from time to time anyway, take the time to look at all the assets of your company.
What are the different areas you’re involved in? What is profitable and what isn’t? Can you consolidate or sell off things that aren’t working? By strengthening your company, you can strengthen your share prices.
4. Fix customer concentration issues
Do you have a big client or two with unpaid accounts? If you have a customer account that is more than 15 percent receivable, you might be downgraded by banks. This can negatively impact your stock’s value.
Instead, create multiple-term contracts and stagger the expiration dates so highly concentrated accounts are broken into smaller pieces of the company’s overall picture of financial health.
5. Save on supply costs
Take the time to analyze your suppliers and the costs in procuring products or operating supplies. Can you rework any of your contracts with vendors? Perhaps you could find a new vendor who will offer a better deal or terms.
Anytime you can save money, you increase your company’s cash flow and ability to grow.
6. Grow competitive with mergers and acquisitions
When growing, look to companies that have strong possibilities at a cut-rate value. A major acquisition can destroy a company’s value or make it more competitive. In order to create valuable mergers and acquisitions, management has to have a clear idea of what it will take to make the new company succeed and when a return can be expected. You also must communicate this clearly to your shareholders and the public.
7. Reduce debt
One of the simplest things you can do to increase company value is to reduce debt. Although the actual amount depends upon the terms of a loan, you will have to pay interest on debt your company holds.
When the company is doing well, work to pay off debt and increase overall assets. This can be achieved by cutting everyday operating costs and budgeting wisely.
Keep in mind that the stock market tends to hold a long-term view, even if investors are sometimes antsier and hold a shorter-term view, wanting immediate results.
Continue to look toward the future growth of your company, and you should exceed stock expectations over time.
That makes for happy shareholders who remain loyal to your company.
DISCLAIMER: This article expresses my own ideas and opinions. Any information I have shared are from sources that I believe to be reliable and accurate. I did not receive any financial compensation in writing this post, nor do I own any shares in any company I’ve mentioned. I encourage any reader to do their own diligent research first before making any investment decisions.
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