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What is the financial benefit of becoming a publicly traded company

There are so many different things that you have to worry about when you are running your own company. There are so many different options that you can take when trying to make your company the best company it can be. One thing that might be beneficial to your company is make your company a publicly traded company. Here are some reasons that becoming a publicly traded company is a financial benefit.

The first financial benefit of becoming a publicly traded company is that is can give investors more confidence when looking into investing in your company. Plus when you have a public price it gives you a target price that will raise capital. Also becoming a publicly traded company also has the benefit of letting potential investors be able to call their brokers, or go on the internet and get a quote for your company's stock price.You are also allowed to give investors a discount from the public trading price if they buy the stock directly from your company. There is usually the stipulation that they have to hold the stock for one year. This is a great financial benefit because it will guarantee that people will be invested in your company at least a year which will help build up your company.

The second financial benefit to becoming a publicly traded company is that you can make your stocks more liquid than if you were to stay a private enterprise.Plus investors may be able to buy and sell their stock more voluntarily. You will want to keep a bigger percentage of your stuck to insure that you can barrow company's principals rather than have to put up your personal guarantees. Becoming a publicly traded company will also help you a exit strategy because your stocks are more liquid.

The third financial benefit of becoming a publicly traded company is that the value of your company on the market is substantially higher than it would be if it was private. Statistics have shown that 4 of 6 companies will have 25 times the higher net earnings if they are public rather than private.

The fourth financial benefit of becoming a publicly traded company is that your employees might be more loyal due to the fact that they can be part owners of the company because of the fact that they own shares of stock. This is a way that you can also connect with your employees by helping with the success of their future. If your employees are more loyal it will help increase productivity which in return will help your business.

The fifth financial benefit of becoming a publicly traded company is by gaining publicity. Usually when major companies become public they are recognized in the newspapers and different magazines. This is a great way for you to get free advertising. Advertising of a company usually will help your sales and revenue increase.

There are so many financial benefits of becoming a publicly traded company. There are so many different avenues that you can take to help your company financially. If you are weighing the pros and cons of becoming a publicly traded company there are a lot of pros as far as financial benefits go. Before making your company a publicly traded company makes sure to do some research and to talk with your financial advisor to see if becoming a publicly traded company is right for you. There are financial benefits to becoming a publicly traded company but they are not right for every company.

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