For a scaling business, preparing for an IPO can quickly become a transaction checklist: appoint advisors, complete due diligence, produce the required financial information and prepare the investment case.
All of that matters. But genuine IPO readiness goes further, asking questions such as:
- Could the company operate effectively as a listed business tomorrow?
- Can it produce accurate financial information quickly, explain performance clearly and withstand external scrutiny?
- Can it do so without distracting management from customers, operations and growth?
Transaction readiness may get a company through an IPO, but public company readiness gives it a better chance of succeeding afterwards.
Our roadmap gives CFOs a practical way to sequence the work and assess where their business stands. It’s important to note that the timings are indicative rather than fixed; no two businesses will follow exactly the same timetable, the workstreams will overlap, and some businesses will need to begin particular areas earlier depending on their financial history, maturity, structure and chosen market.
1. Eighteen months or more before IPO
Decide what public markets are for
An IPO should support the company’s strategy; it should not become the strategy itself. The board must be clear about why public markets are the right route and what a listing will enable the company to do. It might provide capital for organic growth or acquisitions, raise the company’s profile, create liquidity for shareholders or establish access to future funding.
These objectives should shape the amount of capital sought, the proposed use of funds and the milestones presented to investors. They should also be tested against other funding and exit options with a Deal Advisory team.
Once the decision to pursue an IPO has been made, the next question is which market best suits the business. The Main Market, AIM and Aquis offer different routes to public capital, with different requirements, investor audiences and expectations of a company’s scale and maturity. Choosing the right market early will shape the company’s preparations, timetable and advisor team.
Public markets are a means to growth, not an end in themselves. Success will ultimately be measured by what the company achieves with its listed status, not simply whether it reaches admission day.
Assess how ready the business really is
A readiness assessment should examine finance, tax, governance, systems, controls, people and reporting. It needs to identify what could prevent an IPO from completing, and what might make listed life difficult afterwards.
Few scaling businesses will emerge without gaps. That is to be expected. The purpose is to discover them while management still has choices about how and when to address them.
Some changes take longer than anticipated. Recruiting an experienced financial controller or non-executive director, upgrading a finance system, establishing an audited track record or resolving a historical tax issue cannot always be compressed into a transaction timetable.
This is also the time for founders to consider the personal implications of an IPO. Shareholdings, incentive arrangements, future liquidity and personal tax planning may all need attention. The company’s advisors and the founders’ Private Client Tax advisors should work together where their interests intersect; early input from advisors with experience across Equity Capital Markets can help management prioritise what needs to change first.
2. Twelve to eighteen months before IPO
Get the historical numbers settled
Depending on the market and applicable requirements, the admission document may need to contain several years of historical financial information. Earlier periods might require audit, restatement or conversion to a different accounting framework.
Acquisitions can complicate matters. An acquired business may have been unaudited, applied different accounting policies or maintained records that were adequate for a smaller private company but not for an IPO.
Significant accounting judgements should be addressed early. Revenue recognition, capitalised development expenditure, share-based payments, financial instruments and exceptional items are common areas of focus. An adjustment that changes reported profit, EBITDA or another important performance measure could affect the financial model, investment case and valuation. Those discussions are much easier before the wider IPO materials have been built around the numbers.
Engaging an auditor with listed-market experience early helps the business identify where additional work may be required.
Build a finance function for listed-company pace
A team that works well for a private scaling business will not necessarily be ready for public-market deadlines.
The CFO should assess how quickly the company can close its books, produce dependable management information and explain performance against budget and forecast. Reporting should be consistent across the group, with key judgements documented and reconciliations completed and reviewed.
Areas of over-reliance also matter. If reporting depends on one or two individuals – or a patchwork of spreadsheets – the process may not be sufficiently resilient.
The answer could involve recruiting additional people, clarifying responsibilities, improving consolidation systems or securing external technical accounting support. The future advisor network should be considered too. Independence requirements can restrict the services a listed company’s auditor may provide, so work previously undertaken by the audit firm may need to move in-house or to another advisor.
Find tax issues before due diligence does
Corporation tax, VAT, employment taxes, R&D claims, transfer pricing, share incentives and cross-border arrangements may all come under scrutiny.
The CFO should establish whether filings are complete, tax treatments are supportable and the necessary evidence is available. Where an issue requires correction or engagement with HMRC, the timing may not be within the company’s control. An early business tax review creates time to understand and address any exposure.
3. Six to twelve months before IPO
Build forecasts that can survive listed life
A financial model should do more than support the transaction. It should reflect how management runs the business.
Strong models connect operational drivers to revenue, margins and cash. They show how investment will create capacity, how that capacity will generate growth and how reported earnings will convert into money in the bank.
Assumptions need to be observable, defensible and capable of being monitored. Management should understand the effect of delayed contracts, slower customer acquisition, rising costs or weaker cash conversion.
Investors expect ambition, but overly aggressive forecasts can create expectations that become difficult to manage. A dramatic hockey-stick projection may attract attention initially. Missing it can damage credibility for much longer.
A measured forecast, supported by evidence and consistently delivered, often makes the more compelling investment case. Deal Advisory specialists can help management test its model and working-capital assumptions.
Embed controls and strengthen governance
As part of the reporting accountant workstream, management will need to demonstrate that the company has appropriate financial position and prospects procedures. This involves mapping its reporting processes, responsibilities, oversight and controls. The value lies in how those procedures operate, not simply in the document describing them.
Budgeting, forecasting, treasury, consolidation, tax and the handling of market-sensitive information should have clear owners, review points and escalation routes. Controls must also be evidenced. It is not enough for a policy to state that a reconciliation is reviewed if the company cannot demonstrate that the review took place. An independent assessment by a Risk Assurance and Advisory team can identify gaps before they are tested in the formal IPO process.
The board may also need greater independence, new committees and directors with listed-company experience. Recruitment should start early enough to find people who will improve decisions, challenge assumptions and support management, not merely satisfy a requirement.
4. Three to six months before the formal process
Rehearse being listed
One of the best readiness tests is to run the company as though it were already public:
- Produce results to the anticipated timetable.
- Hold the proposed board and committee meetings.
- Test how potentially market-sensitive information would be identified and escalated.
- Ask whether the board receives what it needs to challenge performance and make timely decisions.
The finance team could also rehearse producing a trading update:
- Can information be gathered quickly and reviewed properly?
- Are complex judgements resolved in time?
- Is appropriate technical support available?
These dry runs expose bottlenecks and data-quality problems while there is still time to fix them.
Prepare for scrutiny
Management should start assembling and reviewing the information likely to be needed for due diligence. Material contracts, board papers, tax records, forecasts, commercial KPIs, customer concentration and regulatory matters should all be readily available.
Watch for inconsistencies. If a KPI is defined differently in board reports, investor materials and the financial model, confidence can quickly erode. The investment story, financial information and operational evidence must describe the same business. Early financial and tax due diligence support can identify issues before they become transaction-critical.
Any planned acquisitions also require care. A strategically attractive deal completed shortly before an IPO may bring additional audits, financial information and integration work. Its impact on the IPO should be considered from the heads-of-terms stage.
5. During the IPO
Move at the right pace
Once the process begins, momentum matters, but speed should not come at the expense of readiness.
An unrealistic timetable can push unresolved accounting, tax or governance issues into the most pressured stage of the transaction. The right pace is one that keeps the process moving while allowing the business to deliver the performance underpinning its investment case.
Sometimes that means completing more work before formally launching. It may even mean accepting that an attractive market window is not the right one for the company.
Changing a timetable can feel uncomfortable, but allowing a rushed transaction to damage the underlying business is worse.
Do not let the transaction become the business
For the CEO and CFO, an IPO can become a second full-time job. At the same time, customers still need serving, employees need leading and growth targets must be achieved.
A deterioration in trading during the process can affect the investment story, valuation and timetable. Management should therefore agree in advance how business-as-usual responsibilities will be protected.
Strengthening the team below the executives can help, as can appointing an internal project manager and coordinating information requests. Management should also use the experience of its board and capital markets advisors rather than trying to retain personal control of every workstream. If the business cannot keep moving when the CFO’s attention is divided, that is an important issue to resolve before listing.
6. Admission and the first year
Prepare for what follows the bell
Admission changes the rhythm of the business immediately. Reporting deadlines tighten, governance expectations increase and material developments may require rapid assessment and disclosure.
Credibility is built through consistency: reliable numbers, realistic guidance, clear explanations and timely communication. Investors can often accommodate difficult news, but what damages trust is being surprised by information management should have understood earlier.
Yet listed-company obligations cannot be allowed to consume the organisation. Announcements, investor relations and governance matter enormously, but they cannot compensate for a business that loses sight of customers, operations and growth. The IPO is the end of a demanding transaction. It is also the beginning of a much longer relationship with the market. Prepare for that business, and the company will be better placed not only to complete its IPO, but to make a success of everything that follows.
How HaysMac can help
Our Equity Capital Markets team supports scaling businesses from their earliest readiness work through to admission and life as a listed company. If you are considering the Main Market, AIM or Aquis, speak to our team about building the financial, reporting and governance foundations your future business will need.
