How to use the stock market to grow your business
The stock market is a major node in Britain’s financial system. With a total market value of over £4tn earlier this year, there are lots of companies both on it and, more widely, involved in it – and there’s an opportunity for your firm to get involved and grow your business. Whether you choose to grow your firm through floating and offering shares to buyers on the open market or you simply choose to invest excess company cash in it in order to develop healthier reserves, there are lots of options.
Floating your firm
When a company interacts with the stock market, it’s often because they’re launching an IPO – or an initial public offering. This means that shares in the firm are put up for sale to the wider public as a way to raise cash. When Facebook floated in May 2012, for example, it was initially valued at over $100bn – and smaller firms can still make a substantial income from this option.
If this is a route that you want to take your firm down, then it’s wise to acquire some expert advice before going ahead. This is because there are a whole host of legal and financial complexities involved: it’s wise to thrash out in advance who in the company will benefit financially from the sale of shares, and what everyone’s ownership status will look like once the move is completed.
Investing in other firms
However, not all companies are in a position to offer shares in themselves on the stock market – and it’s not always the wisest move, either. For firms that fall into this category, though, there are still stock market investment options available. If your firm has large reserves of excess company cash, then it could be grown by investing it in the stock market. The main thing you need to consider is to avoid jumping into a market without a previously planned strategy. Be sure you take your time to learn from the experts, like Whitney Tilson Taas or any other of your preference that stands out in the market you’re planning to speculate or invest in. Such practices will keep you on top and will bring the best results for you and your company.
Perhaps your firm would like to invest directly in the stocks of another firm – maybe one in a similar space but not a competitor. Or maybe the aim is simply to make cash, in which case a stock market tracker fund may be more prudent. It’s important to check with an advisor before doing this, though, as your firm’s cash may well be better kept for future investment purposes within the company. If you do decide to go ahead, then investing in a good stock events calendar is a wise move as it can help you to time the entry just right and hopefully avoid any market-moving incidents.
The stock market, then, is clearly full of potential for a firm. Whether you want to give your firm the chance to earn some cash by selling shares to the public or you would prefer to grow company cash reserves by investing in other firms, there are a lot of options. With a good advisor and the myriad resources available through the internet on hand, you’ll be able to complete the process without too much trouble no matter what you choose to do.