The Ernst & Young LLP Guide To The IPO Value Journey

By Stephen C. Blowers, Peter H. Griffith, Thomas L. Milan John Wiley & Sons. £22

The initial public offering (IPO) is the big kahuna of business. Its glamour and excitement quotient has risen in tandem with the inexorable march of the dot.com enterprises and has become as synonymous with the last 10 years as the hostile takeover was with the 1980s.

For companies going public it is like the first round of the championship, fraught with danger and tension and the enthusiastic welcome of the public if things go well. If they don't, its back to the drawing board and the search for a halfback line equal to the task.

However, as this guide emphatically declares, the IPO is not the be-all and end-all. It is the first step on a long journey (the guide includes a hand map) and should not be confused with the end goal, delivering value to the customer.

The late nights, the buzz, the half-eaten pizzas are all part of the game and add to the camaraderie which is essential to IPOs, but the trick is to maintain the commitment to quality when the buzz has worn off and the long haul beckons.

To aid the uninitiated, Ernst & Young has broken down what an IPO entails into an easily digestible (for this area, at least) game plan and kicks off with an overview garnered from the experiences of chief executive officers involved in IPOs.

The advice outlined in this section forms the spine of the book and is broken down into discrete strategies. The first and foremost is that planning is essential and the most successful companies have begun transforming themselves into public companies way before the IPO date.

To this end the company and the CEO have to define success; chart a business strategy; maximise the company's performance; build a winning team; and maintain momentum.

The guide also, on a personal level, advises CEOs to take care of their own personal wealth and estate planning. According to the authors' research, 75 per cent of respondents to the survey failed to institute a personal financial plan before the IPO.

Another salient nugget of advice in the book is that just because everybody else is doing it doesn't mean you have to. Evaluating whether an IPO is right for your company in its current state is paramount. And if the time is right, preparation must also be right, a point that is hammered home throughout.

This preparation does not stop at internal structures, but includes how the company relates to the wider world. To this end the right stock market for the IPO must be picked; the road show must have a clearly-defined timetable; and the agenda must not have any room for misinterpretation. In other words every member of the team must be singing from the same hymn sheet and be listened to by an audience who can read the music.

The guide is exhaustively researched and this is reflected in the writing. It is stuffed full of practical information and advice, and the liberal use of tables and graphics, allied with extensive appendices, alone makes it worth the price.