1. Strategic Assessment

• Goals and Readiness: Assess if the IPO aligns with the company’s long-term strategic goals, such as growth capital, expansion, brand building, or exit for early investors.
• Market Timing: Evaluate the current market conditions, industry trends, and investor sentiment. For SMEs, timing can be critical, as smaller firms may face challenges during market downturns.
• Internal Review: Conduct a SWOT analysis (Strengths, Weaknesses, Opportunities, Threats) to identify key areas needing attention before going public.

2. Financial and Operational Review

• Financial Health: Review and audit financial statements to ensure accuracy and transparency. Consider a multi-year audit if it hasn’t been done already, as investors expect consistency and reliability in financial reporting.
• Key Metrics: Develop and track metrics like revenue growth, profitability, operating cash flow, and capital expenditure. Investors focus heavily on these metrics to gauge business viability.
• Internal Processes: Standardize internal processes for accounting, procurement, and inventory to ensure efficient operations and regulatory compliance.

3. Corporate Governance and Compliance

• Board of Directors: Establish a qualified and independent board of directors. This board will be key for oversight and strategic direction, reassuring potential investors of strong corporate governance.
• Policies and Procedures: Develop policies for corporate governance, internal controls, risk management, and ethical practices. The company must meet IPO listing requirements specific to the target exchange.
• Legal Structure and IP Protection: Ensure that the business’s legal structure, intellectual property, and contracts are solidified to mitigate risks. This might also include reorganizing to create a parent holding company, if beneficial.

4. Financial Forecasting and Valuation

• Projections and Business Plan: Prepare a comprehensive business plan with financial projections that include expected revenue, expenses, cash flow, and growth rates for the next three to five years.
• Valuation Analysis: Work with financial advisors to conduct a preliminary valuation. This will help determine the appropriate offering price range and the number of shares to issue.
• Use of Proceeds: Clearly define how the funds raised from the IPO will be used, as investors prefer transparency regarding capital allocation.

5. Team and Advisory Assembly

• Underwriters: Identify and engage investment banks or underwriters that specialize in SME IPOs. They assist in structuring the deal, pricing, and marketing the IPO to institutional and retail investors.
• Legal and Accounting Advisors: Engage law firms and accountants with IPO experience. Their expertise will be invaluable for regulatory filings and audits.
• Investor Relations: Build an investor relations function to maintain consistent and transparent communication with investors pre- and post-IPO.

6. Regulatory Filings

• Draft Prospectus: Work on the prospectus with legal and financial advisors. The prospectus is a detailed document that outlines the business model, financials, risks, and use of IPO proceeds.
• File with Regulators: Submit required documentation to the securities regulatory body (such as the SEC in the U.S.) and respond to any comments or requests for additional information.
• Listing Application: Complete the application for listing on the chosen exchange, ensuring that all requirements are met.

7. Final Preparations and Pricing

• Pricing Decision: Work with underwriters to determine the final IPO price based on demand gauged during the roadshow.
• Transition to Public Company: Prepare for the transition, including changes in reporting, disclosure practices, and governance requirements.
• IPO Day Preparation: Coordinate with the exchange on the day of listing to manage logistics and create a successful launch experience.