By Suresh Meshramani
Many believe the entrepreneur’s journey ends once a company has gone public through initial public offering or IPO. However, the reality is far from truth, because IPO is not the destination but the beginning of a transformative journey. Which marks a new era of governance, transparency and accountability, where the company has to be answerable to the public.
This transition from a privately held company to public entails achieving results to create goodwill and wealth. It is when the company’s vision expands and it ventures into becoming a global entity; acquiring new companies to create a flourishing business landscape.
Which brings fourth numerous challenges and opportunities, which can be combatted through strategic planning and commitment that can help create long term value creation.
So here are the next few steps, a company must consider for long term wealth management after launching its IPO.
- Expansion-
Post- IPO, a company is at its zenith and is garnering fame through media coverages and press release. Which is the best time to bring companies under your umbrella and expand its roots. To dominate the market, aim for big mergers, acquire companies and pivot your way to creating long-term wealth.
- Diversification-
When a business thrives and it goes public; you understand it would take time to build another megacorp. To have adequate funds to finance more such ventures, one needs to invest and diversify their investment portfolio across various assets such as stocks, bond and real estate. Which can help to mitigate risks and resolve financial problems that can occur later.
- Creating leaders-
Focus on creating leaders rather than on availing cheap services for the short term. Invest in training, provide feedbacks, offer R&D opportunities to employees, so they can sign their work with excellance. Give opportunities to your core team to lead the project. So, they can gain hands on experience and emerge as the next big leaders.
- Risk Management-
Launching an IPO is like hitting home run but before celebrating, you must consider developing a comprehensive risk management plan with the help of experts. With the esteemed guidance of the financial advisors and wealth managers, you can develop a risk management plan that considers your financial goals, risk profile, time horizon and liquidity requirements.
- Tax planning-
It is utmost important to come up with a tax strategy, that enables you to manage capital gains tax, maximize tax deferred accounts and utilise tax saving investment plans. It was because of poor tax plan, that when Twitter went viral in 2013, and launched its share at 26 dollars each. They lost around 479 million dollars in taxes. Therefore, having an efficient wealth management plan can be a boon. As it will safeguard your wealth by minimising taxes.
- Consider Philanthropy–
Practicing gratitude can draw in positivity, directing your attention towards possibilities. Launching an IPO is rewarding and this is when one should consider charitable work. Establishing charitable trust or NGO will not only foster a change in the society, but it can also provide tax benefits.
Through charitable work, you can build a legacy for the next generation to carry on. Ambani’s have been doing this for years, and they have benefited from it.
- Lifestyle management-
Many tread towards a superfluous and extravagant lifestyle, where buying luxury with their new found wealth gives them an adrenaline rush. It is when, one should take responsible action in
safeguarding their wealth in the long run.
Therefore, it’s essential to come up with a budget and segregate your personal and professional expenditures. Keeping a tab on your budget, can encourage long term financial security.
(The author is Suresh Meshramani, Visionary Leader and Inspirational Mentor, and the views expressed in this article are his own)
