Get bigger, go public: SMEs launching on the stock exchange

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In this edition of Business Planet we’re in the Spanish city of Seville. Getting financial backing for new projects is not always an easy task for most of Europe’s 20 million SMEs, particularly for those seeking substantial capital investment. However, there is a potentially effective solution – list your company on the stock market.

Carbures Europe is a Spanish success story. In recent months this company specialising in carbon fibres and composite materials has become a world leader in its field in engineering, manufacturing and production systems. .

It has just won a prize for ‘most internationally-minded newcomer’ in a competition for small and medium businesses run by the European Commission, leading European stock exchanges and public companies group, EuropeanIsseurs.

Since its stock market debut in March last year, the firm has raised 22 million euros and has grown spectacularly.

Rafael Contreras CEO of Carbures Europe said: “Before launching on the market there were 53 of us. Today we’ve a staff of 583. Our turnover was 10 million euros, now it’s 70 million.

Going public enabled this enterprise to access funds which it needed to develop extensively a double strategy of internationalisation and diversification.

The impact has been dramatic,says Contreras: We have 9 plants around the world; east and west coast in the US, in China and in Europe. Being on the stock market also expanded our technology into different sectors; automotive, aviation, railways and civil engineering.”

So, the stock market is potentially a great opportunity for development. But it is important to be aware of the benefits and other considerations.

These include handing over some control to shareholders, but there are other financial and human implications involved in going public. A SME must regularly disclose information about its operational activities, financial situation and business strategy.

Juan Juárez, the company’s chief financial officer says: “The advantages are ongoing access to capital, better exploitation of the company’s potential, more liquidity, a higher profile, and more credibility.”

If you need major capital investment to develop, and you believe this idea works for your business model, just be aware it requires a lot of preparation. So get expert advice before taking the first step.

The keys to success? According to Rafael Contreras they are: “good organisation, perseverance and self confidence.”

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