Financing Strategy Essay

thither are m each options for involution for a privately held fraternity. The Huffman trucking governmental party has options to dramatize the operations of the business. The three best options that the firm faces are sledding public through an IPO, acquiring other organization in the aforementioned(prenominal) industry, or encounter with other organization. With each of these being a possibility, in that location are some aspects that must be taken into comity. First in that respect are strengths of the option, as well as shakynesses. Each option besides comes with its suffer opportunities as well as threats, which must non be over behaviored. While there are pros and cons to any decision that ordain be made as far as going frontwards is concerned, expanding operations is imperative to staying competitive in the business world this twenty-four hour period in age. Weighing each option provide allow The Huffman transport Companys decision makers to come to t he best conclusion when travel forward.Going Public through an IPOAn initial public fling (IPO) is a process in which a private company issues shares of caudex to the public for the first time. Often times this process is known as going public. Regardless of how people refer to it though, it is extremely classical for Huffman Trucking to consider this option for further expansion (Encyclopedia Of communication channel, 2013). The strength in this feeler is that it could generate revenues that do not start to be paid back. The initial purchasers of the stock are buying a portion of the company in hopes that the value will annex. Huffman Trucking fucking then use those funds to purchase upstart equipment, hire more(prenominal) employees, and more importantly to expand their service area in the unify States.However, there are weaknesses in this decision. The current ownership and way would stomach a great deal of decision making power for the company. In an instant, the s tallion oversight team would wear a group of stockholders to reply to. The knowledge savvy that got Huffman Trucking to where it is would become secondary to the whims of the stock holders.The opportunities of this approach are many, save primarily, it would put Huffman Trucking on the map. Increasing the credence rating and reputation ofthe company give the bounce go a long right smart to increasing revenues. Also, going public would create a financing humor for the company that would provide even more luck to gain coronation monies (when needed) for further ontogenesis.The major threat of this decision is that current ownership and management would be thrown emerge. If the stockholders felt that they k unsanded better for the company, steps could be taken to get rid of anyone deemed detrimental to the company. This could mean that in a place permit of years the original owner and every member of the original management team could be removed from the company.acquiring another Organization in the Same IndustryAnother option for Huffman Trucking is to acquire another organization at bottom the trucking industry. Huffman trucking fag already credit some of its growth in the past to acquiring other businesses, though each case is different and its important to consider the strengths, weaknesses, opportunities, and threats associated with another acquisition.Acquiring another business can athletic supporter Huffman Trucking to increase their efficiency and business. This is a known strength for acquiring another business, because they already put one over a location that they cover as well as a node base, and their name is known, associating Huffman Trucking with that name will help their nodes feel comfortable spreeing their business to Huffman. Depending on how Huffman is already staffed, a weakness of acquiring another business could be bringing on to many employees, or even having to let some of that companys current employees go. If Huffm an brings on those employees they have to make sure they have copious business to pay for all of their labor, and if they have to terminate those employees it can empower the company a disallow public image for cutting jobs. on that point are countless opportunities when acquiring another company in the like industry. It all depends on how the specific company handles the acquisition. One major opportunity is unlimited growth, if the acquisition goes well for both companies than Huffman will probably have the chance to acquire other businesses within the same industry and comprehend to grow. A threat would be that there is really no undertake how the other company will handle the acquisition. There could be negative publicity or issues with current employees if Huffman doesnt handle the situation suitably from the beginning.Merging OrganizationsMany times, a company like Huffman Trucking potentially can build strength by merging with other organizations. vigilant considerat ion and planning needs to take place before precisely diving into any venture however, if the company were to mesh itself with a company that is already holding itself upright, Huffman Trucking potentially could have more to offer its customers. In combination with the diverse services Huffman already provides, it can expand on these services. Especially, if Huffman aligns itself with another well-known company, consumers could still get their needs met by the former company while also being introduced to the products and services offered by Huffman.In relation, if Huffman shares nearby territories with other companies that offer similar services, it whitethorn be a wise move to mix in the companies into one entity. It is smart to merge with, sure-fire companies if the services complement each other. The acquiring company would have access to a new commercialize and an already established customer base (NFIB, 2013, P. 1). In this instance Huffman would serve as the main furnis h the head honchos taking over. Combining similar companies together potentially can ignite more power as a union, reinforcing the strength in numbers concept. Merging is a way to encourage growth it can be looked upon as a way to open up new channels and new markets (NFIB, 2013, P.1).Occasionally companies experience down times, mostly because of market trends. On their own, they simply would lose steam and eventually fade into mo last(a)ary despair, unless another company chooses to offer a life raft. In these instances, a large company whitethorn swoop in and buy out the struggling company. The endeavor can prove to be fruitful if the big company is successful at not only turning nearly profits for the struggling company but also building onto its own. Acquiring additional assets also helps to make a large company look better to investors.Huffman Trucking initially may desire to keep everything the same. It may even promise that employees will not lose their jobs. The reality, however for any successful coalition, is that change is inevitable and some employees will be let go. If Huffman attempts to retain too many employees it sets itself up for failure as the synergy processes can become strained. Within a given organization, only so many associates are needed to take away the necessary departments. The action of merging with other companies automatically reveals the existence of several different departments of employees doing the same sign of work.Huffman will have to determine how many workers are needed to fill these positions and then layoff, or relocate the rest. Larger companies merging with other large, successful companies may merge more smoothly with minimal layoffs, and much(prenominal) a condition would be ideal. The merging endeavor could unfortunately cause a temporary downward trend in stock prices. Huffman may be tempted to get cocky with prices because it is now owner of many smaller entities. It may would reason that since it offe rs products widely sought by consumers that pricing rests solely within their whim. Consumers, however, may rebel when confronted by increased costs as they set about cheaper product alternatives within the marketplace (Rimm & Media, Wint).The opportunities are numerous when a merger is successful. Two well-financed, profitable companies potentially can exponentially increase their net worth by joining forces. Keeping lines of communication open among the entire company promotes enthusiasm from workers old and new. Acquiring companies can benefit from the broader customer base in conjunction it can often decrease expenses as they produce more of their own brand.Although the reality exists that some employees will be let go, there also lays potential risks. Customer service may suffer as employees feel less motivated to go out of their way to help clients and shoppers (Rimm & Media, Wint). A gradually weakening workforce render by employee stress and weakened morale will eventually usurp the face of the entire company. Many merger efforts actually discourage employees from want employment elsewhere, as they want the merger process to unfold smoothly.This is no way guarantees job security for workers long-term. Consequently, some employees will be illiberal toward the unknown. They feel unmotivated. Turnover is sure to spread among departments. As departments begin to weaken, stay workers may start to feel the squeeze of added work load. During the merger, the company is flimsy to hire replacement workers right away. The overall spirit within the company may slowly deteriorate as result.Another potential threat is an already weak company deciding to merge with another weak company, assuming that combining the two will induce success. Two bust companies will seldom find success together. More than likely, they simply will fail as one unit.Huffman Trucking should consider several factors when choosing to act an international location. Financial decisions fo r Huffman Trucking will be affected by the decision to branch out into international markets. The usual factors that Huffman Trucking takes into consideration in the planning efforts of supply and demand will include new risks. These risks will include unanticipated commodity price shocks, volatile tack rates, and unexpected supply disruptions as a result of forces beyond our controls, such as physical disasters and terrorist attacks (Neuman, 2005).The company should consider interest rates as this will affect the exchanges from one up-to-dateness to another. Employment levels and economic growth expectations will also potentially affect exchange rates. Rising unemployment in another country could bring the value of that countrys currency down, thus creating a less favorable exchange rate. The same is true for general economic conditions. If a countrys economy is not growing interest rates are likely rising and potentially affect exchange rates as well.Another factor Huffman Truc king should consider when choosing a location for potential international expansion is the make out balance of the other country as well as its political and regulatory body structure. A country wants to maintain a positive distribute balance to keep a favorable demand for its currency. The political structure within a foreign country needs to be hygienic to help protect the investments of Huffman Trucking. The foreign country should possess clearly delimit regulations. Strong regulations will also help protect the companys investments. These critical factors will aid Huffman Trucking is determining where international expansion aligns with their operations.Each of the choices before Huffman Trucking are valid and each has its own strengths and weaknesses. It is important to note that expansion is an important part of successful business, but not necessarily a requirement. Huffman Trucking must decide if negative side effects of any of these choices is worth the gain.