Going public -- that is, selling stock that allows the general public to purchase equity in your company -- is an enormous undertaking for any operation. The capital raised through a successful public offering can take your business to new heights, attracting talent and allowing for large acquisitions. A positive Initial Public Offering (IPO) can also work as effective marketing: a clear signal to the public that you're growing. And finally, an IPO can serve as a way for founders, employees and investors to get liquidity on their initial investment -- a reward for hard work or early funding.

While an IPO can be quite profitable when done under the right circumstances, the amount of time, work and risk means that the decision shouldn't be taken lightly. There are several steps to follow in order to successfully take your company public:

1. Consider the Costs

Before diving into the steps necessary for an IPO, you must carefully consider whether this is the right choice for your company. Firstly, the process can be expensive, requiring costly auditing feeds, underwriter fees, legal fees, etc. Secondly, the process is not quick: 4 to 8 months is average from initiation to actual IPO.

And once your company is public, you'll be required to produce far more financial reporting than when you were private. You'll also now be accountable to shareholders, which can bog down decision-making and inhibit the speed of your business. Any sort of pivot, for example, will be more difficult after you've gone public.

If, after all that, you and your financial advisors still think it makes sense to take the company public, it's time to get started preparing for an IPO.

2. Hire an Underwriter

An investment bank should serve as your underwriter, whose role is to be the link between your company and the public looking to invest in it. Sometimes a bank will purchase your shares and then resell them to the public. In other agreements, a bank will bring in secondary banks (called "syndicates") to distribute the risk involved in the process. Take a long look at any potential investment banker you're considering for the job, paying special attention to their track record of taking other companies public in the last 3 to 5 years. If you know anyone who has successfully taken his or her company public, consider asking for a referral.

3. File with the SEC

You will not be able to sell anything until your company has been declared "effective" by the U.S. Securities and Exchange Commission (SEC). To receive such a status, you'll have to submit 1) a registration form and 2) a prospectus, which lays out various aspects of your business to investors, including operations, finances, your board and their annual pay, any and all pending legal issues and how the company plans to distribute stock.

It's quite common that your application to the SEC will be rejected the first time around (usually, it takes two tries). If so, they'll send a letter -- generally within 30 days of your submission -- detailing what's inaccurate or incomplete, and you'll be asked to respond in writing with further amendments and explanations.

4. Begin Your Road Show

Once you get the green light from the SEC, it's time to begin your "road show," in which reps from your company travel the country to generate interest and excitement about your IPO. Road shows can involve everything from formal presentations, to board rooms, to more casual pitches over breakfast. The goal, though, should be to get big-ticket investors to agree to buy stock as soon as the IPO is final, which will help drive your stock price up.

You'll need to distribute a prospectus laying out the anticipated size and price range of the offering and prepare an explanation for why this is a one-time opportunity.

5. Pick an Exchange

Most desirable exchanges have minimum requirements for market listing, so this may be an easy decision. The New York Stock Exchange (NYSE) requires that your company have at least $10 million in pre-tax earnings over the last three years, while NASDAQ requires pre-tax earnings of over $11 million in the prior three fiscal years and over $2.2 million in each of the two most recent fiscal years.

Both exchanges also have alternative markets with a lower barrier to entry. The NYSE's American Stock Exchange (AMEX) requires pre-tax income of $750,000 in the last fiscal year, and the NASDAQ Capital Market requires that same amount in two of the last three fiscal years.

6. Price the IPO

This is generally done on the last day of the road show after the close of the markets, and it should be locked in the night before the stock will begin trading on an exchange. The price, which should be set by a pricing committee made up of your senior executives and your underwriters, may generally land between $14 and $16 per share, but depending on your business size, pricing may be significantly more or less. Keep in mind when setting the price that you want to maximize profit, but also don't want your early stock to trade down, which can generate bad publicity for your company.

7. Sell the Shares!

On the morning of the IPO, your investment bankers will simultaneously purchase the shares and sell them to investors, taking a commission generally around 7%. From the moment the first share is sold, you will become a publically traded company, and your business will have entered a new phase in its corporate history.