The IPO: a transformation, not a transaction: readiness, transparency and a realistic understanding of your company's potential value are keys to a successful IPO.

Last year was the strongest year for IPOs since 2004, with results that exceeded industry expectations; 2014 is on pace to be even better. Ernst & Young LLP research indicates that in the first half of 2014 alone, 158 IPOs have gone effective, raising approximately $35.3 billion in proceeds; 66% more than the 95 IPOs from the same period a year ago. Mergers and acquisition (M&A) values have also continued to increase, thanks to a growing number of deals over a billion dollars.

All of this means the time is right for executives to consider the options, craft a plan and make a move toward the transactions that will take their businesses to the next level.

If you are considering an IPO, there are many questions to answer, not the least being: Why IPO? Is it to monetize as your business grows? Is it part of your succession planning? Is your company creating acquisition currency? Clarity about your goals and objectives will allow you to choose the right path and set appropriate expectations.

Companies considering an IPO should begin to prepare at least a year or two in advance. Preparing for an IPO includes building a relationship with the banking and investor community early, assembling an experienced finance and legal team, and putting the discipline and organizational structure in place to be "public company ready" prior to the IPO launch. Establishing the right banking and investor relationships will pay rewards far beyond the 1130 as you consider follow-on offerings or an M&A transactions. Assembling a finance and legal team that has experience with IPOs, SEC reporting, investor interactions and implementing public company controls and processes will keep the IPO process on schedule, minimizing stirprises and costs.

The ongoing reporting requirements of being a public company are rigorous. Companies should be ready to meet the demands of being a public company long before they tile a registration statement.

Ernst & Young LLP partner Howard Stoker has extensive experience helping companies go public, and he says investors want to know that a company's finance team is ready to make the shift "We hear from investors that they want IPO-bound companies to have their financial accounting and reporting systems implemented and operating effectively prior to the IPO," said Stoker, who is part of the Salt Lake City team.

If you are contemplating an IPO, ask yourself if your finance team is truly ready. Typically, IPO-bound companies conduct mock dry...