what is flotation 
flotation is the process of converting a private company into a public company by issuing shares available for the public to purchase it allows companies to obtain financing externally instead of using retained earnings to fund new projects or expansion the term flotation is commonly used in the united kingdom whereas the term going public is more widely used in the united states understanding flotationflotation requires careful consideration regarding timing company structure the company s ability to withstand public scrutiny increased regulatory compliance costs and the time needed to execute the flotation and attract new investors while flotation provides access to new sources of capital the extra expenses associated with issuing new stock must be accounted for when considering the switch from a private to a public company companies in mature phases of growth may need additional funding for various reasons including expansion inventory research and development and new equipment for this reason the time and monetary costs of becoming a company that is traded publicly are often deemed worth it 